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On July 01 2015 06:41 Gorsameth wrote:Show nested quote +On July 01 2015 06:39 Taguchi wrote:On July 01 2015 06:36 Gorsameth wrote:On July 01 2015 06:31 Taguchi wrote:Curious that none of you guys comment on the Guardian article which reports that the IMF has sent documents to all German MPs outlining that the debt is unsustainable under even the best case scenario. A lot more in the article of course, most things have been repeated in this thread too. Didn't Merkel say a couple days ago that the debt is sustainable? Was that an outright lie or what? Juncker lying is no big deal, but Merkel? Also, the request for a new loan is the official process one goes through to get a new ESM program. This is an obvious step, since the previous program ended and Greece still is in dire straits (in case you haven't noticed). FinMins have said before that a 3rd program would be available only upon successful completion of the 2nd program, but ESM regulations specify no such thing (so, another lie, but they can make it true if politically motivated enough to throw Greece out of the EZ). ESM programs come with 'conditionalities' attached, which means a new MoU. You'd have known all that with a tiny bit of searching around but I suppose it is more fun for some people to just call the Greek govt trolls, lol about it, so on and so forth. I can't really blame you, of course, judging from actual EU FinMins basically doing the same thing (seriously, how is the Austrian Chancellor such a nice person and the Austrian FinMin ... well... not such a nice person). Yeah not like it could be that the EU doesn't want to open up more money for Greece until the previous agreement has been completed. No lets assume they lie instead, better fits the narrative of blaming everyone except yourself for the problems you are in. Has it accord to you that perhaps the reason you have no support at all in the EU is because Greece plays the roll of tantrum toddler so well with utterly no hint of humility or self reflection? What are you replying to? Show nested quote +
FinMins have said before that a 3rd program would be available only upon successful completion of the 2nd program, but ESM regulations specify no such thing (so, another lie, but they can make it true if politically motivated enough to throw Greece out of the EZ).
Gee I wonder why they wont give us a new loan when they havnt send us the money from the previous one yet.
See, they can reject the request (of course they can, it's their money - edit: although I feel the need to mention that, as the request states, this money, all of it, will go towards paying back creditors, which means they would agree to pay themselves and hope that Greece is in a position to pay them back at a later date). But they were claiming (this was months ago) a request would be outright rejected because the RULES say so. The rules DO NOT say so. And the ESM was explicitly set up so it could provide financial assistance to a EZ member in case it got in trouble - so denying it to Greece would be a political decision, not a rule-based one. Hope I cleared this up.
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On July 01 2015 06:36 Gorsameth wrote:
Has it accord to you that perhaps the reason you have no support at all in the EU is because Greece plays the roll of tantrum toddler so well with utterly no hint of humility or self reflection?
Wow, this is not a game of monopoly you know...
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On June 30 2015 23:01 Gorsameth wrote:Show nested quote +On June 30 2015 22:56 phantomlancer23 wrote:
Lending money to pay an unsustainble debt must stop.Germans will stop this after they auction everything in Greece it seems there are still a lot of stuff.....anyway if you cant understand that all the World is talking about the blackmailing its not my fault as i said its difficult to admit that you are usury and blackmailer for anyone. Again where is the blackmailing? Give a specific answer please.
Well most of you drank the dominant media arguments so much you can't think anymore so what's the point.
In your view, the european institutions have been helping Greece all this time and it's the Greek that didn't play their part : the reality is the exact opposite. Greek actually did everything that europe wanted them to, far more than any other european country actually, and didn't get one cent from the european institution since 2012 at least : what the european institution have been doing, with public money, is buying Greek debt from their previous private owners, mostly banks.
So we have no been helping Greece, like most of the Germans in this thread believe, we have actually been securing the banks (our very favored banks) from the risks that represented the Greek unsustainability.
Now that the debt is entirely owned by public institutions (the IMF, the eurogroup and the ECB), the european institutions are just starting to face what they have created, which is a country completly empty after five years of stupid policies.
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Just get this all over with. Greek won't repay the debt, either due to inability or incompetence, so just default already and deal with the aftermath.
