A Golden Dawn in Greece

Scofflaw

SeanW wrote: »

Ha ha ha ha ... oh wait, you're actually serious. :eek:

I'm not a big fan of Keynesian economics, but in this case given the degree to which the Greek economy has collapsed suggests that they need repudiate debts they can't pay and devalue their currency to make their exports cheaper and imports more expensive, so that they might have a fighting chance at recovery. As it stands more than 50% of their youth is unemployed and their economy is receeding by better than 5% a year since their collapse began, with no end in sight. Unless someone does *something* over there, they are going to be destroyed.

They don't really have much in the way of exports - their export profile is like a Third World country, agricultural products, mineral ores, and raw materials, and a lot of things we would consider 'necessities' rather than 'luxuries' are imported.

Whereas Ireland is the second or third biggest exporter in the EU (in absolute terms, not per capita). Exporting a "solution" that might help us - although not that much compared to internal devaluation - won't do anything for the Greeks.

cordially,
Scofflaw

SeanW

Scofflaw wrote: »

They don't really have much in the way of exports - their export profile is like a Third World country, agricultural products, mineral ores, and raw materials, and a lot of things we would consider 'necessities' rather than 'luxuries' are imported.

Whereas Ireland is the second or third biggest exporter in the EU (in absolute terms, not per capita). Exporting a "solution" that might help us - although not that much compared to internal devaluation - won't do anything for the Greeks.

cordially,
Scofflaw

And there's a very good reason for the point you made in bold - Greece itself is like a 3rd world country, their economy, their culture, their way of doing business is radically different to that of Germany, or Finland. As such, they were never suited to sharing a currency zone with those countries and they never, ever have joined a Eurozone whose monetary policy would be out of step with their needs as an independent nation.

Normally I am a fan of "hard" currency, backed by gold. But in the case of Greece, whose economy suffered a massive boom and bust thanks to its membership of the Euro, now finds itself unable to devalue its currency, which is what countries in trouble often usually do. You mentioned that Greece imports a lot of things, presumably because it does not have an industrial base. Do you not agree that a devaluing currency, combined perhaps with a policy of low interest loans to SME businesses, might see Greece develop an industrial capacity?

Edit: you also mentioned internal devaluation, which I agree might help, but take for example the need to reduce the public sector pay bill. Which do you think is more likely to get past the ultra-powerful public sector unions?

1. We're cutting your pay 10%
2. We're devaluing our currency by 10%.

Scofflaw

SeanW wrote: »

And there's a very good reason for the point you made in bold - Greece itself is like a 3rd world country, their economy, their culture, their way of doing business is radically different to that of Germany, or Finland. As such, they were never suited to sharing a currency zone with those countries and they never, ever have joined a Eurozone whose monetary policy would be out of step with their needs as an independent nation.

Normally I am a fan of "hard" currency, backed by gold. But in the case of Greece, whose economy suffered a massive boom and bust thanks to its membership of the Euro, now finds itself unable to devalue its currency, which is what countries in trouble often usually do. You mentioned that Greece imports a lot of things, presumably because it does not have an industrial base. Do you not agree that a devaluing currency, combined perhaps with a policy of low interest loans to SME businesses, might see Greece develop an industrial capacity?

Edit: you also mentioned internal devaluation, which I agree might help, but take for example the need to reduce the public sector pay bill. Which do you think is more likely to get past the ultra-powerful public sector unions?

1. We're cutting your pay 10%
2. We're devaluing our currency by 10%.

Oh, always the latter, for preference, although it hits everybody. But the idea that a devaluing currency would produce a Greek industrial base - no, I don't really see it. The drachma didn't, after all.

Playing industrial catch-up usually involves, at least for the first while, importing industry through FDI. I can't see Greece being an attractive FDI destination even with - perhaps even particularly with - an independent currency.

cordially,
Scofflaw

SeanW

Scofflaw wrote: »

Oh, always the latter, for preference, although it hits everybody. But the idea that a devaluing currency would produce a Greek industrial base - no, I don't really see it. The drachma didn't, after all.

Playing industrial catch-up usually involves, at least for the first while, importing industry through FDI. I can't see Greece being an attractive FDI destination even with - perhaps even particularly with - an independent currency.

cordially,
Scofflaw

You say that Greece's export profile is like that of a 3rd world country - agricultural produce, mined resources etc. Consider for a moment that if Greece were to get the Drachma back, and to devalue and as such reduce their cost base that way, that the money they get from these exports would go further, locally. There is also the issue of tourism, another of Greece's important industries, this would be more attractive to foreigners as the cost of a holiday in Greece would fall, partly in line with the falling Drachma.

