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Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. |
On July 14 2015 01:19 Narw wrote:Show nested quote +On July 14 2015 01:16 WhiteDog wrote:On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ It's not flawed at all, Greece did not had diabetes : this liberal idea that administration or anything is too big has been proved wrong many times. The economy is a circuit, when you reduce spending at a grand scale you create a recession by contracting the demand. It's pure logic. Maybe you want to stop projecting your personal views as facts and stop pretending that economists agree about everything.
Yeah so modern economists do not agree on the existence of the keynesian multiplicator ? On the necessity of counter cylical economic policy ? This is really basic macroeconomy...
The US had budgetary cuts lately, but they waited for growth and it didn't drive their economy in recession (where you can't pay your debt). The entire eurozone rules push for the exact opposite (spending during growth time and cuts during recession) explaining why we have such a high debt ratio and no efficience in fighting the crisis.
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You guys are ignoring the real issue. I'm not talking about recent bailout/austerity history. I'm talking about how ever since Greece joined the Eurozone (and some time before) its spending (or if we want to keep the analogy going, eating) have been complete and utter shit.
Greece: Hey can I join the EU club
EU: Sure dude, you're looking a little fat but we can help
Greece: Cool awesome thanks, I'm fat cuz I eat junk food I haz no money
EU: Here have a few billion dollars, go buy some veggies and real food. We have a community grocery store.
Greece: Thanks bro ya'll rock
EU: Okay we'll check back in a few years
*few years later*
EU: Hey Greece you're still kinda fat
Greece: Yeah it's a work in progress, very hard to change habits. Bought some chocolate, now I have no money.
EU: Holy shit that's a lot of chocolate
Greece: Sorry guys it's hard like I said. Can I have more money? I'll do better
EU: Yeah that's fine we understand. See you soon?
Greece: Sure whatever
*few years later*
EU: Hey Greece you're still kinda fat
Greece: Yeah it's a work in progress, very hard to change habits. Bought some chocolate, now I have no money.
EU: Holy shit that's a lot of chocolate
Greece: Sorry guys it's hard like I said. Can I have more money? I'll do better
EU: Yeah that's fine we understand. See you soon?
Greece: Sure whatever
*few years later*
EU: Hey Greece holy shit what the heck you're fat. Still buying chocolate
Greece: Yeah it's a work in progress, very hard to change habits. Bought some chocolate, now I have no money.
EU: Holy shit that's a lot of chocolate
Greece: Sorry guys it's hard like I said. Can I have more money? I'll do better
EU: Dude we literally did this twice already.
Greece: I know but---
EU we're gonna have to keep closer track of you cuz clearly this isn't working
Greece: Fuck you! I'm my own man (err, country)
EU: We might have to kick you out of the club
Greece: Hold on while I talk to myself *mutters to self about referendum
Greece: Okay I told mysself to tell you to fuck off
EU: You sure about that?
Greece: YEAH!
EU: You reaaaally sure?
Greece: Yeah!
EU: We're gonna have to stop giving you money
Greece Yea-- wait fuck I need money
EU: Yeah
Greece: Yeah
EU: So we're gonna draw up a diet plan for you to spend our money on
Greece: Fine assholes
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9070 Posts
What are the chances the proposed agreement goes through the parliament in Greece and what will happen if it doesn't?
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On July 14 2015 01:35 disciple wrote:
What are the chances the proposed agreement goes through the parliament in Greece and what will happen if it doesn't?
If it doesn't? new elections and the dance begins again? (oh and they will be out of money and deadlines looming and all that. It will be a horrible mess.
Not idea about chances.
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On July 14 2015 01:35 disciple wrote:
What are the chances the proposed agreement goes through the parliament in Greece and what will happen if it doesn't?
Probably higher than we think. Though I doubt any of the other Greek parties want to blow things up, just yet. They'll let Tsipras take the fall before they blow things up. The other parties were the ones that agreed to the previous deals, after all.
The real fireworks aren't this agreement, though. It's when the Price Tag gets settled and what some of the other European countries respond with in their parliaments. This really isn't a "done deal" yet.
