Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest
Time to copy 1953 German Debt Write-Off?
Comments
-
DeJa VooDoo wrote: »Zero?
https://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CE4QFjAH&url=http%3A%2F%2Fwww.independent.ie%2Fbusiness%2Fdamien-kiberd-on-greece-germans-are-world-class-debt-defaulters-and-soccer-players-30937381.html&ei=FafGVN-_F8n4UPKdhJAC&usg=AFQjCNH77QWRs4xBEhLAIlD_aEAEnvIwWg&sig2=ZHhkwH9dlC1iCz6f5EjyOQ
The reward for two world wars more like...
Or perhaps enlightened self interest on behalf of the by the rest of the world by a recognising that the second war would probably not have happened without the Treaty of Versailles which created the huge burden of debt on the Weimar Republic that eventually saw it collapse into the Third Reich.0 -
In Europe at the moment the impacts of years of austerity, stagnant economic growth / deflation, unemployment, are now being felt politically through the growing rise of extreme parties of the left and right. There has been insufficient stimulus through government / EU spending on wealth creating major capital projects to get economies moving again and economic opinion is divided as to whether the recent phase of Euro QE will really help the greater mass of people or merely concentrate yet more wealth into the hands of the super rich.
When the ordinary EU citizen reflects, even for a moment, on the current and developing political economic situation in the EU and Eurozone, he/she might think: “what exactly is going wrong – there must be a better way – and how do we stack up against a more successful / sustainable unions of states?
The most obvious example of who to compare with is the United States. The US didn’t arrive at monetary and fiscal union overnight – it took a couple of hundred years, many economic calamities and a civil war to get to where they are now. Europe is only a very short time into the Euro project – monetary union in name but only a common currency area in reality and also has many other inter-state differences, as with languages, culture, aging population, labour mobility, etc.
These issues and many more are considered in this article “9 Ways the Eurozone is More Fragile than the US”, from which the following are examples:7) The Eurozone isn't a Fiscal Union
One of the key challenges to the Eurozone is a lack of fiscal union. A fiscal union is something Americans take for granted and rarely think about. In the US, when there is a shock to the output of one of our fifty states, fiscal transfers from the rest of the union help to cushion the blow. As an example, let's say there is a negative shock to the economy of Texas, perhaps due to a fall in oil prices. Economic output in Texas would fall. But for every dollar in lost output, the fall in income in Texas isn't a dollar but only about 60-65 cents.
Because when there are bad times in Texas the federal government transfers economic assistance there — on the premise that when there are bad times somewhere else, booming oil prices in Texas might help out another state in the union. It's a kind of risk pooling and insurance. In the scenario we've been discussing, Texans who were laid off from their jobs would be eligible for unemployment benefits. Those same unemployed Texans might also be eligible for federal welfare benefits. Also, when the earnings of Texans decrease due to bad economic times they would automatically pay less federal income tax. Conversely, when Texans are doing well, their federal taxes automatically rise. This serves as a kind of automatic stabilizer for the economy. Finally, the federal government can decide to cushion an economic shock to Texas by spending more money on Texan infrastructure or by funding federal projects at, say, the Johnson Space Center in Houston.
In the U.S. those shock absorbers at the federal level are considerable, since the federal government accounts for 25% to 30% of our GDP. In Europe, where the EU government only accounts for 1% of GDP, there simply isn't capacity for it to lend substantive assistance when countries are in trouble. So what winds up happening in the Eurozone is that when you have a $1 shock to the GDP of one country, that country's income goes down, effectively, by $1.
.......
8) Banking Union: The Eurozone's Stumbling Block
In the United States, we take for granted that every state in the union has banks that are insured by the FDIC. In Europe, however, German deposit insurance pays only for German banks, and Italian deposit insurance pays only for Italian banks.
In the U.S., on the other hand, when a bank goes bankrupt in California, we use the same pool of money to fix the problem as we would for a bank that goes bust in New York. Furthermore, in the United States, we have a banking system where the Federal Reserve, at the central level, not at the state level, decides which banks are in trouble and need assistance, or in the worst case, require resolution.
A banking union, in fact, is an important kind of risk sharing — a kind of subset of a fiscal union.
What concerns the Germans about a fiscal union — or, for that matter, a banking union — is that it pledges German citizens to support peripheral Eurozone economies and banks that are at risk of outright collapse. The fear in Germany is that risk-sharing will become risk-shifting — and that a fiscal union will become a transfer union.
In short, Germany, and other core Eurozone nations like The Netherlands, don't want to get stuck in a transfer union where they might be forced to subsidize Portugal and Italy and Greece and Spain forever. Fiscal unions and banking unions only work when shocks occur randomly.
9) Political Union — And Democratic Legitimacy in the Eurozone
In the case of the Eurozone, decisions that were once made at the national level get made at the supranational level. What was once decided by national legislatures of countries gets decided at the European Parliament in Strasbourg, France, while the executive powers of the EU are in Brussels within the European Commission. Decisions that were formerly handed down by national supreme courts get judged at The European Court of Justice in Luxembourg. And monetary policy that was executed by national central banks gets made by the ECB in Frankfurt, Germany.
What impact does this have on the political legitimacy of democracies?
If you are transferring national sovereignty from the nation state toward super-national authority, then you need a political union where those decisions being made at the super-national level are done in a democratic way. Otherwise, there are great challenges: For example the EU tells you that your country's budget is not acceptable and needs to be cut, or the ECB informs you that several of your national banks need to be shut down.
Decisions on budgets and bank supervision have already moved away from national capitals to the central authority — but the risk sharing component of fiscal and economic union never arrived. You might say that countries like Greece have lost their sovereignty on supervision and regulation without truly receiving the benefits of solidarity, i.e. risk-sharing.