As to the matter of industrialisation, a falling currency has two key benefits - things made locally get cheaper, imports become more expensive so there's a new local market for import substitution.

I'm going to go out on a limb here with a hypothetical story of how Greece might start to recover.

Say that a Nigel Farage-esque figure emerges, we'll call him Nigelli Faregii, and he starts a political party called "Greece of Freedom and Demomcracy." His party wins the next Greek election and the first thing he does is balance the Greek budget by cutting spending on inefficient programs and goes after the tax dodgers, to balance the budget within a year.

Next his government defaults on their soverign debt, their country is basically destroyed so it wouldn't be unexpected. They reassert their soverignty and the right of the Greek Central Bank to lay down monetary policy for the Hellenic Republic.

As part of the Drachmas' devaluation, P.M. Faregii establishes the Hellenic Reconstruction Bank, a commercial bank with a mandate to extend credit to Greek businesses and entrepreneurs. The bank starts after being capitalised by the Greek Central Bank. Imports have become more expensive, so Greeks get used to using local products where possible, or importing 2nd hand things like cars, computers and whatever (as Ireland did before the 1990s).

Meanwhile, just outside Thessaloniki, the Entreprenurii family owns a small mine and a medium sized farm. The father, Michaeli, had the foresight to put away the familys' money into gold and Euro cash. His son, Gianni, is coming of age and now the familys money can afford to send him to a good business school (the latter having become "cheaper" in Euro terms). He learns how to start and run a manufacturing business.

So Gianni graduates and immediately starts a manufacturing business, with a fat loan from the Hellenic Reconstruction Bank, he purchases an abandoned building outside Thessaloniki, some second hand computers to allow him and his officers to use email etc. and some production machinery from Germany (perhaps even China), and then starts producing products, say "widgets" for the local market. His company is so good at it that they can even compete, on cost and later on quality grounds, with companies from Turkey and Western Europe, and 5 years later his company starts exporting.

Ok the above is a bit fanciful, but not by much I don't think. Surely though, it would make more sense to try this than to keep Greece inside an ecomomic/monetary prison? Because what many suspect the end result of that will be, really doesn't bear thinking about.

The Corinthian

SeanW wrote: »

Ok the above is a bit fanciful, but not by much I don't think. Surely though, it would make more sense to try this than to keep Greece inside an ecomomic/monetary prison? Because what many suspect the end result of that will be, really doesn't bear thinking about.

Fanciful would be one way to put it all right. It probably would have sounded marginally more convincing if you'd used Greek, rather than Italian, names.

Defaulting on her debts and leaving the Eurozone, would effectively cut Greece out of the credit markets. Meanwhile she's still spending more than she can afford and now has to also capitalize a Hellenic Reconstruction Bank to boot. The only option to do this is essentially to leave the printing presses on.

This will naturally lead to hyperinflation before long and your businessman will not be able to afford that production machinery from Germany or China - or anything else from abroad, for that matter - unless that price is passed on to the customer, removing the competitive edge that the original devaluation brought and ultimately driving up wages too.

Defaulting on debt does not come without consequences either. Look at what happened to Icelandic assets abroad when their banking system collapsed. Argentina, to this day, still suffers the consequences of her decision to default. This means that sanctions will effectively block Greek exports from most of the EU, forcing Greece to seek new markets that she'll become heavily dependant on (as the number of countries willing to trade will dwindle) - Russia is an almost certainty in this regard, and who seriously wants to be dependant on Russia?

I would also put the probability of Greece falling into dictatorship as very high in this scenario.

Ultimately, the debts will have to be paid, sooner or later. There appears to be some form of mistaken belief that you can default and the debt is forgotten. It's not, and until it's paid off, Greece will be shut out of the international markets.

There is really only one advantage to escaping the 'monetary prison', and that is that Greece would be able to repay their debt and get their house in order at their own pace. But the pain will not go away and it will likely be deeper and more painful due to the consequences of a default and exit from the Euro. Additionally, we presume they can get their house in order, something that even the Greeks are sceptical of and given a corrupt elite that is still dragging their heels on reform despite EU pressure.

Of course that elite could be swept away democratically (or otherwise) and be replaced by... a number of groups and demagogues who are all promising largely 'quick fix' solutions. So that's probably not a good road to take.

There's no quick fix for Greece, I'm afraid. Pain one way, pain the other and no magic get out of jail card. Greece's best bet is probably to genuinely deal with tax evasion and reform, remain under the relative protection of Eurozone membership and ideally negotiate some form of deal to reduce the pain overall.

