|
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. |
Two weeks ago I feared that the idea of Europe was dead and buried, and Greece was on its way to becoming a third world failed state within the borders of Europe. That would be an embarrassment and a stain on Europe for the whole world to see. Then something happened which I did not previously foresee being possible. The IMF defected from the German coalition and for the first time publicly criticized their position, and made clear they could not continue together down the road that Germany was heading. The IMF was finally saying openly the same thing that economists around the world were saying for years: Greece requires debt relief and help to recover its economy (reading between the lines: putting an end to austerity.) When English and Greek-speaking economists were saying this it was easy for Germany to ignore, but the IMF was impossible to ignore. The IMF is a partner of Germany, chosen by Angela Merkel for their expertise on bailouts, has already participated in two bailouts with Germany as part of the troika, and whose money Germany was counting on for a third. For the first time, Germany was forced to listen.
Since the IMF came out and said this, the ECB publicly agreed, stating that Greece needs debt relief. I noticed the other day during the bailout vote, Germany's vice-chancellor and coalition partner Sigmar Gabriel said: "IMF analysis clearly says Europe and Greece needs investment and growth, and we (the SPD) agree." I am to understand this man has previously been a hardliner on the Greece issue. Even Wolfgang Schäuble, whose reputation is now well-known throughout Europe, has said Greece requires debt relief (albeit only with a Greece tossed out of Europe.) The Greek government agrees. Economists agree. Everyone agrees that Greece requires *significant* debt relief. So within a couple weeks, of an idea that was previously considered impossible, 3/3 of the troika are now in agreement on. So now it is only a question of how to make it happen seeing as outright debt forgiveness is still considered impossible and illegal by the Merkel government as long as Greece remains in the eurozone.
Today Yanis Varoufakis was quoted as saying that the 3rd bailout programme is doomed to fail. I disagree; in fact I feel that for the first time during this crisis, there seems to be hope for success. According to the analysis of economists, much of the damage to Greece's economy since the bailouts has been due to the austerity policy and not their fecklessness. Greece's economy, already in crisis, simply could not handle the additional strangulation of an unending 4% budget surplus while maintaining a fixed exchange rate that is, for their economy, far too overvalued. If this is true, which there is abundant evidence and models to suggest, then ending the austerity policy should allow Greece's economy to recover and return to growth. There is no doubt that Greece, while implementing some structural reforms, had not gone far enough. Although it has been far from the ideal way to do so, Germany's appropriation of Greece's sovereignty in the recent agreement now permits them to push through every structural reform Greece needs, to their heart's content. In my opinion, the combination of an end to austerity and German-led massive structural reforms would allow the Greek economy to recover and end this crisis.
This crisis is still very far from solved, but I believe the IMF's criticism has been a game-changer, and has been heard loudly in Germany. The 3rd bailout negotiations will soon commence, but there will be no real negotiations. The Greek government has already surrendered, signed away its rights, and given the keys to Germany. Merkel has broken Syriza in half and Greece is at the mercy now of whatever Germany decides. Germany is in the driver's seat now, they have full control over the Greek state and the direction of this crisis. Only one side will be at the negotiating table. It is all up to them to make the responsible decisions to fix this crisis. My hope is that the concerted political pressure of their allies: the IMF, ECB, France, Italy...will force them to back off from the austerity policy and offer Greece significant debt relief. Germany would have to volunteer to make this massive concession of their own free will, in the belief that it is the right thing to do. It will not be enough to offer Greece a figleaf and a few drops of money while broadly maintaining the austerity policy: that path will lead to the failure that many including Varoufakis, Schäuble and the IMF predict.
I also hope there will be pressure from within Germany to take this sensible path, as German voices are the ones that matter most to the German government. All this still appears politically extremely unlikely. It would require a U-turn from the Merkel government so violent it could well break her in two. But it is the best way for Germany, the best way for Greece, and the best way for Europe. If that way is politically impossible, then politics will have been a total failure.
