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Bizaraciel
1075 Posts
On July 07 2015 00:23 zlefin wrote: GDP goes down because of failure, not because of efforts, also because it was an artificially inflated fake GDP. You're the one believing utter nonsense Taguchi. Don't bother arguing with Taguchi the propaganda in Greece is strong at the moment. | ||
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Taguchi
Greece1575 Posts
On July 07 2015 00:23 zlefin wrote: GDP goes down because of failure, not because of efforts, also because it was an artificially inflated fake GDP. You're the one believing utter nonsense Taguchi. So the programs, recommended by the EC, ECB, IMF, that were constantly under their surveillance, that included regular checks, that had funding attached to them disbursed only upon successful completion of a review... that all happened in another universe. And I believe utter nonsense. That statistics show a direct correlation of austerity with GDP shrinking, that show Greece was NOT an outlier, that stuff doesn't exist. And I believe utter nonsense. I've been very meticulous in substantiating my responses here, with data whenever I could. I've only had ad hominems and mystery beliefs backed by hot air as replies. And I'm the one talking nonsense. Sure. Whatever. Have a nice life. On July 07 2015 00:27 Bizaraciel wrote: Don't bother arguing with Taguchi the propaganda in Greece is strong at the moment. Yes, all propaganda. It's not like I've offered up plenty of backing for my responses, no sir. | ||
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zlefin
United States7689 Posts
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Taguchi
Greece1575 Posts
On July 07 2015 00:36 zlefin wrote: Your backing has often been torn to shreds by counters, not always, but often. You've chosen your path, we'll see how it works out for you. It has? Where? All I've been getting is 'debt is sustainable' from some guys, 'Syriza doesn't want to reform' from others, and I've been replying with the IMF document and recommending they actually read Syriza's proposal for an agreement prior to the referendum. And plenty of ad-hominems. And a few people that just don't care and want to see it all blow up or go away. edit: And some reasonable people, to be sure, mostly Germans, that do appear genuinely interested in the subject :p | ||
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warding
Portugal2394 Posts
a) IMF paper says that Greek debt is unsustainable in the long term, and that in the short term Greece needs more bailout cash at favourable rates. Debt is unsustainable in the long run, but the situation isn't URGENT. b) This was Syriza's programme: - Immediately increasing public investment by at least €4 billion. - Gradually reversing all the Memorandum injustices. - Gradually restoring salaries and pensions so as to increase consumption and demand. - Providing small and medium-sized enterprises with incentives for employment, and subsidizing the energy cost of industry in exchange for an employment and environmental clause. - Investing in knowledge, research, and new technology in order to have young scientists, who have been massively emigrating over the last years, back home. - Rebuilding the welfare state, restoring the rule of law and creating a meritocratic state. How do they afford this? By writing-off public debt, excluding public investment from deficit calculations, asking for a European New Deal that would finance public expenses, and re-opening the "issue of the Nazi Occupation forced loan". | ||
zatic
Zurich15329 Posts
On July 07 2015 00:38 Taguchi wrote: It has? Where? All I've been getting is 'debt is sustainable' from some guys, 'Syriza doesn't want to reform' from others, and I've been replying with the IMF document and recommending they actually read Syriza's proposal for an agreement prior to the referendum. And plenty of ad-hominems. And a few people that just don't care and want to see it all blow up or go away. I am on your side on this and I think most people on the last couple of pages are acting pretty ignorant and/or frankly dumb. It is obvious to anyone bothering to look that the cuts Greek went through were deep and painful, and the consequences for the people of Greece devastating. What critics of progress or lack thereof in Greece are pointing though is less the cuts ("austerity") and more the lack of structural reform. Frankly, I find it unbelievable that over 5 years tax collection actually got LESS effective, that there is still no functioning register for property, and that the shipping oligarchs have not been touched. Those were three major points on the agenda from day one in 2010, and there has been apparently zero progress on all of them. I am sure the reason for failure on these points does not lie solely with one side of the conflict. But this really is frustrating for both the Greek people suffering from austerity as well as the European tax payers who see their Euros vanish in Hella support deals. | ||
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Taguchi
Greece1575 Posts