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On July 14 2015 01:17 Taf the Ghost wrote:Show nested quote +On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ The first bailout and all of the austerity measures weren't about helping Greece. It was wholly about preventing the collapse of the French & German banks. (Though some of the measures are good ideas in general. But they become "bad ideas" when it's being dictated by another Power. People respond like that.) The proper analogy is Greece was made to take the wrong medicine (and become addicted to it) to help the doctor's friends not take a huge financial hit.
Actually the proper analogy is that Greece had Ebola and instead of administering medicine, the doctors first put on hazmat suits before even going near Greece. In the meantime they told Greece to eat lots of fruit and veggies in the hope that the ebola would magically get better. It didn't, and now that the ebola is life-threatening, at least Germany, France and the rest of Europe are wearing hazmat suits. They were discussing whether or not it was worse saving Greece or just letting the ebola run its course. The compromise seems to be that they will put Greece on an IV drip as long as it gives Luxembourg a kidney and a lung for safekeeping.
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On July 14 2015 01:27 WhiteDog wrote:Show nested quote +On July 14 2015 01:19 Narw wrote:On July 14 2015 01:16 WhiteDog wrote:On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ It's not flawed at all, Greece did not had diabetes : this liberal idea that administration or anything is too big has been proved wrong many times. The economy is a circuit, when you reduce spending at a grand scale you create a recession by contracting the demand. It's pure logic. Maybe you want to stop projecting your personal views as facts and stop pretending that economists agree about everything. Yeah so modern economists do not agree on the existence of the keynesian multiplicator ? On the necessity of counter cylical economic policy ? This is really basic macroeconomy... The US had budgetary cuts lately, but they waited for growth and it didn't drive their economy in recession (where you can't pay your debt). The entire eurozone rules push for the exact opposite (spending during growth time and cuts during recession) explaining why we have such a high debt ratio and no efficience in fighting the crisis.
And this is exactly what im talking about. You are so sure that everything you write is 100% true. How you can just ignore the main flaw of keynesian multiplicator - the way government spending is financed. How you can ignore it when it comes to situation that is currently happening in Greece while discussing Greece situation at the same time. You sound like you just finished your economy classes at Univiersity, but your professor forgot to tell you at start of classes that theories are just theories and external and eviormental factors need to be taken into account.
And then you try to dot me with "basic macroeconomy...". Hillarious.
Also many pages ago i asked you how is Greece teaching Europe democracy in relation to the their referendum. I'm still waiting for the answer.
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Can we please stop with the shitty medical analogies?
The point of using an analogy is explaining an unclear situation. This is not the case here. The case we have here is multiple people with different views on a situation, and instead of trying to actually talk about the situation itself, they talk about analogies. But they only try to purport their view as an absolute certainty through these different analogies, and think that that is actually making a point about the real situation.
An analogy should be made to explain an argument, not instead of an argument.
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On July 14 2015 01:54 Narw wrote:Show nested quote +On July 14 2015 01:27 WhiteDog wrote:On July 14 2015 01:19 Narw wrote:On July 14 2015 01:16 WhiteDog wrote:On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ It's not flawed at all, Greece did not had diabetes : this liberal idea that administration or anything is too big has been proved wrong many times. The economy is a circuit, when you reduce spending at a grand scale you create a recession by contracting the demand. It's pure logic. Maybe you want to stop projecting your personal views as facts and stop pretending that economists agree about everything. Yeah so modern economists do not agree on the existence of the keynesian multiplicator ? On the necessity of counter cylical economic policy ? This is really basic macroeconomy... The US had budgetary cuts lately, but they waited for growth and it didn't drive their economy in recession (where you can't pay your debt). The entire eurozone rules push for the exact opposite (spending during growth time and cuts during recession) explaining why we have such a high debt ratio and no efficience in fighting the crisis. And this is exactly what im talking about. You are so sure that everything you write is 100% true. How you can just ignore the main flaw of keynesian multiplicator - the way government spending is financed. How you can ignore it when it comes to situation that is currently happening in Greece while discussing Greece situation at the same time. You sound like you just finished your economy classes at Univiersity, but your professor forgot to tell you at start of classes that theories are just theories and external and eviormental factors need to be taken into account. And then you try to dot me with "basic macroeconomy...". Hillarious. Also many pages ago i asked you how is Greece teaching Europe democracy in relation to the their referendum. I'm still waiting for the answer.