Bureaucrats that were never elected by Greek citizens have begun making decisions that most Greeks would prefer to be made democratically in Athens, and many have already begun to blame their woes on the EU and the ECB and the Eurozone.
The issue, of course, brings us back to where we began our list: The rise of extremist political parties within the Eurozone.
Of course, identifying problems and issues is one thing – how best to resolve them is quite another. And therein lies the challenge for our politicians, or indeed ourselves, who elect them and expect them to move a bit more quickly towards resolving them!0 -
DeJa VooDoo wrote: »With the day that's in it, it's timely and good to remember Germany's dodgy past.
Merkel thinks she has what the democratically elected leader of that time couldn't get.
What utter nonsense.0 -
FreudianSlippers wrote: »Germany didn't really have its debt "written-off" though did it? Considering it made repayments well into the late 80s, I'd say that's hardly a write-off
According to Wikipedia, by the time of the London Debt Conference:Germany had 16 billion marks of debts from the 1920s which had defaulted in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the U.S., France and Britain. Another 16 billion marks represented post war loans by the U.S. Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.0 -
-
DeJa VooDoo wrote: »Least we forget!
Auschwitz-Birkenau.
:mad:
And yet now in Greece the Greeks are trying to whip up those old hatreds and enmities that lead to those ghastly atrocities. And they are doing it for no other reason but to avoid paying what they owe. How shameful.
The whole European Union project was embarked on and has been a phenomenal success in abandoning the old racist enmities and hate that caused two world wars.
Along the way Greece was brought on board despite not deserving it or earning it. It then squandered the wealth poured into it by Europe, and in the last couple of years it sucked up 200+billion !
The rest of Europe will not thank or respect Greece for now trying to exploit it's victim history to try to dig up these old hatred and prejudice for no other reason that to avoid paying it's debts. It is a shameful and pathetic path that Greece is embarking on if it thinks this is the way forward.
Pay your debts Greece !0 -
DeJa VooDoo wrote: »Least we forget!
Auschwitz-Birkenau.
:mad:
I don't think anyone is advocating that we forget about the past and not learn some lessons from it.
That said, the focus and objectives of the Marshall Plan in 1948 and the London Debt Agreement of 1953 were the future and re-building Europe along open democratic lines. It was not to seek retribution for the past!
These positive actions did help to achieve those aims and objectives.
It's now time to take stock and figure out how best to move from where we are (massive public debt, recession, deflation, unemployment, etc.) to a situation where people can afford to raise their families, house themselves and have a reasonable lifestyle in return for hard work and business endeavour. History shows that a well functioning middle class is essential for economic growth.
Not an easy one to solve. Germany, being the strongest economically has to play a key role, but Angela Merkel's approach of letting things happen and responding to crises in a minimalist way isn't providing the answers.
Where is the leadership and vision, as demonstrated by the Marshall Plan and the London Debt Conference, going to come from to move Europe out of its current economic malaise?0 -
DeJa VooDoo wrote: »Least we forget!
Auschwitz-Birkenau.
:mad:
It is an insult to the memory of those who died there to use them as a political football to try and score cheap points on this board.0 -
0
-
Advertisement
-
Depositors are pulling out billions from Greek Banks since the election results and Greek banks have lost 1/4 of their value in two days - see Telegraph article.0
-
DeJa VooDoo wrote: »In your opinion.
Your hero merkel is driving the austerity agenda, what is it with Germans trying to have ultimate control?
The final solution is it?
Disgusting.0 -
-
Your posts are disgusting. And disgraceful.DeJa VooDoo wrote: »I know.
Hopefully the Greeks throw a spanner in the works of her little plan.0 -
DeJa VooDoo wrote: »In your opinion.
And. I'd say, in the opinion of most people who - unlike you - don't regard victims of a horrific tragedy as pawns to be used in attempts at point scoring.DeJa VooDoo wrote: »Your hero merkel is driving the austerity agenda, what is it with Germans trying to have ultimate control?
The final solution is it?
Merkel isn't my heroine and the rest of the EU - be they German or otherwise - would far prefer if the Greeks (and us) had ran their economy properly so they didn't need austerity at all.
Austerity is what you get when you screw up your economy and are left with a mess to fix.0 -
And. I'd say, in the opinion of most people who - unlike you - don't regard victims of a horrific tragedy as pawns to be used in attempts at point scoring.
Merkel isn't my heroine and the rest of the EU - be they German or otherwise - would far prefer if the Greeks (and us) had ran their economy properly so they didn't need austerity at all.
Austerity is what you get when you screw up your economy and are left with a mess to fix.
I would have preferred if the ECB did their job properly and stopped German, and other countries banks fuelling the obvious Irish property bubble in the first place.
And then turn capitalism on it's head and insist we pay back reckless lending they were responsible for allowing to happen.0 -
Advertisement
-
DeJa VooDoo wrote: »I would have preferred if the ECB did their job properly and stopped German, and other countries banks fuelling the obvious Irish property bubble in the first place.
And then turn capitalism on it's head and insist we pay back reckless lending they were responsible for allowing to happen.
It wasn't the ECB's job to prevent our property bubble - it was ours.
We, not the ECB, choose to have tax-breaks to encourage investment by us in our property market when prices were being frantically bid upwards by us.
We failed to regulate our banks properly.
We allowed those banks to have accounts which gave a total false picture of the stability of their finances and, hence, enabled them to borrow massively as they appeared to be "sound" when they were risky.
It was that risky borrowing that blew up in our faces.
And honouring your commitments is capitalism lest you don't know. The capital markets won't loan you money if you tell them that your default position is that you won't pay them back THEIR money when you borrow it.0 -
It wasn't the ECB's job to prevent our property bubble - it was ours.
We, not the ECB, choose to have tax-breaks to encourage investment by us in our property market when prices were being frantically bid upwards by us.
We failed to regulate our banks properly.