This is the 3rd and last bailout. There will be no more bailouts. This one must succeed, or it will be a huge failure for Europe. I will also note that with Greece having surrendered to every single one of Germany's demands and having handed over its sovereignty to Germany, Germany is in complete control. They now have assumed total responsibility for this situation and its outcome. If this 3rd bailout also fails, as many predict...there will be only one to blame.
|
On July 19 2015 11:03 Evil_Sheep wrote:Two weeks ago I feared that the idea of Europe was dead and buried, and Greece was on its way to becoming a third world failed state within the borders of Europe. That would be an embarrassment and a stain on Europe for the whole world to see. Then something happened which I did not previously foresee being possible. The IMF defected from the German coalition and for the first time publicly criticized their position, and made clear they could not continue together down the road that Germany was heading. The IMF was finally saying openly the same thing that economists around the world were saying for years: Greece requires debt relief and help to recover its economy (reading between the lines: putting an end to austerity.) When English and Greek-speaking economists were saying this it was easy for Germany to ignore, but the IMF was impossible to ignore. The IMF is a partner of Germany, chosen by Angela Merkel for their expertise on bailouts, has already participated in two bailouts with Germany as part of the troika, and whose money Germany was counting on for a third. For the first time, Germany was forced to listen. Since the IMF came out and said this, the ECB publicly agreed, stating that Greece needs debt relief. I noticed the other day during the bailout vote, Germany's vice-chancellor and coalition partner Sigmar Gabriel said: "IMF analysis clearly says Europe and Greece needs investment and growth, and we (the SPD) agree." I am to understand this man has previously been a hardliner on the Greece issue. Even Wolfgang Schäuble, whose reputation is now well-known throughout Europe, has said Greece requires debt relief (albeit only with a Greece tossed out of Europe.) The Greek government agrees. Economists agree. Everyone agrees that Greece requires *significant* debt relief. So within a couple weeks, of an idea that was previously considered impossible, 3/3 of the troika are now in agreement on. So now it is only a question of how to make it happen seeing as outright debt forgiveness is still considered impossible and illegal by the Merkel government as long as Greece remains in the eurozone. Today Yanis Varoufakis was quoted as saying that the 3rd bailout programme is doomed to fail. I disagree; in fact I feel that for the first time during this crisis, there seems to be hope for success. According to the analysis of economists, much of the damage to Greece's economy since the bailouts has been due to the austerity policy and not their fecklessness. Greece's economy, already in crisis, simply could not handle the additional strangulation of an unending 4% budget surplus while maintaining a fixed exchange rate that is, for their economy, far too overvalued. If this is true, which there is abundant evidence and models to suggest, then ending the austerity policy should allow Greece's economy to recover and return to growth. There is no doubt that Greece, while implementing some structural reforms, had not gone far enough. Although it has been far from the ideal way to do so, Germany's appropriation of Greece's sovereignty in the recent agreement now permits them to push through every structural reform Greece needs, to their heart's content. In my opinion, the combination of an end to austerity and German-led massive structural reforms would allow the Greek economy to recover and end this crisis. This crisis is still very far from solved, but I believe the IMF's criticism has been a game-changer, and has been heard loudly in Germany. The 3rd bailout negotiations will soon commence, but there will be no real negotiations. The Greek government has already surrendered, signed away its rights, and given the keys to Germany. Merkel has broken Syriza in half and Greece is at the mercy now of whatever Germany decides. Germany is in the driver's seat now, they have full control over the Greek state and the direction of this crisis. Only one side will be at the negotiating table. It is all up to them to make the responsible decisions to fix this crisis. My hope is that the concerted political pressure of their allies: the IMF, ECB, France, Italy...will force them to back off from the austerity policy and offer Greece significant debt relief. Germany would have to volunteer to make this massive concession of their own free will, in the belief that it is the right thing to do. It will not be enough to offer Greece a figleaf and a few drops of money while broadly maintaining the austerity policy: that path will lead to the failure that many including Varoufakis, Schäuble and the IMF predict. I also hope there will be pressure from within Germany to take this sensible path, as German voices are the ones that matter most to the German government. All this still appears politically extremely unlikely. It would require a U-turn from the Merkel government so violent it could well break her in two. But it is the best way for Germany, the best way for Greece, and the best way for Europe. If that way is politically impossible, then politics will have been a total failure. This is the 3rd and last bailout. There will be no more bailouts. This one must succeed, or it will be a huge failure for Europe. I will also note that with Greece having surrendered to every single one of Germany's demands and having handed over its sovereignty to Germany, Germany is in complete control. They now have assumed total responsibility for this situation and its outcome. If this 3rd bailout also fails, as many predict...there will be only one to blame.
2 to blame:the greeks are handing themselves over, they will also have to accept any consequences.
|
If there is such a big anti-Germany coalition, why do they need the Germans' money?
|
On July 19 2015 11:32 cLutZ wrote:
If there is such a big anti-Germany coalition, why do they need the Germans' money?
Exactly, default on the debt, tell Germany and the Euro that they knew the risks, and don't take any more money, BOOM problem solved. Greece gets their debt relief, taxpayers don't waste any more money and those who believe in the idea of the Euro keep it together. Everybody wins.
|
On July 19 2015 11:32 cLutZ wrote:
If there is such a big anti-Germany coalition, why do they need the Germans' money?