On July 07 2015 00:40 warding wrote: Taguchi I read the paper. Asking me to read it adds nothing in substance. a) IMF paper says that Greek debt is unsustainable in the long term, and that in the short term Greece needs more bailout cash at favourable rates. Debt is unsustainable in the long run, but the situation isn't URGENT. b) This was Syriza's programme: - Immediately increasing public investment by at least €4 billion. - Gradually reversing all the Memorandum injustices. - Gradually restoring salaries and pensions so as to increase consumption and demand. - Providing small and medium-sized enterprises with incentives for employment, and subsidizing the energy cost of industry in exchange for an employment and environmental clause. - Investing in knowledge, research, and new technology in order to have young scientists, who have been massively emigrating over the last years, back home. - Rebuilding the welfare state, restoring the rule of law and creating a meritocratic state. How do they afford this? By writing-off public debt, excluding public investment from deficit calculations, asking for a European New Deal that would finance public expenses, and re-opening the "issue of the Nazi Occupation forced loan". And where in the final proposal of Syriza to the creditors do you see all this, exactly? IMF says it will not participate in the program unless the debt can be credibly sustainable after the program expires. We are talking about a 2-3 year program here. If the creditors agree that debt restructuring will take place somewhere in that timeframe I'm pretty sure the Greek side would agree. On July 07 2015 00:45 zatic wrote: I am on your side on this and I think most people on the last couple of pages are acting pretty ignorant and/or frankly dumb. It is obvious to anyone bothering to look that the cuts Greek went through were deep and painful, and the consequences for the people of Greece devastating. What critics of progress or lack thereof in Greece are pointing though is less the cuts ("austerity") and more the lack of structural reform. Frankly, I find it unbelievable that over 5 years tax collection actually got LESS effective, that there is still no functioning register for property, and that the shipping oligarchs have not been touched. Those were three major points on the agenda from day one in 2010, and there has been apparently zero progress on all of them. I am sure the reason for failure on these points does not lie solely with one side of the conflict. But this really is frustrating for both the Greek people suffering from austerity as well as the European tax payers who see their Euros vanish in Hella support deals. Yes, sorry, I added an addendum where I had you, Toadesstern and a couple other people in mind. Easy to get fixated on the negatives. And yes, I'm as angry as anyone about what you mention. In 2010 I thought that being under surveillance by the troika might be a good thing for Greece, I knew what sort of scum our politicians were after all. In 2015, my votes went against the people that could have fixed the mess but didn't: the old political class of Greece and the austerity programmes that delivered nothing much at all. The line 'increase the rate of the tonnage tax and phase out special tax treatments of the shipping industry' appears both on the Syriza proposal and the creditor proposal so, if we do get a program, this at least will be implemented. On the other issues, who knows. That's why I mentioned I liked the debt brake idea, perfect imperative for whatever government is in power to not fuck up on tax collection - lower wages/pensions as part of the penalty for screwing up, see if you get reelected. | ||
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andrewlt
United States7702 Posts
Arguing that Greece did not make effort is ridiculous as well. They made deep cuts to their public spending. The Greek government's primary account surplus was the highest in the Eurozone before the latest crisis. The huge drop in GDP is really attributable to the harsh austerity measures they had to endure. The concern really is about reforms. I'm highly doubtful that Syriza has the competence to usher in good governance. Cuts are much easier to accomplish than reforming how the governments works. Changing the populace's attitude towards the state with regards to how much benefits they are entitled to and how much they should be asked to contribute is going to be a very painful process. Greece is going to have to delete a lot of stupid regulations and better enforce the few good regulations they have. I'm just not convinced that Syriza has the right instincts and beliefs concerning the size and role of government in the economy. They seem to prefer a bloated public sector and Venezuela style state control of large businesses. I don't think they will be friendly to private enterprise, other than the politically connected private enterprise. | ||
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warding
Portugal2394 Posts
Syriza faced the realities of governing a country and obviously had to concede. The point about their motives and ideology is still valid, isn't it? | ||