Hum I don't know how to respond. I made one claim, that reducing spending have negative effect on demand and push recession further and you talk to me about how to finance spending. Just the last five years in Greece is enough to support my claim, it's not economic theory, it's just basic empirical analysis : they reduced public spending and suffered a drop of 25 % of their GDP over 5 years.
I love it when people that actually disagree for ideological reasons wants to make it seems like what is proved to be true is an ideological discourse.
There are many people in this thread that argue that pro Greek argument are ideological. Those arguments were ideological in 2009 when people argued for a keynesian stimuli in Europe without much discussion on the reality of europe - Keynesian stimuli would have failed btw. Five years later and the eurozone GDP has not increased at all (or barely), and some countries are still below their pre crisis level, while the US is doing way better : how is it ideology ? We're just pointing out the obvious : the solutions are not the right one, just change.
The ideology is what prevent you from watching reality, not what I'm saying.
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When does the vote happen on Wednesday?
That's the next step in this process right?
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I think it has to be done by Wednesday, but could happen at any point. But this is a political process and it will be done on Wednesday.
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On July 14 2015 02:13 WhiteDog wrote:Show nested quote +On July 14 2015 01:54 Narw wrote:On July 14 2015 01:27 WhiteDog wrote:On July 14 2015 01:19 Narw wrote:On July 14 2015 01:16 WhiteDog wrote:On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ It's not flawed at all, Greece did not had diabetes : this liberal idea that administration or anything is too big has been proved wrong many times. The economy is a circuit, when you reduce spending at a grand scale you create a recession by contracting the demand. It's pure logic. Maybe you want to stop projecting your personal views as facts and stop pretending that economists agree about everything. Yeah so modern economists do not agree on the existence of the keynesian multiplicator ? On the necessity of counter cylical economic policy ? This is really basic macroeconomy... The US had budgetary cuts lately, but they waited for growth and it didn't drive their economy in recession (where you can't pay your debt). The entire eurozone rules push for the exact opposite (spending during growth time and cuts during recession) explaining why we have such a high debt ratio and no efficience in fighting the crisis. And this is exactly what im talking about. You are so sure that everything you write is 100% true. How you can just ignore the main flaw of keynesian multiplicator - the way government spending is financed. How you can ignore it when it comes to situation that is currently happening in Greece while discussing Greece situation at the same time. You sound like you just finished your economy classes at Univiersity, but your professor forgot to tell you at start of classes that theories are just theories and external and eviormental factors need to be taken into account. And then you try to dot me with "basic macroeconomy...". Hillarious. Also many pages ago i asked you how is Greece teaching Europe democracy in relation to the their referendum. I'm still waiting for the answer. Hum I don't know how to respond. I made one claim, that reducing spending have negative effect on demand and push recession further and you talk to me about how to finance spending. Just the last five years in Greece is enough to support my claim, it's not economic theory, it's just basic empirical analysis : they reduced public spending and suffered a drop of 25 % of their GDP over 5 years. I love it when people that actually disagree for ideological reasons wants to make it seems like what is proved to be true is an ideological discourse. There are many people in this thread that argue that pro Greek argument are ideological. Those arguments were ideological in 2009 when people argued for a keynesian stimuli in Europe without much discussion on the reality of europe - Keynesian stimuli would have failed btw. Five years later and the eurozone GDP has not increased at all (or barely), and some countries are still below their pre crisis level, while the US is doing way better : how is it ideology ? We're just pointing out the obvious : the solutions are not the right one, just change. The ideology is what prevent you from watching reality, not what I'm saying.
The GDP of Greece was just massively inflated because of the cheap money available. Compare it to Portugal for example. In 2000 Greece had 130,4 bn, Portugal 118,6. bn. In 2008 Greece 354 bn while Portugal was at 262 bn. They have to go through harder austerity now, cause they overdid so much more then the other "problem" countries.
And no it wasnt a trap. Other countries used this money to longterm investements strengthening their competitiveness while Greece used it, well to live a good life.