There is no big anti-Germany coalition.
On July 19 2015 12:03 Wolfstan wrote:Show nested quote +On July 19 2015 11:32 cLutZ wrote:
If there is such a big anti-Germany coalition, why do they need the Germans' money? Exactly, default on the debt, tell Germany and the Euro that they knew the risks, and don't take any more money, BOOM problem solved. Greece gets their debt relief, taxpayers don't waste any more money and those who believe in the idea of the Euro keep it together. Everybody wins.
Greece has been trying to negotiate a default for months but has been prevented by Germany which has hitherto refused to acknowledge Greece is insolvent. If Greece were to pursue a path of disorderly default, in all likelihood that would result in them leaving the eurozone. Greeks clearly communicated they did not want to pursue that path which could also result in them being expelled from the EU and that is why these negotiations with Germany, the primary creditor, have been taking place. With the result we have today.
|
On July 19 2015 12:40 Evil_Sheep wrote:Show nested quote +On July 19 2015 11:32 cLutZ wrote:
If there is such a big anti-Germany coalition, why do they need the Germans' money? There is no big anti-Germany coalition. Show nested quote +On July 19 2015 12:03 Wolfstan wrote:On July 19 2015 11:32 cLutZ wrote:
If there is such a big anti-Germany coalition, why do they need the Germans' money? Exactly, default on the debt, tell Germany and the Euro that they knew the risks, and don't take any more money, BOOM problem solved. Greece gets their debt relief, taxpayers don't waste any more money and those who believe in the idea of the Euro keep it together. Everybody wins. Greece has been trying to negotiate a default for months but has been prevented by Germany which has hitherto refused to acknowledge Greece is insolvent. If Greece were to pursue a path of disorderly default, in all likelihood that would result in them leaving the eurozone. Greeks clearly communicated they did not want to pursue that path which could also result in them being expelled from the EU and that is why these negotiations with Germany, the primary creditor, have been taking place. With the result we have today.
Of course there isn't. There are just a bunch of countries and orgs that want to look like the "cool uncle".
|
On July 19 2015 04:52 lord_nibbler wrote:
Then Germany just does not agree to it and keeps 100% of the Greek loans in the books. And if Greeks continue to bother, Germany demands them all back in full ... in a week!
You want a pissing contest? The creditor always has the upper hand, because capitalism fuck yea!
Well you know...
If your small local bank $10.000 they have the upper hand
But if you owe them $100.000.000, guess who would really like his money back?
|
Well $300 billion really isn't all that much compared to the size of the creditors. Worst comes to worst, the EU loses 2% of its GDP worth of loans. It's more about principle and precedent than about the actual sum of money. Markets won't crash from a Grexit.
Greece, on the other hand, has a lot to lose from being cut off completely from capital markets. Their economy is not particularly self-sufficient and wouldn't be able to handle that without significant pain.
|
On July 19 2015 11:03 Evil_Sheep wrote:
Today Yanis Varoufakis was quoted as saying that the 3rd bailout programme is doomed to fail. I disagree; in fact I feel that for the first time during this crisis, there seems to be hope for success. According to the analysis of economists, much of the damage to Greece's economy since the bailouts has been due to the austerity policy and not their fecklessness. Greece's economy, already in crisis, simply could not handle the additional strangulation of an unending 4% budget surplus while maintaining a fixed exchange rate that is, for their economy, far too overvalued. If this is true, which there is abundant evidence and models to suggest, then ending the austerity policy should allow Greece's economy to recover and return to growth. There is no doubt that Greece, while implementing some structural reforms, had not gone far enough. Although it has been far from the ideal way to do so, Germany's appropriation of Greece's sovereignty in the recent agreement now permits them to push through every structural reform Greece needs, to their heart's content. In my opinion, the combination of an end to austerity and German-led massive structural reforms would allow the Greek economy to recover and end this crisis.
What models are you talking about? I hope aren't the same ones
http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/presentation_4th_review_2nd_programme_brussels_en.pdf
These report said Greece was near to have a primary surplus of 0.8% at the end 2015, completely forgetting the recapitalization of banks, which if counted would lead to an astonishing -10.6% ironically the same governement balance of 2009. I don't like to play the little economist, still, I wonder which models can be reliable when official EU ones are plain propaganda and which ones are you referring to.