SeanW

I though I was clear in my last post, but I do NOT think Greece should monetize government debt. I am acutely aware of how utterly useless their government is and how little value for money they get spending money on classrooms with two teachers, but most parents still hire grinds, a railway system where the average wage is €65,000 (in what's basically a 3rd world country), a healthcare system that is vastly overfunded, riddled with waste and fraud, supposed to be subsidised but if you get sick you have to bribe the doctor to actually take care of you.

Oh yeah, and while all this is going they're not collecting taxes properly, and large numbers of Greek people are going hungry and in some cases abandoning their children outside churches because they can't afford to keep them, all the while their government cannot or will not help them because they'd rather spend money on the above.

No way am I suggesting that a Greek Central Bank should finance this sort of insanity because clearly it would lead to a Zimbabwe style situation, which I agree is to be avoided at all costs.

My suggestion relates to firstly fixing some of this, howsoever it has to be done THEN AND ONLY THEN re-empowering the Greek Central Bank with a new Drachma.

AT THAT POINT, the GCB would capitalise the Hellenic Reconstruction Bank, depending on the sums involved that move would account for some, most or all of the devaluation to be done.

I would also put the probability of Greece falling into dictatorship as very high in this scenario.

It's very likely anyway. I've been watching this closely and Chrysi Avgi (Golden Dawn) is doing everything it can, inside and more importantly outside parliament to establish itself as an alternative governmental system, mostly through their work on the ground.

Going hungry because your government would rather subsidise waste than feed you? No problem! Just show your Greek national ID card to a Golden Dawn feeding centre and you get food and basic supplies. Just don't be surprised if the stuff looks like it came off a shelf in Montreal, Canada, because there's a good chance it did, given that GD now has a chapter in Montreal collecting charitable donations of such supplies. If you're in a high crime part of Athens, e.g. an older person afraid to even go to the ATM? No problem! A thug with a Golden Dawn black shirt on a quasi Police patrol will accompany you ...

So what we're seeing here is a repeat of what happened in Germany in the 1930s. I find it truly frightening firstly than an organisation like this is rising in power, but nearly as much (more sadden ing really) that they are the last hope of a lot desperate Greek people.

Defaulting on debt does not come without consequences either. Look at what happened to Icelandic assets abroad when their banking system collapsed.

Iceland had been growing year on year - thanks in large part to their devalued currency - since not long after their banks failed.

Argentina, to this day, still suffers the consequences of her decision to default.

[sarcasm]Wow, globalist vulture capitalists can get a 3rd world country (Ghana) to act like vigilantes. That's so surprising :rolleyes:[/sarcasm]I'm sure Argentina is really worried about the potential loss of an old wooden ship. I note from the article that the leader of Argentina has basically told their ships' ransom takers basically "Go to Hell" which IMO is entirely appropriate. Ghana might also regret this decision if Argentinians ever start investing abroad, it's a safe bet they'll be giving Ghana a wide berth if they think their property will be subject to arbitrary expropriation.

This means that sanctions will effectively block Greek exports from most of the EU, forcing Greece to seek new markets that she'll become heavily dependant on (as the number of countries willing to trade will dwindle) - Russia is an almost certainty in this regard, and who seriously wants to be dependant on Russia?

This is somewhat bizarre, if Greece defaults on her debts the E.U. will arbitrarily block exports from Greece? I'm sure Europe can really afford to block all those raw materials, and if as I suspect Greece might begin to industrialise, the rest of the E.U. would be blocking itself off from a new source of cheap goods.

In addition, as you point out, in this situation the Russians might be more than happy to lend money to and allow mass imports from Greece if it brought them into the Kremlins' "sphere of influence" ... like Syria is. Or Belarus.

Are you seriously suggesting that any sane European would ever allow this to happen? Then again, Europe is ruled by people like the Maoist Chairman Barroso and Herman Van Rumpouy in a Eurocracy where common sense is in short supply, so I guess you're right, anything is possible!

I am pie

I can assure you that Argentina is extremely concerned about the lost of the Libertad and the potential loss of another ship currently docked under repair in South Africa. I live in Buenos Aires and can tell you that it is headline news. The libertad is a very symbolic and culturally important ambassador for the country. The ship is cape town is a current day naval vessel.

The real concern is that Argentine assets in ever corner of the world will be pursued and worse still the ny court ruling makes it illegal for any other institution to accept payment of restructutured debts. Therefore the vultures put the brakes on the 'good' payments which no one here wants to see happen.

Arguably the Argentine default was the correct course of action but there are consequences and they should be understood.

SeanW

I am pie wrote: »

I can assure you that Argentina is extremely concerned about the lost of the Libertad and the potential loss of another ship currently docked under repair in South Africa. I live in Buenos Aires and can tell you that it is headline news. The libertad is a very symbolic and culturally important ambassador for the country. The ship is cape town is a current day naval vessel.