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On July 01 2015 07:12 WhiteDog wrote:Show nested quote +On June 30 2015 23:01 Gorsameth wrote:On June 30 2015 22:56 phantomlancer23 wrote:
Lending money to pay an unsustainble debt must stop.Germans will stop this after they auction everything in Greece it seems there are still a lot of stuff.....anyway if you cant understand that all the World is talking about the blackmailing its not my fault as i said its difficult to admit that you are usury and blackmailer for anyone. Again where is the blackmailing? Give a specific answer please. Well most of you drank the dominant media arguments so much you can't think anymore so what's the point. In your view, the european institutions have been helping Greece all this time and it's the Greek that didn't play their part : the reality is the exact opposite. Greek actually did everything that europe wanted them to, far more than any other european country actually, and didn't get one cent from the european institution since 2012 at least : what the european institution have been doing, with public money, is buying Greek debt from their previous private owners, mostly banks. So we have no been helping Greece, like most of the Germans in this thread believe, we have actually been securing the banks (our very favored banks) from the risks that represented the Greek unsustainability. Now that the debt is entirely owned by public institutions (the IMF, the eurogroup and the ECB), the european institutions are just starting to face what they have created, which is a country completly empty after five years of stupid policies.
Stop drinking the socialist cool-aid, and read this:
http://www.vox.com/2015/6/8/8747195/greece-crisis-explained/in/8625476
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On July 01 2015 07:27 Acrofales wrote:Show nested quote +On July 01 2015 07:12 WhiteDog wrote:On June 30 2015 23:01 Gorsameth wrote:On June 30 2015 22:56 phantomlancer23 wrote:
Lending money to pay an unsustainble debt must stop.Germans will stop this after they auction everything in Greece it seems there are still a lot of stuff.....anyway if you cant understand that all the World is talking about the blackmailing its not my fault as i said its difficult to admit that you are usury and blackmailer for anyone. Again where is the blackmailing? Give a specific answer please. Well most of you drank the dominant media arguments so much you can't think anymore so what's the point. In your view, the european institutions have been helping Greece all this time and it's the Greek that didn't play their part : the reality is the exact opposite. Greek actually did everything that europe wanted them to, far more than any other european country actually, and didn't get one cent from the european institution since 2012 at least : what the european institution have been doing, with public money, is buying Greek debt from their previous private owners, mostly banks. So we have no been helping Greece, like most of the Germans in this thread believe, we have actually been securing the banks (our very favored banks) from the risks that represented the Greek unsustainability. Now that the debt is entirely owned by public institutions (the IMF, the eurogroup and the ECB), the european institutions are just starting to face what they have created, which is a country completly empty after five years of stupid policies. Stop drinking the socialist cool-aid, and read this: http://www.vox.com/2015/6/8/8747195/greece-crisis-explained/in/8625476
In a reasonable proposal, Münchau writes, Syriza would have offered much bolder reforms in exchange for meaningful budgetary flexibility:
Step back a little and the solution is not hard to see: less austerity, more public sector reforms, and some clever debt restructuring. That was the overwhelming conclusion of a recent conference by some of the world’s leading experts on this issue, as reported by Richard Portes and co-authors from the London Business School in a recent article.
If you had at all followed discussions since January you'd have known that Varoufakis has been presenting a plan involving 'less austerity, more public sector reforms (reforms doesn't mean cuts, repeating this at every opportunity) and some clever debt restructuring' at every point of the discussions. But debt restructuring is off the table for the EU, and when the Greek govt offered 8 billion worth of austerity this last Monday it was told 'well, we don't want THAT 8 billion of austerity (which would significantly hit private profits), we want the other kind of austerity (the one involving cutting off a solidarity grant to the lowest of pensions).