We allowed those banks to have accounts which gave a total false picture of the stability of their finances and, hence, enabled them to borrow massively as they appeared to be "sound" when they were risky.
It was that risky borrowing that blew up in our faces.
And honouring your commitments is capitalism lest you don't know. The capital markets won't loan you money if you tell them that your default position is that you won't pay them back THEIR money when you borrow it.
If you're happy enough that the ECB failed to regulate the German, British, French etc etc banks while they fuelled the Irish bubble, that's your prerogative.
There's no doubt that da bert's regulator here did nothing either and allowed it go on, but to say the Irish are solely responsible is complete bullsh1te.0 -
DeJa VooDoo wrote: »If you're happy enough that the ECB failed to regulate the German, British, French etc etc banks while they fuelled the Irish bubble, that's your prerogative.
It has nothing to do with whether you, I or anyone else is happy with it, the ECB had no authority or responsibilty to regulate those banks whatsoever, hence they did not "fail" to regulate them - instead they could not regulate them even if they were gung ho to do so.DeJa VooDoo wrote: »There's no doubt that da bert's regulator here did nothing either and allowed it go on, but to say the Irish are solely responsible is complete bullsh1te.
There is a large difference between being largely responsible and solely responsible.
Had we made even some effort to rein in the property bubble we might have avoided most - but probably not all - of our fiscal crisis. Instead we showed as much restraint as a pyromaniac in a fireworks factory and suffered the consequences.0 -
DeJa VooDoo wrote: »Least we forget!
Auschwitz-Birkenau.
:mad:DeJa VooDoo wrote: »In your opinion.
Your hero merkel is driving the austerity agenda, what is it with Germans trying to have ultimate control?
The final solution is it?With the day that's in it, it's timely and good to remember Germany's dodgy past.
Merkel thinks she has what the democratically elected leader of that time couldn't get.
Posts like that are for the Conspiracy Theory board, not politics. Tbh, I don't even know if it would be allowed there. Cut it out.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
0 -
According to this Fortune article, Athens Stock Market down 11%, Greek Bank Stocks down 32% – 40%, Interest on 3 year Greek bonds rockets to 16.9% - all following Greek election results and aggressive approach adopted by PM Tsipras. Moreover, aTsipras’ spokesman also raised the prospect of blocking further European Union sanctions on Russia over its role in the Ukraine conflict
The article goes on to say:“Funding lunacies such as re-regulating the Greek labour market, creating a bad precedent and rewarding a populist who reneges on his country’s obligations and makes it less, rather than more, competitive is not part of the plan,” Berenberg’s Schmieding said in a note to clients.
But the outlook isn’t hopeless. There is more to the bailout than budget cuts, and there is more to Syriza’s policy platform than unabashed Socialist redistribution. The creditors won’t quibble with anything Syriza does to abolish tax evasion by its super-rich, one of the top three priorities named by Yannis Varoufakis, the new finance minister. And the creditors still have room to cut the cost of the bailout loans, and to stretch out the repayment schedule still further, offering a face-saving compromise.
It’s early days yet, but it will be interesting to observe from a distance just how this real life anti-austerity experiment, voted in by the Greeks, actually works out in practice! Undoubtedly, there will be learning points for us here in Ireland but I wouldn’t like to be living in Greece right now, with my livelihood, savings, family welfare, etc., on the line for the sake of such a risky experiment!0 -
Advertisement
-
Your on the money there...fuelled by pro-cyclical budgets.It wasn't the ECB's job to prevent our property bubble - it was ours.
We, not the ECB, choose to have tax-breaks to encourage investment by us in our property market when prices were being frantically bid upwards by us.
We failed to regulate our banks properly.
We allowed those banks to have accounts which gave a total false picture of the stability of their finances and, hence, enabled them to borrow massively as they appeared to be "sound" when they were risky.
It was that risky borrowing that blew up in our faces.
And honouring your commitments is capitalism lest you don't know. The capital markets won't loan you money if you tell them that your default position is that you won't pay them back THEIR money when you borrow it.0 -
Every Government has a Sir Humphrey Appleby. Lets hope Greece's earns his salary.golfwallah wrote: »According to this Fortune article, Athens Stock Market down 11%, Greek Bank Stocks down 32% – 40%, Interest on 3 year Greek bonds rockets to 16.9% - all following Greek election results and aggressive approach adopted by PM Tsipras. Moreover, a
The article goes on to say:
It’s early days yet, but it will be interesting to observe from a distance just how this real life anti-austerity experiment, voted in by the Greeks, actually works out in practice! Undoubtedly, there will be learning points for us here in Ireland but I wouldn’t like to be living in Greece right now, with my livelihood, savings, family welfare, etc., on the line for the sake of such a risky experiment!0 -
It seems to me that a serious re-think is needed at EU level on the approach to Greek debt. The simplistic austerity “one trick pony” approach, so favoured by Germany, has failed. To quote Einstein’s definition: "Insanity: doing the same thing over and over again and expecting different results".
Some notable commentators have been coming out in favour of Greece’s newly elected anti-austerity government. It has become clear to the majority of Greeks that austerity has not delivered the economic recovery predicted by the Troika – things have gotten a lot worse for Greece. Economist, Paul Krugman, points out that the Troika austerity program imposed on Greece was flawed from the start, based on false assumptions and could never have worked.
Attached articles in Irish Times:And here’s the thing: if the troika had been truly realistic, it would have acknowledged it was demanding the impossible. Two years after the programme began, the IMF looked for historical examples where Greek-type programmes, attempts to pay down debt through austerity without major debt relief or inflation, had been successful. It didn’t find any.
There’s more of Krugman’s thoughts in this blog in The Times.