Thanks for the updates: I wasn't aware of the Libertads' value to the Argentine people.

The real concern is that Argentine assets in ever corner of the world will be pursued

Do you get the concern that it is the assets of the Argentine government, or worse those of Argentine private companies and individual citizens?

and worse still the ny court ruling makes it illegal for any other institution to accept payment of restructutured debts. Therefore the vultures put the brakes on the 'good' payments which no one here wants to see happen.

Just when I think international finance cannnot possibly become any slimier, they find a way to plumb to new depths of depravity!

Arguably the Argentine default was the correct course of action but there are consequences and they should be understood.

Agreed, but Greece is on the road to being totally destroyed and/or taken over by Golden Dawn or extreme leftists if they stay the current course.

The Corinthian

SeanW wrote: »

My suggestion relates to firstly fixing some of this, howsoever it has to be done THEN AND ONLY THEN re-empowering the Greek Central Bank with a new Drachma.

AT THAT POINT, the GCB would capitalise the Hellenic Reconstruction Bank, depending on the sums involved that move would account for some, most or all of the devaluation to be done.

And I pointed out how this would likely play out; what would the Greek Central Bank use to capitalize any Reconstruction Bank? It would be unable to borrow, and would lack the capital to do so. And that leaves what? Printing more money.

So what we're seeing here is a repeat of what happened in Germany in the 1930s. I find it truly frightening firstly than an organisation like this is rising in power, but nearly as much (more sadden ing really) that they are the last hope of a lot desperate Greek people.

Only because they appear to be better organized than the extremists on the other side of the political fence. Please bare in mind though, that despite originating in Greece, democracy has long been a fragile thing there, as the years 1967 - 74 demonstrated.

Iceland had been growing year on year - thanks in large part to their devalued currency - since not long after their banks failed.

Actually, it is in much larger part due to the fact that Iceland's economy was in far better shape to begin with. It's crisis was solely based upon the banking system, which while serious pales when compared with Greece.

Also I'm not really sure when you get the notion that currency devaluation was a major factor in its recovery. General consensus has been that hikes in taxation and political moves, such as her intention to join the EU have been far more effective in dealing with the crisis than any devaluation (which incidentally has resulted in an inflation rate of over 18%).

[sarcasm]Wow, globalist vulture capitalists can get a 3rd world country (Ghana) to act like vigilantes. That's so surprising :rolleyes:[/sarcasm]

If you want to get into tin-foil hat territory, please do so on the conspiracy board. Otherwise, this has been the reaction of most governments that saw money owed to them by Argentina - only as Argentina paid these governments back did it see it's assets unfrozen and a tentative return to the World markets.

This is somewhat bizarre, if Greece defaults on her debts the E.U. will arbitrarily block exports from Greece? I'm sure Europe can really afford to block all those raw materials, and if as I suspect Greece might begin to industrialise, the rest of the E.U. would be blocking itself off from a new source of cheap goods.

Can the EU afford to block raw materials from Greece economically? Absolutely.

Politically would be a much more complex matter given that Greece is in the EU (that's why the UK could freeze Icelandic assets, but not Irish ones). At the very least, any trade and economic cooperation with Greece would end though and it is not inconceivable that Greece may be pushed out of the EU altogether, opening up the arena to further sanctions.

Are you seriously suggesting that any sane European would ever allow this to happen? Then again, Europe is ruled by people like the Maoist Chairman Barroso and Herman Van Rumpouy in a Eurocracy where common sense is in short supply, so I guess you're right, anything is possible!

Tin-foil hat conspiracies about the Marxist nature of the EU aside, you seem to be under a rather naieve presumption that one can default on one's international debts and have this instantly forgiven. Feel free to give me a single example of this at any point in the last century.

SeanW

And I pointed out how this would likely play out; what would the Greek Central Bank use to capitalize any Reconstruction Bank? It would be unable to borrow, and would lack the capital to do so. And that leaves what? Printing more money.

Yes, this would allow the Greek Central Bank basically to kill two birds with one stone - the same move would both provide new finance to Greek entrepreneurs while also providing the means for the necessary devaluation of the new Drachma. I don't know how much would be involved, how much the capitalisation move would add to the money supply, that would depend on detailed figures and proposals.

Only because they appear to be better organized than the extremists on the other side of the political fence.

Yes, they are very well organised. And unfortunately they are the closest thing a lot of Greek people have to a functioning government.

Otherwise, this has been the reaction of most governments that saw money owed to them by Argentina - only as Argentina paid these governments back did it see it's assets unfrozen and a tentative return to the World markets.

That explains it ... Argentina must really be in hock to the Ghanains then ... they must be furious about all that money they lent Argentina ...