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On July 01 2015 07:36 Taguchi wrote:Show nested quote +On July 01 2015 07:27 Acrofales wrote:On July 01 2015 07:12 WhiteDog wrote:On June 30 2015 23:01 Gorsameth wrote:On June 30 2015 22:56 phantomlancer23 wrote:
Lending money to pay an unsustainble debt must stop.Germans will stop this after they auction everything in Greece it seems there are still a lot of stuff.....anyway if you cant understand that all the World is talking about the blackmailing its not my fault as i said its difficult to admit that you are usury and blackmailer for anyone. Again where is the blackmailing? Give a specific answer please. Well most of you drank the dominant media arguments so much you can't think anymore so what's the point. In your view, the european institutions have been helping Greece all this time and it's the Greek that didn't play their part : the reality is the exact opposite. Greek actually did everything that europe wanted them to, far more than any other european country actually, and didn't get one cent from the european institution since 2012 at least : what the european institution have been doing, with public money, is buying Greek debt from their previous private owners, mostly banks. So we have no been helping Greece, like most of the Germans in this thread believe, we have actually been securing the banks (our very favored banks) from the risks that represented the Greek unsustainability. Now that the debt is entirely owned by public institutions (the IMF, the eurogroup and the ECB), the european institutions are just starting to face what they have created, which is a country completly empty after five years of stupid policies. Stop drinking the socialist cool-aid, and read this: http://www.vox.com/2015/6/8/8747195/greece-crisis-explained/in/8625476 Show nested quote +In a reasonable proposal, Münchau writes, Syriza would have offered much bolder reforms in exchange for meaningful budgetary flexibility:
Step back a little and the solution is not hard to see: less austerity, more public sector reforms, and some clever debt restructuring. That was the overwhelming conclusion of a recent conference by some of the world’s leading experts on this issue, as reported by Richard Portes and co-authors from the London Business School in a recent article. If you had at all followed discussions since January you'd have known that Varoufakis has been presenting a plan involving 'less austerity, more public sector reforms (reforms doesn't mean cuts, repeating this at every opportunity) and some clever debt restructuring' at every point of the discussions. But debt restructuring is off the table for the EU, and when the Greek govt offered 8 billion worth of austerity this last Monday it was told 'well, we don't want THAT 8 billion of austerity (which would significantly hit private profits), we want the other kind of austerity (the one involving cutting off a solidarity grant to the lowest of pensions).
I have been following the discussion (not this one here, but the actual one). And I know there have been plans. I admit that I don´t know the details of the plan presented before the weekend, and assume that it is similar to the one you´re talking about, but while the negotiations were still happening Tsipras announced the referendum. That is capital stupidity.
1. It stalls all negotiations, because who knows what the Greeks will vote for. Meaning that any plan made now can be thrown out the door on Sunday.
2. The deal hadn´t even been closed yet, and Tsipras walked away from the negotiation table, so even if the Greeks vote "yes" for the plan, there isn´t actually a plan yet.
3. You have a deadline on Tuesday (today), not Sunday. You need an immediate solution, not one in 5 days time.
He put himself into a completely untenable position... and that 5 months after the twat was elected in the first place: he CLEARLY had the mandate of the people. Reforms ARE necessary, including structural ones to the social programs, that are simply untenable in the long run. I agree that social inequality in Greece is disgusting, and making the ultra-rich pay their fair share makes sense. I am assuming Vafourakis created a decent proposal. He´s a clever man and seems to know his shit about economy (it´s his political blundering that gets him into trouble, together with Tsipras).
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Varoufakis "modest proposal" wasn't very modest at all, insofar that he basically asked for direct financing through the ECB and some form of Eurobonds, which is exactly what most of the European countries do not want and also does not work within the current EU framework.
for example (from his blog):
The Investment-led Recovery and Convergence Programme (IRCP) will be co-financed by bonds issued jointly by the European Investment Bank (EIB)[v]and the European Investment Fund (EIF)
[...]
A key principle of this proposal is that investment in these social and environmental domains should be europeanised. Borrowing for such investments should not count on national debt anymore than US Treasury borrowing counts on the debt of California or Delaware. The under-recognised precedents for this are (1) that no major European member state counts EIB borrowing against national debt, and (2) that the EIB has successfully issued bonds since 1958 without national guarantees.
How is this "modest" or realistic? It's just another way of loading the risk onto other European countries. His whole proposal does not contain one sentence about structural changes that the Greek economy needs to tackle. The EIB isn't really relevant as it's purpose is not to generalize debt risk but fund a handful of specific projects that are in European interest.
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On July 01 2015 07:52 Nyxisto wrote:Varoufakis "modest proposal" wasn't very modest at all, insofar that he basically asked for direct financing through the ECB and some form of Eurobonds, which is exactly what most of the European countries do not want and also does not work within the current EU framework. for example (from his blog): Show nested quote +
The Investment-led Recovery and Convergence Programme (IRCP) will be co-financed by bonds issued jointly by the European Investment Bank (EIB)[v]and the European Investment Fund (EIF)
[...]