Recent Washington Post article:Indeed, the policies that Angela Merkel’s government have inflicted on the nations of Southern Europe could not be more different from those that European leaders and the United States devised in the early 1950s to enable West Germany to rebuild its damaged economy. Since the crash of 2008, Germany, as Europe’s dominant economy and leading creditor, has compelled Mediterranean Europe, and Greece in particular, to sack their own economies to repay their debts.
Bank of England chief, Mark Carney, is also calling for some serious re-thinking according to the Irish Times:Germany should accept that making payments to poorer euro zone countries is in its own interests, the governor of the Bank of England has said.
Arguing for limited financial transfers and other measures to strengthen the currency union, Mark Carney says such steps in the medium-term would help Germany itself.
As politics and economics are driven much, if not more, by events than by orthodox thinking, the time for a different, more strategic, approach to the Greek situation is fast approaching!0 -
golfwallah wrote: »As politics and economics are driven much, if not more, by events than by orthodox thinking, the time for a different, more strategic, approach to the Greek situation is fast approaching!
I don't see it. Just because the new Greek Gov think things have changed doesn't make it so. The Media is making hay out of the crisis, as they always do and those who base their views on the manifest self interest and views of the media only end up doing their bidding.
Austerity works, and has worked very well where it has been effectively implemented. Reducing spending and increasing efficiency works.
But the short attention span and the strategic marketing cycle of the media has basically whipped up the more gullible public to think that massive international economic crises can be fixed in a few years, so when it hasn't all been fixed and wrapped up in a nice pink bow .... everyone should throw their hands up in the air and abandon common sense.
Well I don't buy it. The economic state of most of the EU has improved immeasurably. Recession hasn't ended yet because it takes time. People who think that continuing to spend more than you can afford is something that will help the EU are just daft.
Just because the Greeks essentially refused to reform their country and economy and flushed another 200+billion of our money down the drain doesn't mean cutting back spending is wrong. The EU is right about Greece, it needs to face them down and tell them to get the finger out and fix their country before we give them any more money. And if they continue vilifying Germany and whipping up this hate campaign against them, then they can go fcuk themselves. And the EU is pretty well right about the EU too. Austerity needs to continue, while at the same time implementing some stimulus to the EU economies now that the worst is over. Steady does it.0 -
I don't see it. Just because the new Greek Gov think things have changed doesn't make it so. The Media is making hay out of the crisis, as they always do and those who base their views on the manifest self interest and views of the media only end up doing their bidding.
Austerity works, and has worked very well where it has been effectively implemented. Reducing spending and increasing efficiency works.
But the short attention span and the strategic marketing cycle of the media has basically whipped up the more gullible public to think that massive international economic crises can be fixed in a few years, so when it hasn't all been fixed and wrapped up in a nice pink bow .... everyone should throw their hands up in the air and abandon common sense.
Well I don't buy it. The economic state of most of the EU has improved immeasurably. Recession hasn't ended yet because it takes time. People who think that continuing to spend more than you can afford is something that will help the EU are just daft.
Just because the Greeks essentially refused to reform their country and economy and flushed another 200+billion of our money down the drain doesn't mean cutting back spending is wrong. The EU is right about Greece, it needs to face them down and tell them to get the finger out and fix their country before we give them any more money. And if they continue vilifying Germany and whipping up this hate campaign against them, then they can go fcuk themselves. And the EU is pretty well right about the EU too. Austerity needs to continue, while at the same time implementing some stimulus to the EU economies now that the worst is over. Steady does it.
You are raising some valid concerns, but I can’t accept that people seeking alternative solutions to failed, single minded “austerity only” solutions is really vilifying the Germans, Dutch, Greeks or anyone else. If you think about it, the use of emotive words like “vilifying” and “fcuk themselves” serve more as a distraction and diversion into personal abuse than any attempt to apply serious thought to a very real problem for many people.
Lest it be misunderstood, I’m not saying that every element of the Greek austerity programme should be thrown out or that everything demanded by the new Greek government is the solution either. These should be just starting positions in the prelude to meaningful discussions between the senior stakeholders involved.
Sticking to a mantra of a failed single approach to anything never works – and it’s no different in the political economy. What is needed is a meeting of minds that is best reached through negotiation and consideration of more realistic alternatives to the current troika austerity programme that has so manifestly failed the Greek people and the EU as a whole.
Indeed, we have our own lessons from history of one track, “laissez faire” economics back in the 1840’s, led by the then Assistant Secretary to the Treasury, Edward Trevelyan. Not exactly the same situation, granted, but the laziness of being satisfied with one political philosophy, regardless of the human consequences, is still the same. There’s always more than one solution to a problem, if only more people open their minds to it – particularly when the troika solution for Greece has become unworkable as outlined in Alexis Tsipras' "open letter" to German citizens published on Jan.13 in Handelsblatt, a leading German language business newspaper:Most of you, dear Handesblatt readers, will have formed a preconception of what this article is about before you actually read it. I am imploring you not to succumb to such preconceptions. Prejudice was never a good guide, especially during periods when an economic crisis reinforces stereotypes and breeds bigotry, nationalism, even violence.
In 2010, the Greek state ceased to be able to service its debt. Unfortunately, European officials decided to pretend that this problem could be overcome by means of the largest loan in history on condition of fiscal austerity that would, with mathematical precision, shrink the national income from which both new and old loans must be paid. An insolvency problem was thus dealt with as if it were a case of illiquidity.
What is needed to move forward is meaningful negotiation to find more acceptable “win / win” solutions, as what eventually has to happen between strikers and employers or debtors and creditors in a bankruptcy situation. Solutions that place all the burden on ordinary citizens and remove the impact from wealthy sectional interests are simply not working.
I was not impressed by the appearance on BBC TV of head of the Eurogroup chairing eurozone finance meetings, Jeroen Dijsselbloem, who looked decidedly ill at ease with his position, in contrast to Greek Finance Minister Yanis Varoufakis, who appeared much more self-assured and confident he was doing the right thing.