Tin-foil hat conspiracies about the Marxist nature of the EU aside

That's the second time in a single post you've told me "off to Conspiracy Theories with you" and I might suggest at this point that if this is the best you can do, you might want to consider improvements to your debating style.

There's no conspiracy theory, this man spent his youth leading a Maoist youth group in Portugal - look it up. Some of his clearly Red flavoured speeches were even recorded for posterity :P

you seem to be under a rather naieve presumption that one can default on one's international debts and have this instantly forgiven. Feel free to give me a single example of this at any point in the last century.

There was a certain debt imposed on the people of Germany after World War I, the bill for every single penny of loss incurred by all the allied powers. Denominated in gold (currencies), it amounted to more 50% of all the gold ever mined in human history to that point. John Maynard Keynes, an economist I don't usually consider a source for sound economic policy, suggested that this might not be such a good idea. But unfortunately he was ignored.

Problem is the rest of the world waited until Adolf Hitler rose to power (arguably directly as a result of that) and he stopped paying the reparations. Only then a policy of appeasement was about to get underway, I don't think it was that much of an issue. The situation is slightly different in Greece today but there are very many paralells. We have a people who are humiliated and many of them whose quality of life has been destroyed, a hopelessly inadequate government, and we also have a rising, well organised facist movement who fires up a lot of Greek people promising the dawn of a new age of Hellenism.

You might note that this particular sequence of events did not end very well for anyone in the late '30s and early '40s. The "take away message" for mankind from that should have been that if you humiliate and impoverish a people over debts they can never hope to pay, it doesn't end well. That's why civilised systems have bankruptcy procedures for one thing, or at least, a recognition that somethings things just don't go the way they were expected to.

The way things are going, I think it's a matter of when (not a matter of if) Greece defaults, no matter what happens because the mathematics of rising debt service costs and an economy in a severe death spiral means that servicing the debt will within a year or two become impossible.

If I understand them correctly, your posts suggest that if that happens (and you appear to believe it to be a matter of if, not when) Greece will be totally isolated by the rest of the world in pure feral vengance, while global vulture capitalists will spend generations trying to suck the last few drops of blood from Greece's dying corpse.

Meh, maybe it's just me. Maybe I'm just a dreaming optimist, but I would like to think that we as a global civilisation would have learned something from our history in these kinds of cases.

I am pie

SeanW wrote: »

Thanks for the updates: I wasn't aware of the Libertads' value to the Argentine people.

Do you get the concern that it is the assets of the Argentine government, or worse those of Argentine private companies and .

The libertad represents Argentina around the world and is a PR device as much as a training ship, the asset issue is more severe for the government who require massive funding for petroleum projects (YPF) and other public sector enterprises.

Notably only 8% of investors fall into the vulture category, everyone else accepted the write downs. Arugably Argentina could pay but wont in order to save face. Personally I think more regulation should be put in place to prevent vulture funds buying cheap debts and using the courts to pursue it years down the line. The opposition here in Argentina haven't to my knowledge said they would act much differently in terms o repayments.

brimal

Golden Dawn spokesman Ilias Kasidiaris (the guy who physically attacked a female politician live on TV earlier this year) has read out an excerpt of the anti-Semitic book The Protocols of the Elders of Zion while addressing parliament two weeks ago.

A lawmaker for Greece's neo-Nazi Golden Dawn Party has reportedly read out in parliament a passage from the anti-Semitic forgery The Protocols of the Elders of Zion.

Kasidiaris was addressing parliament on October 23 at a discussion on lifting his immunity in connection with suspicions of assault. “There was absolutely no reaction” to this in parliament, Dimitras said, which, makes “all parties held as accomplices.”

http://www.haaretz.com/jewish-world/jewish-world-news/protocols-of-the-elders-of-zion-read-aloud-in-greek-parliament-1.472552

The Corinthian

SeanW wrote: »

Yes, this would allow the Greek Central Bank basically to kill two birds with one stone - the same move would both provide new finance to Greek entrepreneurs while also providing the means for the necessary devaluation of the new Drachma. I don't know how much would be involved, how much the capitalisation move would add to the money supply, that would depend on detailed figures and proposals.

I suggest you read up the history of the Weimar Republic - specifically the effects of hyperinflation on capital.

That explains it ... Argentina must really be in hock to the Ghanains then ... they must be furious about all that money they lent Argentina ...

Ghana is both a creditor, but is also following international law. Try giving a line of credit to a Saudi firm, and when they don't pay up and you have to let go of staff because of the write down, because the Saudis don't play by the international rules, then let me know if it's a good idea or not.