A key principle of this proposal is that investment in these social and environmental domains should be europeanised. Borrowing for such investments should not count on national debt anymore than US Treasury borrowing counts on the debt of California or Delaware. The under-recognised precedents for this are (1) that no major European member state counts EIB borrowing against national debt, and (2) that the EIB has successfully issued bonds since 1958 without national guarantees.
How is this "modest" or realistic? It's just another way of loading the risk onto other European countries. His whole proposal does not contain one sentence about structural changes that the Greek economy needs to tackle. The EIB isn't really relevant as it's purpose is not to generalize debt risk but fund a handful of specific projects that are in European interest.
Hasn't that been the main argument from the EU side against the Greek proposals? Lack of concrete plans and directly implementable solutions with minimal room for ambiguity?
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On July 01 2015 07:52 Nyxisto wrote:Varoufakis "modest proposal" wasn't very modest at all, insofar that he basically asked for direct financing through the ECB and some form of Eurobonds, which is exactly what most of the European countries do not want and also does not work within the current EU framework. for example (from his blog): Show nested quote +
The Investment-led Recovery and Convergence Programme (IRCP) will be co-financed by bonds issued jointly by the European Investment Bank (EIB)[v]and the European Investment Fund (EIF)
[...]
A key principle of this proposal is that investment in these social and environmental domains should be europeanised. Borrowing for such investments should not count on national debt anymore than US Treasury borrowing counts on the debt of California or Delaware. The under-recognised precedents for this are (1) that no major European member state counts EIB borrowing against national debt, and (2) that the EIB has successfully issued bonds since 1958 without national guarantees.
How is this "modest" or realistic? It's just another way of loading the risk onto other European countries. His whole proposal does not contain one sentence about structural changes that the Greek economy needs to tackle.
Because he is a macroeconomist, and you're quoting from 2014, when he wasn't involved with Syriza, or elected for that matter. The modest proposal was not about Greece, it was a plan to be undertaken for the entire EU (hell, Germany would be included in the debt writedown and Greece would still be over 120% under his proposal).
As the negotiations went on, if you read the various leaked documents, there was convergence on almost all structural reform issues. No problems there. The abolishment of collective bargaining was a sore spot but... Germany does actually have collective bargaining, does it not? As do all other EU countries.
Greece proposed to finance its pensions through privatization proceeds (which would at best amount to 10 bn, probably less). 10 bn is a nice sum if we're talking pensions, it can go a long way and in the meantime you raise retirement age and do whatever other changes to make the system sustainable. Creditors wanted to cut pensions and siphon privatization proceeds towards the debt (which stands at a tidy 320bn, lest we forget). Pointless and recessionary, wouldn't you say?
Any other disagreements were on parametric measures only. NOT structural or institutional changes.
On another note, about monetizing debt... Does QE ring a bell? It serves the same purpose Varoufakis's proposal serves (lowering spreads and yields). And yet, it is structured so that the ones who need it most (peripheral countries under pressure) can't get as much of it as countries that don't need it (the ones with already suppressed yields). Smart.
edit: @Acrofales, I'm with you on the referendum, I've been raging about it (to the people around me  ) for days now. It was a totally stupid move. If Tsipras was willing to go to a referendum and/or say NO himself, risk everything etc, he should've done so in February. Or April, since that was a soft deadline to have a program in place. That we got to end-June, with the economy back in recession, with no foreign currency reserves (this would include euros), asking for 5-day extensions in a poisoned political climate is monumentally stupid.
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United States22883 Posts
On July 01 2015 07:52 Nyxisto wrote:
How is this "modest" or realistic? It's just another way of loading the risk onto other European countries. His whole proposal does not contain one sentence about structural changes that the Greek economy needs to tackle. The EIB isn't really relevant as it's purpose is not to generalize debt risk but fund a handful of specific projects that are in European interest.
I said it earlier but I'll repeat it because people keep being baited into the easy and incorrect solution of blaming Greece: any structural changes that Greece makes will be irrelevant in the current EU. They're not climbing out of this hole given the current circumstances, even if Brussels acquiesces to their proposal. The country that needs to make structural economic changes is Germany and it's unlikely to happen, which dooms the EU. Greece is just the weakest player that let go first, but every other eurozone country is harmed by Germany's austerity and paranoia of becoming the Weimar Republic again.
Ya'll are stuck debating the best way to hide a pimple and ignoring what's causing the acne.