Good to see on this DW report that:White House spokesman Josh Earnest said Friday the United States would continue cooperating closely with the new government in Greece and other European leaders to resolve differences.
"We're going to continue to work closely with the European Union, and that means engaging with the new political leaders in Greece to try to resolve these differences and get Greece and Europe and the global economy back on a path to growth and prosperity," he said.0 -
We’ve seen an understandable reaction to Greek moves for debt re-structuring from the political elite in Germany. But it’s very early days yet in the ongoing negotiation process and what we have been seeing so far are the opening positions.
But not all German economic thinking sides with the one-track, troika austerity model. For example, here’s food for thought in Fintan O’Toole report in today’s Irish Times about:A study by Carmen Reinhart and Christoph Trebesch, published in October by the University of Munich, looks at negotiated debt deals in the periods after the first World War and between 1979 and 2010.
This article points to the contrast between empirical evidence and received economic orthodoxy about debt deals. History shows that debt deals are not catastrophes of moral hazard but, in reality, enable countries and economies to recover, move forward and eventually demonstrate a credible ability to borrow and repay future loans.
Moreover, the Greek position is not to reject the troika programme totally. Its Finance Minister, Yaroufakis, is reportedly saying that Greece accepts 70% of the austerity measures but wants to develop its own recovery programme.
Maybe Vincent Brown’s observation in his TV3 programme last night has some truth in it, that there is a sense in Fine Gael (and perhaps others in Europe) of “we don’t agree with the Greece approach because they are doing what we said we would do in the election campaign – and then didn’t do).
Given a bit more time, I believe and hope that a deal will be done. The markets seem to agree. I guess it will take a bit more time for the political rhetoric to calm down and some face saving formula to be found!0 -
Two points, I guess - they may have been covered before.
First, the Greeks are not fighting now for a debt writeoff from evil bankers. They have no market debt - all their sovereign debt is owed to official lenders. That means that any Greek writeoff comes from the pockets of European governments, and in turn from the pockets of European taxpayers.
The EU was not set up as a transfer union, and at no point have European citizens voted for such a thing. To assume that simply because the Greeks want a writeoff, European nations should therefore set a precedent for something in which their citizens have not been consulted seems to me a very undemocratic idea - I wish I were more surprised by the fact that many of those calling for it are also those regularly throwing around the claim that things they don't like are undemocratic. That seems to have gone by the wayside here.
On the other hand, at least they could be said to be putting their money where their mouths are, given that they're calling for a Greek writeoff at their own expense - but I somehow doubt that the extra austerity necessary to rebalance budgets after a Greek debt writeoff forms part of their thinking. The money tree will provide.
Second, comparing a Greek debt writeoff to the German post-war writeoff is frankly silly. Germany got the writeoff because the Allies needed Germany, and intended using it as an armed base for their own forces and an unarmed economic engine for their own economies against the danger of the Soviet Union. Nobody needs Greece that way, and I somehow doubt Greece would accept the same status as, in effect, a US/NATO protectorate. On the contrary, they're calling for a restoration of sovereignty where Germany had to accept long-lasting external control - control that only ended in 1990 with the signing of the "Treaty on the Final Settlement With Respect to Germany" which formally ended WW2 and the powers of the Allies as an occupying force in Germany - and even there Germany had to accept restrictions on the size of its army.
cordially,
Scofflaw0 -
Second, comparing a Greek debt writeoff to the German post-war writeoff is frankly silly. Germany got the writeoff because the Allies needed Germany, and intended using it as an armed base for their own forces and an unarmed economic engine for their own economies against the danger of the Soviet Union. Nobody needs Greece that way, and I somehow doubt Greece would accept the same status as, in effect, a US/NATO protectorate. On the contrary, they're calling for a restoration of sovereignty where Germany had to accept long-lasting external control - control that only ended in 1990 with the signing of the "Treaty on the Final Settlement With Respect to Germany" which formally ended WW2 and the powers of the Allies as an occupying force in Germany - and even there Germany had to accept restrictions on the size of its army.
cordially,
Scofflaw
yeah. good thing we don't have a belligerent russia on our doorstep anymore.0 -
Two points, I guess - they may have been covered before.
First, the Greeks are not fighting now for a debt writeoff from evil bankers. They have no market debt - all their sovereign debt is owed to official lenders. That means that any Greek writeoff comes from the pockets of European governments, and in turn from the pockets of European taxpayers.
The EU was not set up as a transfer union, and at no point have European citizens voted for such a thing. To assume that simply because the Greeks want a writeoff, European nations should therefore set a precedent for something in which their citizens have not been consulted seems to me a very undemocratic idea - I wish I were more surprised by the fact that many of those calling for it are also those regularly throwing around the claim that things they don't like are undemocratic. That seems to have gone by the wayside here.
On the other hand, at least they could be said to be putting their money where their mouths are, given that they're calling for a Greek writeoff at their own expense - but I somehow doubt that the extra austerity necessary to rebalance budgets after a Greek debt writeoff forms part of their thinking. The money tree will provide.