That's the second time in a single post you've told me "off to Conspiracy Theories with you" and I might suggest at this point that if this is the best you can do, you might want to consider improvements to your debating style.

Or you might tone down the wild conspiracy theories.

There's no conspiracy theory, this man spent his youth leading a Maoist youth group in Portugal - look it up. Some of his clearly Red flavoured speeches were even recorded for posterity :P

So what? Other than the fact that he would have been a youth around a time when everyone under the age of thirty was supporting one radical movement or another (conservatism didn't come back in vogue until the eighties), the reality is that everyone is essentially an idiot until 25 years of age - do you know how many Tory politicians were members of the Labour party in their youth, for example? Or Fianna Fail politicians who were IRA supporters or sympathizers? Or Labour party TD's who at some stage were members of the SWP in college? These things are par for the course and typically put down to youth once you drop therefore you become middle aged.

As the expression goes; if you're not a socialist at twenty, you have no heart. If you're still a socialist at forty, you have no brain.

There was a certain debt imposed on the people of Germany after World War I, the bill for every single penny of loss incurred by all the allied powers. Denominated in gold (currencies), it amounted to more 50% of all the gold ever mined in human history to that point. John Maynard Keynes, an economist I don't usually consider a source for sound economic policy, suggested that this might not be such a good idea. But unfortunately he was ignored.

Yes, and so they left the printing presses on, and the rest is history.

The present austerity measures imposed on Greece are specifically designed to deal with the budget deficit, not to further encourage them to spend more money they don't have, which is essentially what you are proposing.

You might note that this particular sequence of events did not end very well for anyone in the late '30s and early '40s.

Yet what you propose will actually see an even faster destabilization of Greek democracy, so it's hardly a solution, is it?

If I understand them correctly, your posts suggest that if that happens (and you appear to believe it to be a matter of if, not when) Greece will be totally isolated by the rest of the world in pure feral vengance, while global vulture capitalists will spend generations trying to suck the last few drops of blood from Greece's dying corpse.

Vengeance? You do know that Ireland is owed money by Greece too. As it Italy and Spain - indeed, there are few, if any, European economies that can presently afford any kind of write down like that. If Greece defaults, that means those shortfalls are going to be paid by you and me, not simply some vulture capitalists, unless the bailout fund is a privately institution all of a sudden.

But let's say we forgave Greece's debt. What other debts should we forgive? If so, why does it make sense to give them loans any more?

Meh, maybe it's just me. Maybe I'm just a dreaming optimist, but I would like to think that we as a global civilisation would have learned something from our history in these kinds of cases.

We have learned something from our history and that is better off not being idealistic.

After all, what two ideologies were ultimately born of the Romantic period; communism and nationalism.

Eggy Baby!

This means that sanctions will effectively block Greek exports from most of the EU, forcing Greece to seek new markets that she'll become heavily dependant on (as the number of countries willing to trade will dwindle) - Russia is an almost certainty in this regard, and who seriously wants to be dependant on Russia?

Does it really matter who they will be dependent on? Dependence in any instance is a bad thing. Even then, Russia is a big and growing market, and a massive exporter of gas, oil and minerals (in fact, the largest in most respects). Plus, its a massive agricultural nation. So I think your belief that it is somehow undesirable economically (or politically, even) is misplaced.

SeanW

The Corinthian wrote: »

Try giving a line of credit to a Saudi firm, and when they don't pay up and you have to let go of staff because of the write down, because the Saudis don't play by the international rules, then let me know if it's a good idea or not.

I'm guessing that Saudi Arabia allows companies to simply repudiate debts to foreigners regardless of their ability to pay. Not that this surprises me, given their political ideology.

Greece is not like that. It's economy is in a state of collapse and its government is drowning in red ink. In short, it's financially insolvent.

So what? Other than the fact that he would have been a youth around a time when everyone under the age of thirty was supporting one radical movement or another (conservatism didn't come back in vogue until the eighties), the reality is that everyone is essentially an idiot until 25 years of age - do you know how many Tory politicians were members of the Labour party in their youth, for example? Or Fianna Fail politicians who were IRA supporters or sympathizers? Or Labour party TD's who at some stage were members of the SWP in college? These things are par for the course and typically put down to youth once you drop therefore you become middle aged.

I could believe that if he radically changed course, i.e. became a libertarian or a euroskeptic. But guess what - he goes from (Portugese Maoists, in his youth) one group of communists with a questionable view of democracy, to another group (the European Union) that is also full of communists, ignores and bulldozes democratic referenda out of the way of their European dream, and seems hell bent on the destruction of nation-state democracy.

Go to this video

https://www.youtube.com/watch?v=RcAq5zr8yx0

Somewhat after 4:15 you can see that he has not changed at all, the crisis all started in America and seems, in his view, to have f all to do with Europe ...