|
On July 19 2015 19:07 InVerno wrote:Show nested quote +On July 19 2015 11:03 Evil_Sheep wrote:
Today Yanis Varoufakis was quoted as saying that the 3rd bailout programme is doomed to fail. I disagree; in fact I feel that for the first time during this crisis, there seems to be hope for success. According to the analysis of economists, much of the damage to Greece's economy since the bailouts has been due to the austerity policy and not their fecklessness. Greece's economy, already in crisis, simply could not handle the additional strangulation of an unending 4% budget surplus while maintaining a fixed exchange rate that is, for their economy, far too overvalued. If this is true, which there is abundant evidence and models to suggest, then ending the austerity policy should allow Greece's economy to recover and return to growth. There is no doubt that Greece, while implementing some structural reforms, had not gone far enough. Although it has been far from the ideal way to do so, Germany's appropriation of Greece's sovereignty in the recent agreement now permits them to push through every structural reform Greece needs, to their heart's content. In my opinion, the combination of an end to austerity and German-led massive structural reforms would allow the Greek economy to recover and end this crisis.
What models are you talking about? I hope aren't the same ones http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/presentation_4th_review_2nd_programme_brussels_en.pdfThese report said Greece was near to have a primary surplus of 0.8% at the end 2015, completely forgetting the recapitalization of banks, which if counted would lead to an astonishing -10.6% ironically the same governement balance of 2009. I don't like to play the little economist, still, I wonder which models can be reliable when official EU ones are plain propaganda and which ones are you referring to.
I'm talking about standard macroeconomic models and theories. This would be a good explanation of the kind of textbook economics at work (a bit hard to understand for those without an economics background.) This post I linked to earlier graphically illustrates the correlation between austerity and growth in the eurozone during the crisis. The conclusion, consistent with standard macroeconomic theories, is that reducing austerity would increase output and allow the Greek economy the chance to recover.
|
When people(Varoufakis, others) talk about 'models' they mean simulations run on supercomputers. I am sure the eurogroup and the IMF sure them, as well as major banks and probably most governments including Greece.
They don't mean a standard text on introductory macroeconomics.
The stuff that leaks out is that in not a single model, Greek economy does well. And that includes the IMF computer models that were very wrong the last 5 years in predicting significant growth when all reality did was decline.
So even in a model that overestimates growth/the positive effect of austerity, the current plan turns out to be bad.
Also, mainstream economic theory doesn't say austerity helps an economy in crisis recover. The whole idea is fringy in economics, mainstream only in politics as it resonates with the voter because unlike economics, in politics there's the question of guilt and that has to be spinned the right way and solutions reflect who is guilty.
|
On July 19 2015 19:29 Evil_Sheep wrote:Show nested quote +On July 19 2015 19:07 InVerno wrote:On July 19 2015 11:03 Evil_Sheep wrote:
Today Yanis Varoufakis was quoted as saying that the 3rd bailout programme is doomed to fail. I disagree; in fact I feel that for the first time during this crisis, there seems to be hope for success. According to the analysis of economists, much of the damage to Greece's economy since the bailouts has been due to the austerity policy and not their fecklessness. Greece's economy, already in crisis, simply could not handle the additional strangulation of an unending 4% budget surplus while maintaining a fixed exchange rate that is, for their economy, far too overvalued. If this is true, which there is abundant evidence and models to suggest, then ending the austerity policy should allow Greece's economy to recover and return to growth. There is no doubt that Greece, while implementing some structural reforms, had not gone far enough. Although it has been far from the ideal way to do so, Germany's appropriation of Greece's sovereignty in the recent agreement now permits them to push through every structural reform Greece needs, to their heart's content. In my opinion, the combination of an end to austerity and German-led massive structural reforms would allow the Greek economy to recover and end this crisis.
What models are you talking about? I hope aren't the same ones http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/presentation_4th_review_2nd_programme_brussels_en.pdfThese report said Greece was near to have a primary surplus of 0.8% at the end 2015, completely forgetting the recapitalization of banks, which if counted would lead to an astonishing -10.6% ironically the same governement balance of 2009. I don't like to play the little economist, still, I wonder which models can be reliable when official EU ones are plain propaganda and which ones are you referring to. I'm talking about standard macroeconomic models and theories. This would be a good explanation of the kind of textbook economics at work (a bit hard to understand for those without an economics background.) This post I linked to earlier graphically illustrates the correlation between austerity and growth in the eurozone during the crisis. The conclusion, consistent with standard macroeconomic theories, is that reducing austerity would increase output and allow the Greek economy the chance to recover.