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Ye that makes perfect sense, it's Germany foult that corrupt and tax evading country that lived over the standards it's economy allowed it after cooking the books to get into the group in the first place is not the reason why its in dire situation it is now. It must be Germany that have very healthy economic standards and fiscal policy. Ye, you nailed the issue here Jibba, thank you.
Do you understand that retirment age in Greece in 2010 was 57 years old? Do you understand that other social privilages were on pair with that?
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United States22883 Posts
On July 01 2015 08:18 Narw wrote:
Ye that makes perfect sense, it's Germany foult that corrupt and tax evading country that lived over the standards it's economy allowed it after cooking the books to get into the group in the first place is not the reason why its in dire situation it is now. It must be Germany that have very healthy economic standards and fiscal policy. Ye, you nailed the issue here Jibba, thank you.
Do you understand that retirment age in Greece in 2010 was 57 years old? Do you understand that other social privilages were on pair with that?
It's Germany's fault that it kept wages suppressed for too long, doesn't spend enough and runs far too large of a trade surplus. You're looking at this like it's a personal bank account, and it's not. The eurozone countries are trapped with Germany and in the long run they cannot compete, even France, with Germany and its current fiscal position. Germany is imposing a recession on the rest of the eurozone and Greece is largely irrelevant to this whole mess. The only situation where the eurozone is saved is with Germany having an expansionary economy with above average inflation, to offset below average inflation by the rest. Germany is basically ignoring everything we've learned about macro economics post-Keynes, and they're running such good PR that the public (but not economists - they've been writing about this shit for 5 years) only cares about blaming Greeks (who are admittedly easy to blame.)
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I know this has been discussed a few dozens of times, but I'd really like to see the evidence that German wages, especially in the export relevant sectors, are considerable lower than in other European countries that have a similar level of productivity. It's simply not the case.
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Heh, the thread has been so focused on Greece for so long that I forgot for awhile that this is a generic Europe economic thread, rather than a Greece situation thread. Perhaps we should split them off, given how much of the discussion is Greece specific?
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People who think there are severe structural flaws in the Eurozone will see their effects in Greece (to varying degrees since Greece really is an outlier in mismanagement). People who don't, won't.
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United States22883 Posts
On July 01 2015 08:43 Nyxisto wrote:
I know this has been discussed a few dozens of times, but I'd really like to see the evidence that German wages, especially in the export relevant sectors, are considerable lower than in other European countries that have a similar level of productivity. It's simply not the case.
https://www.princeton.edu/~amoravcs/library/after_crisis.pdf
Between 1999 and 2008, the average unit labor costs in Greece, Italy, Portugal, and Spain rose by one percent per year over the target, slowly rendering their economies uncom- petitive and signaling the need for reform. During the same period in Germany, by contrast, sluggish wage growth, weak domestic consumption, labor-market reforms, and cuts in government spending meant that unit labor costs rose by an average of less than one percent per year, well below the European target. Over a decade, this com- bination of excessive rises in unit labor costs in some places and wage suppression elsewhere generated a 25 percent overall gap in competitiveness between Germany and its European partners. This chiefly benefited Germany’s export sector—the only part of its economy to enjoy net growth over the decade—at the expense not just of foreigners but also of German workers and taxpayers, whose wages were not keeping pace with inflation. Germany was even reprimanded for deliberately not meeting ECB targets (while France and the other majors complied) but it didn't amount to much.
The recent minimum wage is a first step but it's hardly enough and it's gone on for so long. Germans are more productive/innovative/etc. than most of their counterparts elsewhere, which is generally a good thing, except when they get paid at similar or lower levels. If you're stuck on the same currency, even if your government wasn't corrupt and wasteful, you just can't compete with that. "Become better" might have been the answer when it was just independent countries, but it's not the answer in the EU.
On July 01 2015 08:59 Taguchi wrote:
People who think there are severe structural flaws in the Eurozone will see their effects in Greece (to varying degrees since Greece really is an outlier in mismanagement). People who don't, won't.
I don't think my view is that it was inherently flawed. Greece, Italy and Spain specifically tried to force Germany to meet higher expansion targets from the very beginning, and Germany just didn't comply. If you went back to 1998 and described Germany's fiscal policy in 2010, everyone would've known it would fail.
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It is. A bit tl;dr but that's a good thing when talking about a summary of 5 years of constant mess.
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EPT