Second, comparing a Greek debt writeoff to the German post-war writeoff is frankly silly. Germany got the writeoff because the Allies needed Germany, and intended using it as an armed base for their own forces and an unarmed economic engine for their own economies against the danger of the Soviet Union. Nobody needs Greece that way, and I somehow doubt Greece would accept the same status as, in effect, a US/NATO protectorate. On the contrary, they're calling for a restoration of sovereignty where Germany had to accept long-lasting external control - control that only ended in 1990 with the signing of the "Treaty on the Final Settlement With Respect to Germany" which formally ended WW2 and the powers of the Allies as an occupying force in Germany - and even there Germany had to accept restrictions on the size of its army.
cordially,
Scofflaw
The easiest way for the German to gain EU-wide support for their position is to turn around and say, OK, if the EU needs Greece, all should pay the price, forgiving 30% of Greek debt to sovereign governments costs X% on the EU-wide VAT rate for Y years, now off you go to your parliaments and your voters and get approval for that.0 -
The EU was not set up as a transfer union, and at no point have European citizens voted for such a thing. To assume that simply because the Greeks want a writeoff, European nations should therefore set a precedent for something in which their citizens have not been consulted seems to me a very undemocratic idea -
When did the EU become a democracy?0 -
Advertisement
-
30% of Greek debt is already gone. Probably more. It will never be paid back. It only exists on paper.The easiest way for the German to gain EU-wide support for their position is to turn around and say, OK, if the EU needs Greece, all should pay the price, forgiving 30% of Greek debt to sovereign governments costs X% on the EU-wide VAT rate for Y years, now off you go to your parliaments and your voters and get approval for that.0 -
When did the EU become a democracy?
In most people's understanding of the term, at its inception, since it was always a union of democratic states, and the treaties created by democratic processes. None of the EU treaties have contained the setup of a transfer union, so there is no democratic mandate for the EU to operate as one.
cordially,
Scofflaw0 -
sock puppet wrote: »yeah. good thing we don't have a belligerent russia on our doorstep anymore.
I'm sure the Greeks will be the mainstay of our defence should Russia decide to send its holidaying soldiers and humanitarian convoys into the EU.
amused,
Scofflaw0 -
-
Rather than seeing this issue as a problem to be debated, communicated to its citizens and resolved, it’s very tempting to fall into the trap of personalising the argument. This often results in identifying a person putting forward a point for consideration as a fellow traveller of one extreme or another – from the moral hazard to the complete debt forgiveness school of thought, with no thought out in-between alternative. The result – forget about the issue, attack the person rather than debate the pros and cons of an issue in a constructive way.
For this reason, I believe it is important to consider things in the round, going back to fundamentals rather than picking on particular pieces of the argument, if we are to achieve successful outcomes to debates like this, that are acceptable to a majority of people.
To help in this regard, one can look to Kipling’s Serving Men: “I KEEP six honest serving-men (They taught me all I knew); Their names are What and Why and When And How and Where and Who”:
What is the purpose of the EU: I guess it depends on your point of view and whether you take a magnanimous, optimistic view of human nature or a suspicious, pessimistic view. I would summarise the purpose of the EU as peace, prosperity and equality for the people of Europe through democratic means, but you can always go back to the history and treaties, for example:
http://europa.eu/about-eu/index_en.htm
http://www.eu-oplysningen.dk/euo_en/spsv/all/1/
No it’s not a “transfer union”, even if for years there have been huge cross-EU transfers through the European Social Fund, European Cohesion Fund, European Structural Fund, etc: http://ec.europa.eu/regional_policy/index.cfm/en/funding/
Why: In general, for the voidance of economic and political conditions that give rise to civil disorder, strife and even war. This was the backdrop to the earliest incarnations of the EU from the European Coal and Steel Community in the aftermath of WW2 to the EEC (1958) and eventually the EU (1983).
In the case of Greece, it is because, for years, government spending has been exceeding income. Thus far, they have been trying to control overspending through a combination of debt and austerity (reduced spending and more taxation). Agreed they could be doing things better and they need to tackle corruption realistically (hopefully this will be covered in the 30% area of Greek disagreement with troika reforms), but basically austerity has resulted in wiping away any realistic possibility that Greece can ever repay, let alone service its debts. The evidence is the reduction in wealth creating ability to pay (GDP), deflation, ever increasing debt and many of their more qualified, marketable people leaving the country for a better life elsewhere.
When: Hopefully, something better in the form of a solution will emerge from the current high level talks between EU state ministers.
How: I guess this is where most of the argument lies but it is up to the Greek government representatives to come up with a plan that is acceptable to other EU member states.
Where: Most of the action will have to happen in Greece, but, hopefully, with a more realistically achievable level of support from their fellow-EU member states, than has been forthcoming to date.
Who: Who pays, I guess. And what is the price of long run peace and security in Europe? In the absence of a federal Europe with a huge federal budget (such as they have in the USA), that’s a question each individual member state will have to decide. But any plan for further economic help, has to be matched by a realistic, achievable, measurable and time-lined Greek plan for getting there.0 -
-
According to this article in the Economist, the biggest sticking point in the negotiations is the issue of "conditionality" - the Greeks are dead set against it, whereas its EU partners insist on it.
It would seem that there is room for manoeuvre on how tight their fiscal budget should be.
The risky game of chicken continues!0 -
I don't see it. Just because the new Greek Gov think things have changed doesn't make it so. The Media is making hay out of the crisis, as they always do and those who base their views on the manifest self interest and views of the media only end up doing their bidding.
Austerity works, and has worked very well where it has been effectively implemented. Reducing spending and increasing efficiency works.
But the short attention span and the strategic marketing cycle of the media has basically whipped up the more gullible public to think that massive international economic crises can be fixed in a few years, so when it hasn't all been fixed and wrapped up in a nice pink bow .... everyone should throw their hands up in the air and abandon common sense.
Well I don't buy it. The economic state of most of the EU has improved immeasurably. Recession hasn't ended yet because it takes time. People who think that continuing to spend more than you can afford is something that will help the EU are just daft.
Just because the Greeks essentially refused to reform their country and economy and flushed another 200+billion of our money down the drain doesn't mean cutting back spending is wrong. The EU is right about Greece, it needs to face them down and tell them to get the finger out and fix their country before we give them any more money. And if they continue vilifying Germany and whipping up this hate campaign against them, then they can go fcuk themselves. And the EU is pretty well right about the EU too. Austerity needs to continue, while at the same time implementing some stimulus to the EU economies now that the worst is over. Steady does it.
