European Politico-economics QA Mega-thread - Page 196

On July 13 2015 17:23 unsaeglich wrote:


1. Germany supported Greece much more than France.
2. Since Germany is the major supporter of Greece, it's in Germanies main goal to create an efficient economy in Greece.

the main problem is the people in Greece voted for a party that undone the advance that was made by the earlier parties. And furthermore insult Germans personally in a bad manner, which makes it difficult for Germans to "lend" (throw away) them their money.

Sadly the people of Germany were never asked if THEY wanted to be in the EU anymore. Because there are many in Germany who would want to have their own currency and not be forced into slavery for silly Greeks for generations to come.

the main problem is the people in Greece voted for a party that undone the advance that was made by the earlier parties. And furthermore insult Germans personally in a bad manner, which makes it difficult for Germans to "lend" (throw away) them their money.

On July 13 2015 18:49 Integra wrote:
Its not over yet. Each countrys leader has to go back home and convince everyone else that its a good deal for their country and if they decide that it's not then we are back at square one. There is a chance that Greece won't accept the deal and say "fuck it".

In July 2012, Timothy F. Geithner, the United States Treasury secretary at the time, traveled to Sylt, an island off Germany in the North Sea.

Mr. Geithner was there for a meeting with Wolfgang Schäuble, Germany’s finance minister, who would spend his summers at his vacation home on the tiny island.

The topic was Greece.

In the home’s library, the two men spoke about Greece’s prospects and begun discussing ways for the European Union to keep the country in the eurozone.

To Mr. Geithner’s dismay, however, Mr. Schäuble took the conversation in a different direction.

“He told me there were many in Europe who still thought kicking the Greeks out of the eurozone was a plausible — even desirable — strategy,” Mr. Geithner later recounted in his memoir, “Stress Test: Reflections on Financial Crises.” “The idea was that with Greece out, Germany would be more likely to provide the financial support the eurozone needed because the German people would no longer perceive aid to Europe as a bailout for the Greeks,” he says in the memoir.

“At the same time, a Grexit would be traumatic enough that it would help scare the rest of Europe into giving up more sovereignty to a stronger banking and fiscal union,” Mr. Geithner wrote. “The argument was that letting Greece burn would make it easier to build a stronger Europe with a more credible firewall.”

On July 13 2015 19:42 warding wrote:
I don't understand the argument about the future of the Eurozone. Isn't it more likely now that other countries will be more fiscally responsible than it was before?

On July 13 2015 20:08 maartendq wrote:

One thing I've been wondering lately: how do you let Greece grow?

Sure they've got tourism and shipping, but those aren't nearly enough to bring them were they need to be. On top of that the economy it does have is anything but export-oriented, while it imports a significant number of goods.

Greece’s brutal creditors have demolished the eurozone project

A few things that many of us took for granted, and that some of us believed in, ended in a single weekend. By forcing Alexis Tsipras into a humiliating defeat, Greece’s creditors have done a lot more than bring about regime change in Greece or endanger its relations with the eurozone. They destroyed the eurozone as we know it. They demolished the idea of a monetary union as a step towards a democratic political union and reverted to the nationalist European power struggles of the 19th and early 20th century. They demoted the eurozone into a toxic fixed exchange-rate system, with a shared single currency, run in the interests of Germany, held together by the threat of absolute destitution for those who challenge the prevailing order. The best thing that can be said of the weekend is the brutal honesty of those perpetrating this regime change.

But it was not just the brutality that stood out, nor even the total capitulation of Greece. The material shift is that Germany has formally proposed an exit mechanism. On Saturday, Wolfgang Schäuble, finance minister, insisted on a time-limited exit — a “timeout” as he called it. I have heard quite a few crazy proposals in my time, and this one is right up there. A member state pushed for the expulsion of another. This was the real coup over the weekend:regime change in the eurozone.

The fact that a formal Grexit may have been avoided for the moment is immaterial. Grexit will be back on the table when you have the slightest political accident — and there are still many things that could go wrong, both in Greece and in other eurozone parliaments. Any other country that in future might challenge German economic orthodoxy will face similar problems.

This brings us back to a more toxic version of the old exchange-rate mechanism of the 1990s that left countries trapped in a system run primarily for the benefit of Germany, which led to the exit of the English pound and the temporary departure of the Italian lira. What was left was a coalition of countries willing to adjust their economies to Germany’s. Britain had to leave because it was not.

What should the Greeks do now? Forget for a moment the economic debate of the last few months, over issues such as the impact of austerity or economic reforms on growth, and ask yourself this simple question: do you really think that an economic reform programme, for which a government has no political mandate, which has been explicitly rejected in a referendum, that has been forced through by sheer political blackmail, can conceivably work?

The implications for the rest of the eurozone are at least as troubling. We will soon be asking ourselves whether this new eurozone, in which the strong push around the weak, can be sustainable. Previously, the strongest argument against any forecasts of break-up has been the strong political commitment of all its members. If you ask Italians why they are in the eurozone, few have ever pointed to the economic benefits. They wanted to be part of the most ambitious project of European integration undertaken so far.

But if you take away the political aspiration, you may end up with a different judgment. From a pure economic point of view, we know that the euro has worked well for Germany. It worked moderately well for The Netherlands and Austria, although it produced quite a degree of financial instability in both.

But for Italy, it has been an unmitigated economic disaster. The country has seen virtually no productivity growth since the start of the euro in 1999. If you want to blame the lack of structural reforms, then you have to explain how Italy managed decent growth rates before 1999. Can we be sure that a majority of Italians will support the single currency in three years' time?

The euro has not worked out for Finland either. While the country is considered the world champion of structural reforms, its economy has slumped ever since Nokia lost the plot as the world’s erstwhile premier mobile phone maker. France has performed relatively well during the euro’s early years But it, too, is now running persistent current account deficits. It is not only Greece where the euro is not optimal.

Once you strip the eurozone of any ambitions for a political and economic union, it changes into a utilitarian project in which member states will coldly weigh the benefits and costs, just as Britain is currently assessing the relative advantages or disadvantages of EU membership. In such a system, someone, somewhere, will want to leave sometime. And the strong political commitment to save it will no longer be there either.

On July 13 2015 20:14 Kenpark wrote:


You cant be serious about countries "suffering" from the Euro. It speaks volumes that the majority of Greece still wants to stay in the Euro despite the situation they are in.
People seem to forget what kind of country Greece was before they got in the Euro.