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gsgfdf
Greece2 Posts
On July 07 2015 01:09 andrewlt wrote: The debt is unsustainable. There should be no more argument about this. I'm reading English language (mostly US/UK, some Canada/Australia) articles and there is really no point of contention about this. Outside the Eurozone countries, the consensus is pretty much on the side of the IMF regarding debt relief. Arguing that Greece did not make effort is ridiculous as well. They made deep cuts to their public spending. The Greek government's primary account surplus was the highest in the Eurozone before the latest crisis. The huge drop in GDP is really attributable to the harsh austerity measures they had to endure. The concern really is about reforms. I'm highly doubtful that Syriza has the competence to usher in good governance. Cuts are much easier to accomplish than reforming how the governments works. Changing the populace's attitude towards the state with regards to how much benefits they are entitled to and how much they should be asked to contribute is going to be a very painful process. Greece is going to have to delete a lot of stupid regulations and better enforce the few good regulations they have. I'm just not convinced that Syriza has the right instincts and beliefs concerning the size and role of government in the economy. They seem to prefer a bloated public sector and Venezuela style state control of large businesses. I don't think they will be friendly to private enterprise, other than the politically connected private enterprise. At long last some common sense in these last posts. Most people here (by here i mean Greece not the forum) agree with what you are saying. I never voted for money to rain from the sky the moment Syriza got elected. Some people did but you can't avoid leechers. Syriza was voted so that the parties that destroyed the country would get out of the way. Syriza has made many mistakes so far. The most important one, they haven't done close to anything to fight the injustice here. Many corrupt people have created the situation Greece and the EU are at the moment, but they are not the ones that are paying the bill for this mess. edit: grammar. | ||
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Plansix
United States60190 Posts
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ACrow
Germany6583 Posts
On July 07 2015 02:18 Plansix wrote: Having an entire nation in recession for an indeterminate amount of time is a terrible idea. Punishment aside, that sort of long term depression shape the people growing up in it. Other countries in the EU maybe want to rethink the idea of having a large number of unemployed youth that perceive all their hardship being inflicted upon them by a foreign power. On a long enough time line, that goes really poorly. No one wants Greece to be in recession, no one talks about punishment. You should read less biased media if you honestly think that anyone wants to (purposefully) inflict any harm on Greece (e.g., while I highly respect Krugman and read his NYT column fairly regularly, he is very biased in the matter). The Greek voters are grown ups, they have every right to determine the way they want to go, and they impressively and clearly voted how they want to go on - with less EU intermission. Their vote should be respected. Either Greece asks for further credits and does make a smart, acceptable proposal on what guarantees they can give in exchange for that, or they default and leave the Euro zone, in which case they have a few very hard years in front of them, but will then be able to recover and become competitive again by means of a devaluing currency. (My personal guess is the second option, seeing how hard a stance Tsipras has taken in the past five months). Whatever Tsipras decides to do, there is no way around debt restructuring for Greece and a humanitarian catastrophe will be avoided at all costs by the EU, that I'm sure of. | ||
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Acrofales
Spain18004 Posts
On July 07 2015 02:18 Plansix wrote: Having an entire nation in recession for an indeterminate amount of time is a terrible idea. Punishment aside, that sort of long term depression shape the people growing up in it. Other countries in the EU maybe want to rethink the idea of having a large number of unemployed youth that perceive all their hardship being inflicted upon them by a foreign power. On a long enough time line, that goes really poorly. And how do you propose that Greece avoids recession and high unemployment? Nobody wants Greece to be in trouble, but that doesn't change the fact that it is. Whether it continues by reforms that allow it to maintain the Euro or with Greece defaulting and using a different (perhaps temporary) currency, it seems likely Greece will be in recession for another 5 years, minimum, before whatever reforms wrought start to bear fruits. It's a miserable prospect, but a disorderly default (like Argentina, which is still on its long road to recovery) is far far worse. | ||