[sarcasm]Yeah he's really grown up hasn't he?[/sarcasm]

Yes, and so they left the printing presses on, and the rest is history.

A response exclusively to their reparations bill. Which it was obvious to all and sundry they could never pay.

The present austerity measures imposed on Greece are specifically designed to deal with the budget deficit, not to further encourage them to spend more money they don't have, which is essentially what you are proposing.

No. I am suggesting that the Greek government should get its proverbial sh*t together and balance their budget BEFORE reintroducing its currency. I am not suggesting that Greece should monetize its government expenditure. This way the money created in devaluation can be lent to Greek SMEs and entrepreneurs.

I recognise that it may be fanciful to suggest that Greece can balance their budget in a short time, I only suggested it as one means by which they might escape the downward death spiral their economy is suffering.

Yet what you propose will actually see an even faster destabilization of Greek democracy, so it's hardly a solution, is it?

So you recognise that the current plan isn't working?

Vengeance? You do know that Ireland is owed money by Greece too. As it Italy and Spain - indeed, there are few, if any, European economies that can presently afford any kind of write down like that. If Greece defaults, that means those shortfalls are going to be paid by you and me, not simply some vulture capitalists, unless the bailout fund is a privately institution all of a sudden.

Tough. They're going to default. It is IMO a certainty.

The only question is whether they default with some kind of internationally agreed plan, with a democratic government in Greece, or we wait until Nikolaos Michaloliakos takes over and he repudiates the debt in a situation of chaos, like the Nazis did in Germany in 1933.

But let's say we forgave Greece's debt. What other debts should we forgive? If so, why does it make sense to give them loans any more?

That's the point genius! It doesn't make sense to loan the Greek government any money because they will waste it. It never did, and given the Mediterranean culture, it probably never will. The speculators that lent Greece money they shouldn't have should not now be rewarded for that.

We have learned something from our history and that is better off not being idealistic.

After all, what two ideologies were ultimately born of the Romantic period; communism and nationalism.

Yes, because nationalism (i.e. being proud of your country) is such a bad thing :rolleyes: I'm guessing you're a fan of multiculturalism.

Eggy Baby!

Yes, because nationalism (i.e. being proud of your country) is such a bad thing

Nationalism is horrid. It's like constipation of progress.

The Corinthian

SeanW wrote: »

I'm guessing that Saudi Arabia allows companies to simply repudiate debts to foreigners regardless of their ability to pay. Not that this surprises me, given their political ideology.

Greece is not like that. It's economy is in a state of collapse and its government is drowning in red ink. In short, it's financially insolvent.

Except what you're suggesting is that Greece should be like that. Why - whether for reasons of bankruptcy or simple avarice, makes little difference to creditors or their confidence in any trade with such a nation - that's why firms in countries like Saudi Arabia tend to have to pay significantly over the odds before anyone will do any business with them.

I could believe that if he radically changed course, i.e. became a libertarian or a euroskeptic. But guess what - he goes from (Portugese Maoists, in his youth) one group of communists with a questionable view of democracy, to another group (the European Union) that is also full of communists, ignores and bulldozes democratic referenda out of the way of their European dream, and seems hell bent on the destruction of nation-state democracy.

I suggest you look at what 'communist' parties really are in continental Europe nowadays (and for the last twenty years). Not really very communist in reality.

Somewhat after 4:15 you can see that he has not changed at all, the crisis all started in America and seems, in his view, to have f all to do with Europe ...

You are aware that the crisis did actually start in America..? Sub-prime mortgages..? Lehman Brothers..? Ring a bell?

A response exclusively to their reparations bill. Which it was obvious to all and sundry they could never pay.

It was a response to spending more than they can afford, thus printing more money to make up the shortfall on an ongoing basis.

At the end of the day, that is the problem, not the reason why they are spending more than they can afford, only that they are and are not going to stop in that scenario. Basic macroeconomics, I'm afraid.

I recognise that it may be fanciful to suggest that Greece can balance their budget in a short time, I only suggested it as one means by which they might escape the downward death spiral their economy is suffering.

Presuming the Greek government, any Greek government, can do this (something even the Greeks are sceptical of), how long do you think it would take? The Greeks are not actually paying off any debt at present, they're still spending more that they earn despite cutbacks left, right and centre.

So default or not, Greece is screwed unless it can get this in order first - whenever that happens.

So you recognise that the current plan isn't working?

I never suggested it was - indeed, I muted that some serious changes to 'the plan' would have to be done and you'll find that most serious economists have concluded this.

However, conceding that the present approach is not working does not imply that a radically different one - defaulting by choice - will.