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On July 14 2015 02:41 Kenpark wrote:Show nested quote +On July 14 2015 02:13 WhiteDog wrote:On July 14 2015 01:54 Narw wrote:On July 14 2015 01:27 WhiteDog wrote:On July 14 2015 01:19 Narw wrote:On July 14 2015 01:16 WhiteDog wrote:On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ It's not flawed at all, Greece did not had diabetes : this liberal idea that administration or anything is too big has been proved wrong many times. The economy is a circuit, when you reduce spending at a grand scale you create a recession by contracting the demand. It's pure logic. Maybe you want to stop projecting your personal views as facts and stop pretending that economists agree about everything. Yeah so modern economists do not agree on the existence of the keynesian multiplicator ? On the necessity of counter cylical economic policy ? This is really basic macroeconomy... The US had budgetary cuts lately, but they waited for growth and it didn't drive their economy in recession (where you can't pay your debt). The entire eurozone rules push for the exact opposite (spending during growth time and cuts during recession) explaining why we have such a high debt ratio and no efficience in fighting the crisis. And this is exactly what im talking about. You are so sure that everything you write is 100% true. How you can just ignore the main flaw of keynesian multiplicator - the way government spending is financed. How you can ignore it when it comes to situation that is currently happening in Greece while discussing Greece situation at the same time. You sound like you just finished your economy classes at Univiersity, but your professor forgot to tell you at start of classes that theories are just theories and external and eviormental factors need to be taken into account. And then you try to dot me with "basic macroeconomy...". Hillarious. Also many pages ago i asked you how is Greece teaching Europe democracy in relation to the their referendum. I'm still waiting for the answer. Hum I don't know how to respond. I made one claim, that reducing spending have negative effect on demand and push recession further and you talk to me about how to finance spending. Just the last five years in Greece is enough to support my claim, it's not economic theory, it's just basic empirical analysis : they reduced public spending and suffered a drop of 25 % of their GDP over 5 years. I love it when people that actually disagree for ideological reasons wants to make it seems like what is proved to be true is an ideological discourse. There are many people in this thread that argue that pro Greek argument are ideological. Those arguments were ideological in 2009 when people argued for a keynesian stimuli in Europe without much discussion on the reality of europe - Keynesian stimuli would have failed btw. Five years later and the eurozone GDP has not increased at all (or barely), and some countries are still below their pre crisis level, while the US is doing way better : how is it ideology ? We're just pointing out the obvious : the solutions are not the right one, just change. The ideology is what prevent you from watching reality, not what I'm saying. The GDP of Greece was just massively inflated because of the cheap money available. Compare it to Portugal for example. In 2000 Greece had 130,4 bn, Portugal 118,6. bn. In 2008 Greece 354 bn while Portugal was at 262 bn. They have to go through harder austerity now, cause they overdid so much more then the other "problem" countries. And no it wasnt a trap. Other countries used this money to longterm investements strengthening their competitiveness while Greece used it, well to live a good life.
Which countries ? Give me proof, facts instead of biased comments with no ground like most of anti greeks in here. Where is the country in europe that is doing well since the euro, I'm waiting.
About inflated I won't even comment. People who wants to punish Greece always seem to respond off : my point stands with Portugal or any other countries in europe : their GDP dropped with Austerity and didn't permit them to reduce their GDP debt ratio... Portugal GDP dropped by more than 10 % 2009 and the last quarter of 2015 (from 262.01 billion to 229.58).
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Man this is the stuff of movies. Turns out Yanis did have a plan.
On the night of the referendum he had a plan, Tsipras just never quite agreed to it.
The Eurozone can dictate terms to Greece because it is no longer fearful of a Grexit. It is convinced that its banks are now protected if Greek banks default. But Varoufakis thought that he still had some leverage: once the ECB forced Greece’s banks to close, he could act unilaterally.
He said he spent the past month warning the Greek cabinet that the ECB would close Greece’s banks to force a deal. When they did, he was prepared to do three things: issue euro-denominated IOUs; apply a “haircut” to the bonds Greek issued to the ECB in 2012, reducing Greece’s debt; and seize control of the Bank of Greece from the ECB.
None of the moves would constitute a Grexit but they would have threatened it. Varoufakis was confident that Greece could not be expelled by the Eurogroup; there is no legal provision for such a move.