The problem is that an euro without austerity doesn't exist, even Shauble said it between the lines several times, and even if I don't trust his knowledge like I would trust Krugman or other good economists that you may link, I trust him as a decision maker in the meaning of that will never happen.
|
don't worry, evil_sheep, the u-turn is merkel's political go to maneuver.
she's made pragmatism into a synonym to opportunism, and the people love her for it. :D
also i can't understand why anyone would trust a man who's taken a bribe from arms lobbyists in the past with the position of german finance minister.
https://en.wikipedia.org/wiki/CDU_donations_scandal
isn't that all a bit concerning?
|
Who can't trust a man who has survived three scandals that each individually would end the career of an ordinary politician? This is not an ordinary man. When he is knocked down, he just stands back up and keep going with his goal to gain power.
|
On July 19 2015 21:51 Noizhende wrote:don't worry, evil_sheep, the u-turn is merkel's political go to maneuver. she's made pragmatism into a synonym to opportunism, and the people love her for it. :D also i can't understand why anyone would trust a man who's taken a bribe from arms lobbyists in the past with the position of german finance minister. https://en.wikipedia.org/wiki/CDU_donations_scandalisn't that all a bit concerning?
Was linked before. If you want to know peoples opinions you should search back a bit.
|
On July 19 2015 22:10 Gorsameth wrote:Show nested quote +On July 19 2015 21:51 Noizhende wrote:don't worry, evil_sheep, the u-turn is merkel's political go to maneuver. she's made pragmatism into a synonym to opportunism, and the people love her for it. :D also i can't understand why anyone would trust a man who's taken a bribe from arms lobbyists in the past with the position of german finance minister. https://en.wikipedia.org/wiki/CDU_donations_scandalisn't that all a bit concerning? Was linked before. If you want to know peoples opinions you should search back a bit.
ok, can't be said enough though, because people still seem to trust anything the cdu says/does
|
On July 19 2015 21:51 Noizhende wrote:don't worry, evil_sheep, the u-turn is merkel's political go to maneuver. she's made pragmatism into a synonym to opportunism, and the people love her for it. :D also i can't understand why anyone would trust a man who's taken a bribe from arms lobbyists in the past with the position of german finance minister. https://en.wikipedia.org/wiki/CDU_donations_scandalisn't that all a bit concerning?
If he was a southern politician he would have been destroyed by german media, but since he is german than it's all fine :D.
|
On July 19 2015 22:12 Noizhende wrote:Show nested quote +On July 19 2015 22:10 Gorsameth wrote:On July 19 2015 21:51 Noizhende wrote:don't worry, evil_sheep, the u-turn is merkel's political go to maneuver. she's made pragmatism into a synonym to opportunism, and the people love her for it. :D also i can't understand why anyone would trust a man who's taken a bribe from arms lobbyists in the past with the position of german finance minister. https://en.wikipedia.org/wiki/CDU_donations_scandalisn't that all a bit concerning? Was linked before. If you want to know peoples opinions you should search back a bit. ok, can't be said enough though, because people still seem to trust anything the cdu says/does
Oh please .... In Germany everybody knows not to trust the word of a politician. "Why would I care about the things I said yesterday?" That´s a famous saying by Konrad Adenauer. The first chancellor of today´s Germany. CDU by the way. Same as Merkel.
That´s why Germans should never listen to promises prior to elections. Yet many do 
|
Can someone point me to the part were he was found guilty by a court, can't find it in that link? Like your "certain italian politician".
|
On July 19 2015 22:55 Hondelul wrote:
Can someone point me to the part were he was found guilty by a court, can't find it in that link? Like your "certain italian politician".
I never talked about any italian politician.
Nice try though.
Sad to see that some people are so quickly to dismiss facts and use two different weight measures when it comes to corruption.
On July 19 2015 22:54 Elizar wrote:Show nested quote +On July 19 2015 22:12 Noizhende wrote:On July 19 2015 22:10 Gorsameth wrote:On July 19 2015 21:51 Noizhende wrote:don't worry, evil_sheep, the u-turn is merkel's political go to maneuver. she's made pragmatism into a synonym to opportunism, and the people love her for it. :D also i can't understand why anyone would trust a man who's taken a bribe from arms lobbyists in the past with the position of german finance minister. https://en.wikipedia.org/wiki/CDU_donations_scandalisn't that all a bit concerning? Was linked before. If you want to know peoples opinions you should search back a bit. ok, can't be said enough though, because people still seem to trust anything the cdu says/does Oh please .... In Germany everybody knows not to trust the word of a politician. "Why would I care about the things I said yesterday?" That´s a famous saying by Konrad Adenauer. The first chancellor of today´s Germany. CDU by the way. Same as Merkel. That´s why Germans should never listen to promises prior to elections. Yet many do
Well but many germans (over 50% iirc) still like this guy, or am I wrong? They are probably the same people that crucified half of a continent because of "corruption".
Just pointing out some hypocrisy...
|
|
|
|
|
|
EPT