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c0ldfusion
United States8293 Posts
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WhiteDog
France8650 Posts
On July 07 2015 00:40 warding wrote: Taguchi I read the paper. Asking me to read it adds nothing in substance. a) IMF paper says that Greek debt is unsustainable in the long term, and that in the short term Greece needs more bailout cash at favourable rates. Debt is unsustainable in the long run, but the situation isn't URGENT. b) This was Syriza's programme: - Immediately increasing public investment by at least €4 billion. - Gradually reversing all the Memorandum injustices. - Gradually restoring salaries and pensions so as to increase consumption and demand. - Providing small and medium-sized enterprises with incentives for employment, and subsidizing the energy cost of industry in exchange for an employment and environmental clause. - Investing in knowledge, research, and new technology in order to have young scientists, who have been massively emigrating over the last years, back home. - Rebuilding the welfare state, restoring the rule of law and creating a meritocratic state. How do they afford this? By writing-off public debt, excluding public investment from deficit calculations, asking for a European New Deal that would finance public expenses, and re-opening the "issue of the Nazi Occupation forced loan". Hum...what part of unsustainable do you not understand ? Were you expecting the IMF to post out madmax like pictures to point out a supposed "urgency" that would indeed justify debt restructuring ? | ||
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Plansix
United States60190 Posts
On July 07 2015 03:27 Acrofales wrote: And how do you propose that Greece avoids recession and high unemployment? Nobody wants Greece to be in trouble, but that doesn't change the fact that it is. Whether it continues by reforms that allow it to maintain the Euro or with Greece defaulting and using a different (perhaps temporary) currency, it seems likely Greece will be in recession for another 5 years, minimum, before whatever reforms wrought start to bear fruits. It's a miserable prospect, but a disorderly default (like Argentina, which is still on its long road to recovery) is far far worse. Hey, if people think they can pull it off and not produce an entire generation of unemployed Greek youth that hate Germany/EU, more power to them. I am just pointing out that long term unemployment and lack future prospects are what lead to radicalization. 5 years seems manageable, but who knows what will happen. | ||
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c0ldfusion
United States8293 Posts
One could argue that default followed by a Greece exit is the most logical but who really knows. Politically (and maybe philosophically), there is still this sense that the leadership in Eurogroup is quite uncomfortable with the idea of a member leaving the union. | ||
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RvB
Netherlands6216 Posts
Even with concessional financing through 2018, debt would remain very high for decades and highly vulnerable to shocks. Assuming official (concessional) financing through end– 2018, the debt-to-GDP ratio is projected at about 150 percent in 2020, and close to 140 percent in 2022 (see Figure 4ii). Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30 percent of GDP would be required to meet the November 2012 debt targets. With debt remaining very high, any further deterioration in growth rates or in the mediumterm primary surplus relative to the revised baseline scenario discussed here would result in significant increases in debt and gross financing needs (see robustness tests in the next section below). This points to the high vulnerability of the debt dynamics. This is obviously the part you're referring you when you're saying the IMF thinkst he debt is unsustainable. However this is how it continues Given the extraordinarily concessional terms that now apply to the bulk of Greece’s debt, the debt/GDP ratio is not a very meaningful proxy for the forward-looking debt burden. For the same reason, it has become increasingly problematic to compare the debt stock to the applicable benchmarks in the MAC DSA framework, which are derived from a historical sample of crisis episodes in which debt stocks would have been mostly, if not entirely, on market terms. It therefore makes sense to focus directly on the future path of gross financing needs (GFN), and use the MAC DSA benchmarks of 15–20 percent of GDP for that ratio to define a sustainable path. Given Greece’s weak policy framework and easy loss of market access, the lower threshold is clearly the relevant one. Given the fragile debt dynamics, further concessions are necessary to restore debt sustainability. As an illustration, one option for recovering sustainability would be to extend the grace period to 20 years and the amortization period to 40 years on existing EU loans and to provide new official sector loans to cover financing needs falling due on similar terms at least through 2018. The scenario below