Tough. They're going to default. It is IMO a certainty.

High probability, but not yet a certainty. Whatever happens though it should be done with Greece inside the European tent pissing out and not outside of the tent pissing in...

Yes, because nationalism (i.e. being proud of your country) is such a bad thing :rolleyes: I'm guessing you're a fan of multiculturalism.

What on Earth do you mean by that nonsense?

SeanW

The Corinthian wrote: »

Except what you're suggesting is that Greece should be like that.

Economy in a deflationary death spiral, >50% youth unempoloyment, 25% of Greek businesses gone bust in the last 4 years, and an ever rising debt service bill.

How, save trying to squeeze blood out of a turnip, do you think the Greek government can pay the debt? It just doesn't make any sense!

Greece needs to do the equivalent of Chapter 11 bankruptcy or Examinership. If it were a company or an individual, the case for bankruptcy protection would be incontestible. It's not the same thing.

You are aware that the crisis did actually start in America..? Sub-prime mortgages..? Lehman Brothers..? Ring a bell?

Yes, but Chairman Barroso blames all of Europes problems on it, seeming to suggest that Europe - and especially the European Union - had no hand in Europe esp. Greeces current difficulties.

It was a response to spending more than they can afford, thus printing more money to make up the shortfall on an ongoing basis.

At the end of the day, that is the problem, not the reason why they are spending more than they can afford.

But it wasn't JUST that was it? They were "spending more than they could afford" on external war reparation/debt.

Presuming the Greek government, any Greek government, can do this (something even the Greeks are sceptical of), how long do you think it would take? The Greeks are not actually paying off any debt at present, they're still spending more that they earn despite cutbacks left, right and centre.

I recognise all that.

So default or not, Greece is screwed unless it can get this in order first - whenever that happens.

Agreed.

I never suggested it was - indeed, I muted that some serious changes to 'the plan' would have to be done and you'll find that most serious economists have concluded this.

Explain.

However, conceding that the present approach is not working does not imply that a radically different one - defaulting by choice - will.

Perhaps, but the question is do you just stay where you are and hope things work when there's no way it will, or do *something* even though theres a chance that will just cause new problems?

Consider: you've strayed onto a railway line near a level crossing and can see a train coming. You have two choices:

1. Stay on the track and hope the train stops.
2. Run back to the road, even though everyone in town drives crazy, drivers break these crossing lights as a matter of routine, and so there's a chance you'll get flattened by a speeding car.

Pretty sure you're not just going to stand around.

High probability, but not yet a certainty. Whatever happens though it should be done with Greece inside the European tent pissing out and not outside of the tent pissing in...

The Eurocrats have made it clear that a Greek default means they'll be kicked out of the Eurozone. And since I think its inevitable they'll default because of their precarious situation, the only thing non-Greeks can control is the international response to that eventuality.

What on Earth do you mean by that nonsense?

I think I went off on a tangent there but when you say "nationalism" like its bad thing, I wonder what you mean? You need to explain that a little better. If you mean that being proud of your nationality is a bad thing, then I'm sorry, but I just flat out disagree.

Eggy Baby!

I think I went off on a tangent there but when you say "nationalism" like its bad thing, I wonder what you mean? You need to explain that a little better. If you mean that being proud of your nationality is a bad thing, then I'm sorry, but I just flat out disagree.

Patriotism is being proud of your country. Nationalism is hard to define, because it comes in many shapes and sizes, but usually it is an ideology which strives to differentiate cultural or ethnical social groups by national boundaries. Bit hard to describe.

Annasopra

nursextreme wrote: »

Okay! Will try and keep an opened mind on the Golden Dawn Party! What do you think they stand for apart from "Patriotism" which is a very loose term which could do with defining in terms of this particular context.
If there was an Irish version of the party - What would the offer the voters by way of manifesto, policies etc.

Racism, xenophobia, mysogyny, homophobia, anti semitism, islamophobia, vigilantism, intimidation

Duggys Housemate

Rojomcdojo wrote: »

Germany during the Great Depression and Greece during the Great Recession are almost completely incomparable - firstly because a few million of them haven't just sacrificed themselves in vain, secondly, because of the stabilization factor of the common currency.

They aren't paying 7 billion Greco-Dollars for a loaf of bread, for example.

But people always get that wrong - including to be fair to you the Bundesbank and its successor - it wasn't the hyperinflation that lead to the Nazi's rise to power, because that happened in the early 20's and was unrelated to the rest of the world or the depression, which isn't surprising as the depression hadn't yet happened.


What led to their rise to power was the Depression and Bruning's austerity budget. The Nazis are a result of book balancing. Of austerity.

( not just that, of course, but that's the economic reason).