That's crazy. He was ready to put up a real fight.
source
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On July 14 2015 02:13 WhiteDog wrote:Show nested quote +On July 14 2015 01:54 Narw wrote:On July 14 2015 01:27 WhiteDog wrote:On July 14 2015 01:19 Narw wrote:On July 14 2015 01:16 WhiteDog wrote:On July 14 2015 01:01 ticklishmusic wrote:
This medical analogy is flawed. The EU didn't tell Greece to cut off an arm, it told it Greece to lose some weight because it had diabetes and heart disease in exchange for assistance to buy healthy food. Greece spent the money on gourmet candy/ It's not flawed at all, Greece did not had diabetes : this liberal idea that administration or anything is too big has been proved wrong many times. The economy is a circuit, when you reduce spending at a grand scale you create a recession by contracting the demand. It's pure logic. Maybe you want to stop projecting your personal views as facts and stop pretending that economists agree about everything. Yeah so modern economists do not agree on the existence of the keynesian multiplicator ? On the necessity of counter cylical economic policy ? This is really basic macroeconomy... The US had budgetary cuts lately, but they waited for growth and it didn't drive their economy in recession (where you can't pay your debt). The entire eurozone rules push for the exact opposite (spending during growth time and cuts during recession) explaining why we have such a high debt ratio and no efficience in fighting the crisis. And this is exactly what im talking about. You are so sure that everything you write is 100% true. How you can just ignore the main flaw of keynesian multiplicator - the way government spending is financed. How you can ignore it when it comes to situation that is currently happening in Greece while discussing Greece situation at the same time. You sound like you just finished your economy classes at Univiersity, but your professor forgot to tell you at start of classes that theories are just theories and external and eviormental factors need to be taken into account. And then you try to dot me with "basic macroeconomy...". Hillarious. Also many pages ago i asked you how is Greece teaching Europe democracy in relation to the their referendum. I'm still waiting for the answer. Hum I don't know how to respond. I made one claim, that reducing spending have negative effect on demand and push recession further and you talk to me about how to finance spending. Just the last five years in Greece is enough to support my claim, it's not economic theory, it's just basic empirical analysis : they reduced public spending and suffered a drop of 25 % of their GDP over 5 years. I love it when people that actually disagree for ideological reasons wants to make it seems like what is proved to be true is an ideological discourse. There are many people in this thread that argue that pro Greek argument are ideological. Those arguments were ideological in 2009 when people argued for a keynesian stimuli in Europe without much discussion on the reality of europe - Keynesian stimuli would have failed btw. Five years later and the eurozone GDP has not increased at all (or barely), and some countries are still below their pre crisis level, while the US is doing way better : how is it ideology ? We're just pointing out the obvious : the solutions are not the right one, just change. The ideology is what prevent you from watching reality, not what I'm saying.
You're making a very false assumption here, which is that correlation = causation. It clearly and obviously isn't in this case. Greece's GDP was going to shrink by an enormous amount regardless of what else happened, because the unbridled borrowing of money that was causing their inflated GDP was over. Austerity wasn't the cause of the shrinkage of the GDP. Now economists can, and do, argue about whether Greece's economy had to shrink by that much, or whether austerity made things worse, but taking the latter as fact is disingenious. Especially when you discard counterarguments as nonsense (such as that austerity actually worked in Portugal and Ireland, and most recently seems to be bearing fruits in Spain too).
The EU economy growing slower than the US economy is not an argument against austerity. A million confounding factors influence that, ranging from China, through the Ukraine and Greece, to fricking Obamacare. You cannot point at one of the many factors and say: THAT is what is causing the EU economy to grow slower without a LOT more analysis than you have shown.
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So, what do you think should happen? Should the rest of europe just keep on throwing even more money into the bottomless pit that is greece and hope that that will suddenly start working?
The general keynesian idea of spending during recession and saving during growth periods is a very solid idea, and seems to be working. The sad reality is that it seems to be very hard to convince people of the "saving during growth" part of it, which in the end means that you have budgetary problems. Spending more money will increase your GDP, obviously. However, that money has to come from somewhere. This basically means taxes. Either taxes right now, taxes in the past if you managed to save up some money, or even more taxes in the future if you borrow the money now. And taxes will take money out of the economy and thus reduce your GDP again.
Thus, there needs to be a balance. You can not spend infinite money for growth, because that money has to come from somewhere. Tricks like inflating your currency etc might work in the short term, but in the long term they will also similarly inflate your rates for borrowing money, simply because the people who lend you money are not stupid and expect a positive return for their investment.