considers this doubling of the grace and maturity periods of EU loans (except those for bank recap funds, which already have very long grace periods). In this scenario (see charts below), while the November 2012 debt/GDP targets would not be achievable, the gross financing needs would average 10 percent of GDP during 2015-2045, the level targeted at the time of the last review. If grace periods and maturities on existing European loans are doubled and if new financing is provided for the next few years on similar concessional terms, debt can be deemed to be sustainable with high probability. Underpinning this assessment is the following: (i) more plausible assumptions—given persistent underperformance—than in the past reviews for the primary surplus targets, growth rates, privatization proceeds, and interest rates, all of which reduce the downside risk embedded in previous analyses. This still leads to gross financing needs under the baseline not only below 15 percent of GDP but at the same levels as at the last review; and (ii) delivery of debt relief that to date have been promises but are assumed to materialize in this analysis. So yes, more concessional financing but no actual haircut on the debt which is what you're advocating. Feb 24 Euro zone ministers could consider further debt relief measures for Greece if the country meets all the criteria specified in the NOvember 2012 decision of euro zone finance ministers, Eurogroup head Jeroen Dijsselbloem said on Tuesday. Speaking in the European Parliament, Dijsselbloem referred to the Eurogroup statement which said the euro zone finance ministers could consider, if necessary further measures to help Greek debt sustainability, if Greece has a primary surplus and meets all the commitments in the bailout, which of "hasn't happened yet." source Which is exactly what Europe offered. And guess what, the IMF wants reforms before debt relief not debt relief before reforms. "Given where we are, my suspicion is it would be much preferable to see a deliberate move towards reforms (and) for that to be followed through by the other side of the balance," Lagarde said. source | ||
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Toadesstern
Germany16350 Posts
Now on top of that the collateral needed increases as well due to the collateral losing massive amounts of value if a Grexit were to happen (assumption on my part that that's the reasoning for increasing collateral). More bad news for Greece this evening, and again it is from the European Central Bank. It has told Greek banks they have to lodge more collateral or assets with the Bank of Greece as security against the €89bn of emergency lending or ELA (emergency liquidity assistance) provided to the banks. What does this mean? Well it reduces the spare cash-raising capacity of the banks from €17-20bn to between €5-7bn. Or so I am told, by well-placed sources. [...] source (BBC commentary) TL;DR: The 48hours in which they want to get a deal seem to almost look like a hard deadline. Not really "hard" because you don't know when cash will run out but clearly it's not looking good. | ||
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Alcathous
Netherlands219 Posts
On July 07 2015 01:09 andrewlt wrote: The debt is unsustainable. There should be no more argument about this. I'm reading English language (mostly US/UK, some Canada/Australia) articles and there is really no point of contention about this. Outside the Eurozone countries, the consensus is pretty much on the side of the IMF regarding debt relief. Yet every time Greece puts it on the table, Eurogroup immediately walks away. And the opinion here that Greeks are cheats and playing us for a fool are growing and this limits the room of our politicians, who already don't even want debt restructuring on the table. Then it leaks out that the Dutch/German/Finish/Slovenia side actually do want to restructure debt eventually, but only after winning the negotiations and on their terms, not the Greek terms.. Germany and the Netherlands profited hugely from the Euro, which was implemented faultily and is still fundamentally flawed. And now they both refuse to deal with the weak points. My fellow people need to get real and realize that being in the same monetary union means we pay for what they call the 'Greek sins'. It is the other side of a coin that has been very profitable to us. People here are so crazy now that all they care about is 'punishing Greece', even if it costs them money. If we were smarter, we would have had better agreements, stricter rules or no Greece in the Euro anyway. But we didn't use our veto. We could have a federal Europe with UK, Belgium, Germany, Denmark, France, Austria, but we fucked it up and then to make it worse let the business lobby get too strong and let in all these Eastern European countries as well. If we want a real federal Europe, we have to start anew within the EU, it seems. Also, Germany is now too powerful. When people say they won WWII after all, they aren't very wrong, as they are in charge of Europe now. | ||
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