This is such economic illiterate tosh its hard to know where to begin. Austerity hasn't worked anywhere. Greece's drop in GDP is equal to that of Germany's collapse from 1913-1920. That is it is equal to total war. Italy hasn't grown since the crisis. Most countries are struggling with massive overhanging debt and continuing deficit, and the lack of inflation and low tax revenues exacerbates the problem. Austerity just doesn't work. There is no theoretical framework to prove it works. In practice it doesn't work.0 -
Interesting to hear press conference with Greek Finance Minister, Yanis Varoufakis, immediately after today's Euro conference.
I have to say that he appears very level headed, calm and puts forward what appear to me to be rational, sensible points in the face of a very difficult situation for Greece and the EU as a whole.
These points include (my interpretation of what was said over the course of about a 1/2 hour) that:- The negotiations are being conducted in a spirit of collegiality
- All states have a equal status in the negotiations, not treating Greece as an inferior debtor state
- The curent programme is not working, has failed and a new workable, realistic programme needs to be agreed
- The European project is based on democracy - compromise between seemingly irreconcilable positions is a great feature of democracy
- There is still a need to find common ground between the existing programme and a new programme that makes provision for growth
- We must not allow an impasse to develop - there has to be give and take to allow the situation to stabilise and people to move on
- The message to the markets is that this is not a game - we are engaged in negotiations
- He is confident that Europe will pull an agreement from the current impasse
0 -
Advertisement
-
Eugene Norman wrote: »This is such economic illiterate tosh its hard to know where to begin. Austerity hasn't worked anywhere. Greece's drop in GDP is equal to that of Germany's collapse from 1913-1920. That is it is equal to total war. Italy hasn't grown since the crisis. Most countries are struggling with massive overhanging debt and continuing deficit, and the lack of inflation and low tax revenues exacerbates the problem. Austerity just doesn't work. There is no theoretical framework to prove it works. In practice it doesn't work.
Blaming Greeces poor economic purely on the affects of austerity require a certain amount suspension of disbelief. Italy hasn't grown since the crisis, but then it didn't grow before the crisis ether so no change there. Personally I do not support the out and out austerity as being promoted by Germany, but when people make blanket statements of "austerity doesn't work" I am always left waiting for their alternative. The likes of Syriza, Podemos and Sinn Fein keep saying they will end austerity but other than tax the rich, they don't have any viable plans to do so.0 -
Oops, of course, I should have said that the first thing Yanis Varoufakis referred to in his press conference was his rejection of the deadline being imposed for a decision on an extension to the current bail-out agreement. I can understand the need for member states to have as much detail as possible on any new package that they can bring back to their own parliaments – but the same applies to Greece. What they need is a bit of breathing space to develop a politically acceptable alternative course of action that will deliver some growth with which to resolve their political/economic problems. This needs to be more workable that the current process of impoverishing almost everyone and reducing them to a subservient, vassal state within the EU.
Interesting to hear Brendan Howlin on radio this morning making points from a viewpoint sympathetic to the Greek position – in stark contrast to our government’s perceived position of siding with Germany and the other states that are insisting that the current austerity approach (or minor tweaking thereof) is the only way!
Vincent Brown has also been making sympathetic noises towards the Greek position and how it is difficult to understand the craven position being adopted by our political leaders in siding with Germany against cutting a bit of slack towards Greece. Germany has benefited enormously from the Euro project and made other less well organised states poorer in the process by not being able to respond in the old pre-Euro way. Maybe some new found moral courage “to do the right thing” needs to be thought through and voiced by a lot more people. Kicking a neighbour who is down and removing all hope of recovery can never be the “right thing to do” – no matter what conventional wisdom has been up to now!
As regards fear of supporting the likes of Sinn Fein at home, maybe FG should simply “man up” and take on some of their more sensible policies as their own – particularly with regard to toning down austerity and making it more politically viable. We have plenty of examples from history, such as happened to the Greens all over Europe when mainstream parties took on their political clothing, thus rendering them obsolete.
Some quotes from noted economist, J.K. Galbraith may be appropriate here, with regard to how the new wave of Greek political leaders are conducting themselves:
“All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership”.
“Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable”.
“In all life one should comfort the afflicted, but verily, also, one should afflict the comfortable, and especially when they are comfortably, contentedly, even happily wrong”.
“The conventional view serves to protect us from the painful job of thinking”.
“All successful revolutions are the kicking in of a rotten door”.0 -
Blaming Greeces poor economic purely on the affects of austerity require a certain amount suspension of disbelief. Italy hasn't grown since the crisis, but then it didn't grow before the crisis ether so no change there. Personally I do not support the out and out austerity as being promoted by Germany, but when people make blanket statements of "austerity doesn't work" I am always left waiting for their alternative. The likes of Syriza, Podemos and Sinn Fein keep saying they will end austerity but other than tax the rich, they don't have any viable plans to do so.
I agree with most of what you say but would add that the Greek government need to be cut a bit of slack to develop their alternative to the present austerity plan.
This will not be achieved in a quick fix manner, either by adhering to strict austerity and protecting the rich at the expense of the majority or by simply "taxing the rich".
I believe the Greeks have an outstanding, courageous, competent and rational planner, man of action and spokesman in their Finance Minister, Yanis Varoufakis. They need a bit of time to put together specific proposals - timelined a bit more realistically than next Friday.
And Varoufakis and others have already put forward their "modest proposals" here.
What is needed now is a bit of time to allow the new Greek leaders to develop a more realistic plan out of their current dilemma.0 -
That's because power to stimulate the economy, which contributed significantly to US and UK recovery, has been stripped from individual MSs, both in terms of the discretions afforded to the Commission, and the constraints imposed on (and by) the European Central Bank.when people make blanket statements of "austerity doesn't work" I am always left waiting for their alternative. The likes of Syriza, Podemos and Sinn Fein keep saying they will end austerity but other than tax the rich, they don't have any viable plans to do so.