The problem that greece currently has is that they spent during growth periods, and spent even more during recessions, which leads to them spending even more to pay back their loans. This is not sustainable. And spending even more will not fix that, especially if you have a problem finding people who will lend you money, because they doubt that they will ever see that money again. Which is a risk they calculate into the money they offer, which means borrowing is more expensive. "Just spend more money to get more growth" is not a solution to the current greek problem. Stopping to spend money is also not a good solution to the problem they have. Basically, i do not think that there is a simple solution to their problem, and everyone who claims to have one is probably either deluded or lying.
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I read you comment and see a kid saying nanana with its hand on its ears.
Inflated GDP ? What's that ? Most GDP indicator you see is deflated (it's in real terms). It does not measure the money in an economy, but the value added produced by one economy : it's good and services minus the cost used to produce them.
Meanwhile even the IMF has acknowledge the negative effect of the forced reform on Greek economy :
The top economist at the International Monetary Fund (IMF) one of Greece’s Troika of lender, has admitted that the agency didn’t calculate how devastating the austerity measures it wanted would be on the Greek economy and those of other struggling European countries.
The IMF, along with the European Union and European Central Bank, are putting up $325 billion in two bailouts to keep the Greek economy from collapsing, but the deep pay cuts, tax hikes and slashed pensions it insisted upon cut so much into revenues and limited growth that it skewed how long a recovery would take, Olivier Blanchard said in a report, according to the Washington Post.
http://greece.greekreporter.com/2013/01/05/imf-miscalculated-greek-austerity-effect/
But the IMF must be just like me, mistaking their own ideology for facts right ?
The general keynesian idea of spending during recession and saving during growth periods is a very solid idea, and seems to be working. The sad reality is that it seems to be very hard to convince people of the "saving during growth" part of it, which in the end means that you have budgetary problems. Spending more money will increase your GDP, obviously. However, that money has to come from somewhere. This basically means taxes. Either taxes right now, taxes in the past if you managed to save up some money, or even more taxes in the future if you borrow the money now. And taxes will take money out of the economy and thus reduce your GDP again.
We could have created rules in the eurozone to force people to reduce public spending during growth. Meanwhile we have a rule that prevent more than 3% deficit, so everybody reach for 3% deficit whatever the economic situation, which promote the exact opposite : too much spending during growth; and not enough spending during crisis.
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On July 13 2015 20:32 unsaeglich wrote:
EU is always a loss for each country, a loss of Freedom, an economic loss.
Like a comment in a german newspaper said: An affectionate partnership turned into a violent marriage.
There is a reason the Euro is generally popular, and its because its not a loss of freedom for an individual person in a country, just like the dollar doesn't piss off a Californian or Alabamian. It actually protects then, to an extent, from their local government. What it does do is reduce the freedom of governments because they cannot inflate away their debts, or debts in general.
This is important, because it demonstrates how the Greek government can be profligate and irresponsible, without attacking individual Greeks.
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On July 14 2015 03:02 c0ldfusion wrote:Man this is the stuff of movies. Turns out Yanis did have a plan. Show nested quote +On the night of the referendum he had a plan, Tsipras just never quite agreed to it.
The Eurozone can dictate terms to Greece because it is no longer fearful of a Grexit. It is convinced that its banks are now protected if Greek banks default. But Varoufakis thought that he still had some leverage: once the ECB forced Greece’s banks to close, he could act unilaterally.
He said he spent the past month warning the Greek cabinet that the ECB would close Greece’s banks to force a deal. When they did, he was prepared to do three things: issue euro-denominated IOUs; apply a “haircut” to the bonds Greek issued to the ECB in 2012, reducing Greece’s debt; and seize control of the Bank of Greece from the ECB.
None of the moves would constitute a Grexit but they would have threatened it. Varoufakis was confident that Greece could not be expelled by the Eurogroup; there is no legal provision for such a move. That's crazy. He was ready to put up a real fight. source
Pretty amazing article. He sounds like a man with integrity, something of a rarity in politics. He also was clearly not a politician, and hence his downfall. I kinda lost respect for him when he resigned over the "impossibility" of his negotiating with the Eurogroup, but this interview sheds a new light on the happenings. The plan he had was quite amazing (and equally amazingly rash to gamble with an entire country's population like that).
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Yeah, Yanis had balls of steel.
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EPT