Just as the anti-austerity parties of Europe are struggling to evince an adequate political response to a six-year-old crisis, so too are the parties who favour more restrictive fiscal policies.
When we talk of structural problems in the European economies, we talk of squeezed profit margins, and high taxes, and boring-old-fart institutions generating red tape.
Nobody ever seems to refer to the EU's and EA's own structural problems that have left the small European nations with little choice but to pursue policies with adverse cyclical outcomes in terms of job destruction, plummeting demand and productive investment falling off a cliff.
Little wonder then, that miserable little politicians and ashen-faced economists are left stammering for solutions. They've just awoken to the aftermath of a great bacchanalian party with their knickers around their ankles, their handbags empty, their overdraft withdrawn, and some wretched tire-au-flanc has made-off with their endowment.
The democratic institutions of these member states have been swindled. Don't act so surprised when they don't have any solutions.0 -
golfwallah wrote: »
I believe the Greeks have an outstanding, courageous, competent and rational planner, man of action and spokesman in their Finance Minister, Yanis Varoufakis. They need a bit of time to put together specific proposals - timelined a bit more realistically than next Friday.
This is where we differ. I have absolutely no faith in Varoudakis, Tsipra or Syriza to put together meaningful reforms that they could actually implement. Worse still I think to leave the Greek government to their own devices could actually exacerbate the problem with more bloated state spending and an erosion of Greek competitiveness.
I agree the Greeks need more time, however the vast majority of their debt is owed to European taxpayers who need assurances that their money will be repayed. The Greeks are demanding the former while making minimal effort to provide anything of the latter.0 -
A Tyrant Named Miltiades! wrote: »That's because power to stimulate the economy, which contributed significantly to US and UK recovery, has been stripped from individual MSs, both in terms of the discretions afforded to the Commission, and the constraints imposed on (and by) the European Central Bank.
The Greek economy was a basket case before they joined the Euro. They used the access to cheap currency to paint over the cracks in the foundation of their economy and when the foundation started to crumble they started blaming the paint.0 -
Advertisement
-
This is where we differ. I have absolutely no faith in Varoudakis, Tsipra or Syriza to put together meaningful reforms that they could actually implement. Worse still I think to leave the Greek government to their own devices could actually exacerbate the problem with more bloated state spending and an erosion of Greek competitiveness.
I agree the Greeks need more time, however the vast majority of their debt is owed to European taxpayers who need assurances that their money will be repayed. The Greeks are demanding the former while making minimal effort to provide anything of the latter.
If everyone agreed entirely with either the Greek position or that of the dominant EU states (and the financial troika masters), what a boring, utopian world we would live in!
But regardless of history, we have to deal with the situation "as is" and move , hopefully, to a better negotiated one.
And, as I see it, the differences between Greece and other member states' position (on whether to call it a loan extension or a new bridging loan) are more about appearances, window dressing and face saving than anything else.
The Greeks need to bring back something to their parliament and electorate - as do the other member states.
Some face saving formula needs to be found. No one is talking about debt write-offs any more and the Greeks need to be given the means to come up with a plan that will help them and the EU re-build their economies.0 -
I don't believe 'basket case' is accurate. It was an economy with major structural problems, indeed. But this has nothing whatever to do with my point.The Greek economy was a basket case before they joined the Euro.
A history lecture is not a solution unless it contains a lesson. Calling Greece a basket case is just invective.
The 1953 debt conference however, is quite possibly a valuable lesson.0 -
golfwallah wrote: »And, as I see it, the differences between Greece and other member states' position (on whether to call it a loan extension or a new bridging loan) are more about appearances, window dressing and face saving than anything else.
The Greeks need to bring back something to their parliament and electorate - as do the other member states.
The Greek government could try telling their electorate the Truth. If they have lied to their electorate, that is their problem, not anyone else's.
It would be highly questionablefor the other governments to agree to semantic nonsense such as the "Troika" isn't the Troika if we call it the "Trio" or something equivalent.
Successive Greek governments have misled their electorates and helping another one to do so is not in the interest of either the other member states or the Greek people.0 -
A Tyrant Named Miltiades! wrote: »I don't believe 'basket case' is accurate. It was an economy with major structural problems, indeed. But this has nothing whatever to do with my point.
A history lecture is not a solution unless it contains a lesson. Calling Greece a basket case is just invective.
The 1953 debt conference however, is quite possibly a valuable lesson.
I suppose when I used the term 'basket case' I was referring to an economy which had major structural problems, where corruption was endemic and tax evasion was a way of life. However I am happy to retract the term 'basket case'. However the problems I described above still persist today. Offering Greece a solution to their problems is useless unless it contains a lesson. It is possible that requiring the Greek government adheres to prudent fiscal policies would also be a valuable lesson.0 -
golfwallah wrote: »If everyone agreed entirely with either the Greek position or that of the dominant EU states (and the financial troika masters), what a boring, utopian world we would live in!
But regardless of history, we have to deal with the situation "as is" and move , hopefully, to a better negotiated one.
And, as I see it, the differences between Greece and other member states' position (on whether to call it a loan extension or a new bridging loan) are more about appearances, window dressing and face saving than anything else.
The Greeks need to bring back something to their parliament and electorate - as do the other member states.
Some face saving formula needs to be found. No one is talking about debt write-offs any more and the Greeks need to be given the means to come up with a plan that will help them and the EU re-build their economies.
Syriza have talked themselves into a corner, promising the undeliverable in return for votes. Now confronted with the reality of their demagoguery they are doubling down and digging themselves into an entrenched position. A compromise needs to be met, however worrying about the popularity of a bunch of populists should not be high on the list of priorities.0 -
Advertisement
![[Deleted User]](/applications/dashboard/design/images/defaulticon.png)
Advertisement