Greece Debt Crisis - Après Oxi

Happyman42

Deleted User wrote: »

Ignorance of the law is no defence in court.

Ignorance of publicly available information is not really a solid defence here either.

I think, when you have politicians cheerleading and obscuring the reasons for a boom, not to mention lambasting those who point to the lies (the suicide comments etc) it is kneejerk to blame the people. I would imagine the same went on in Greece.

Lessons for everyone here, will they be learned? I doubt it.

Deleted User

Deleted User wrote: »

I spend 20seconds on Google and am able to get both nominal and % of GDP versions, hence a pretty good citation that yes, in fact, we did know the level of debt. It's publicly available.

If you think I answered a different question other than the one that Happyman asked, can you tell us what it was?

No, frankly. I'm not repeating a perfectly clear post.

KingBrian2

I say lets get back on track, we all know words were said in the heat of the moment by both sides that in hindsight are regrettable. Time to focus on repairing Greece's banks, safeguarding the depositors must be the top priority for all concerned.

A Tyrant Named Miltiades!

A Tyrant Named Miltiades! wrote: »

No, frankly. I'm not repeating a perfectly clear post.

So yes, we did know the debt levels.

Perhaps you could argue that the majority didn't understand those numbers, but that's perfectly clearly a different argument and so it's quite unusual to respond to my post whilst trying to begin that argument.

Quin_Dub

alias no.9 wrote: »

If you consider that the unsustainable taxes were for the most part
-taxes on credit transactions
-taxes on employment in industries whose products and services were purchased using credit

They were in fact running the country through off balance sheet borrowing. The credit crunch brought the structural deficit that had been funded by this off balance sheet borrowings onto the balance sheet.

No argument from me - Our Government were guilty of lax to non-existent oversight of the economic levers that were driving incomes...

However , Greece did not have those things - They simply borrowed money to enable them to engage in auction politics and clientelism - Aided,abetted and cheer-led by the Greek public, who like I said burned any government that had the temerity to try to change things - See the 2005 elections when Pasok (I think) tried to cut spending after the costs of the Olympics started to bite...They got destroyed...

Much like Noonan's FG in 2002 to be fair when he suggested that we slow things down...

KingBrian2

Quin_Dub wrote: »

No argument from me - Our Government were guilty of lax to non-existent oversight of the economic levers that were driving incomes...

However , Greece did not have those things - They simply borrowed money to enable them to engage in auction politics and clientelism - Aided,abetted and cheer-led by the Greek public, who like I said burned any government that had the temerity to try to change things - See the 2005 elections when Pasok (I think) tried to cut spending after the costs of the Olympics started to bite...They got destroyed...

Much like Noonan's FG in 2002 to be fair when he suggested that we slow things down...

It got out of hand and before long they had a national disaster on their hand their National Deficit was stretching them to breaking point and the loss of tourism and shipping as a result of the credit crunch was the finishing touches. This is not a tragedy as such but rather man made hubris.

Deleted User

Deleted User wrote: »

So yes, we did know the debt levels.

Perhaps you could argue that the majority didn't understand those numbers, but that's perfectly clearly a different argument and so it's quite unusual to respond to my post whilst trying to begin that argument.

No, it's quite unusual that you don't understand this.

In 2010, it seemed to many people that it was reasonable to continue with the Irish Government's four-year programme and its forecasted sovereign liabilities, which would increase nominal governemnt indebtedness, but which would remain sustainable due to GDP growth. Ireland was due to increase its debt to 190 billion euro, which at that time represented about 85% of GDP.

However, when Ireland's debt arrived at 190 billion euro, two years later, the GDP denominator had contracted to such an extent (and worse than forecast) that the debt ratio represented 120% of GDP, no longer 85%.

This is my point: no ordinary observer could have predicted such a dramatic drop in debt sustainability on any factual basis, partly because of the stochastic nature of the economy, partly because of bad information and simplistic linear models of forecasting growth, which turned out to be incorrect.

Of course, this was far more prevalent in Greece, which would have had sustainable debt had these original forecasts been anywhere close to accurate at the time of its bailout.



The European Authorities and the IMF's policy on predicting growth can be summed up with the words 'mañana, mañana'

BoatMad

Happyman42 wrote: »

I think, when you have politicians cheerleading and obscuring the reasons for a boom, not to mention lambasting those who point to the lies (the suicide comments etc) it is kneejerk to blame the people. I would imagine the same went on in Greece.

Lessons for everyone here, will they be learned? I doubt it.

In reality the politicians were just reflecting the mood f the people , party on , release equity , borrow, sell etc.

Nobody wanted to look under the stones

There has been clear warnings about the tax system relying on house taxes and consumption taxes. N the 2005-2008 period. This ultimately was the cause of all the subsequent austerity

The debt levels in themselves are not relevant.

Godge

A Tyrant Named Miltiades! wrote: »

Not really.

Indebtedness is usually expressed in a ratio where the denominator is constantly changing.

For example, Greece's current debt is about 100% of its 2010 GDP, but 175% of GDP today.

Ireland's government debt for end-2014 is about 85% of 2010 GDP; now it's something like 110%

Since this ratio is more important than the nominal value of the debt, it's fair to say that we didn't appreciate what we were getting into, nor in fairness to the European authorities, did they.

Ireland's GDP for 2014 is higher than the GDP for 2010.

http://www.cso.ie/indicators/default.aspx?id=1NQQ23A

The bit in bold does not make sense to me as the figures show it should be the opposite.

Godge

Godge wrote: »

Ireland's GDP for 2014 is higher than the GDP for 2010.

That's the point. You're presumably misreading that post.

Godge

Happyman42 wrote: »

I think, when you have politicians cheerleading and obscuring the reasons for a boom, not to mention lambasting those who point to the lies (the suicide comments etc) it is kneejerk to blame the people. I would imagine the same went on in Greece.

Lessons for everyone here, will they be learned? I doubt it.

What is very strange is that many of the same people who claim they were hoodwinked by FF the first time around and swallowed all the propaganda about how great things were are now swallowing all the propaganda from SF/AAA about how it is not our fault. Fool me once and all that. The real fools will be those who vote for SF/AAA to bring us back to the policies of spend, spend, spend that failed before.

Godge

A Tyrant Named Miltiades! wrote: »

That's the point. You're presumably misreading that post.

I must be misreading it.

Are you expressing end-2010 debt as a percentage of end-2010 GDP and comparing that to end-2014 debt as a percentage of end-2014 GDP? If so, then ok.

The way it reads it looks as if you are expressing end-2014 debt as a percentage first of end-2010 GDP and then as a percentage of end-2014 GDP. In which case the figures are wrong.

I am saying that 2014 debt, and the debt profile as it was projected at the outset of the Irish Bailout, was sustainable in 2010 by 2010 standards.

There's a limit to how many more times I can say this using different word combinations... it's a simple enough point.

molloyjh

Happyman42 wrote: »

The message from government was the good times where going to roll. And bpeople believed that and elected them.
It is kneejerk and unfair therefore to blame the people, they simply were not being given the true picture, that it was essentially a bubble.
Of course you can say, they SHOULD have known but unfortunately that is not the way it works in reality.

Governments would have us believe now that all is well in the EU and the Euro...is it though? I think an awful ot more people have had their eyes opened by this current crisis and that (my original point) is an oppurtunity for the left. One that some may regret giving them.

The bolded bit is the issue. The people were happy enough to keep hteir eyes closed. That way they felt they couldn't be blamed. However the realities of democracy are that the people have responsibilities as well. And that is to educate themselves and make the most informed decisions they can for the overall benefit of the country.

Also, the Government weren't going off on random tangents and doing their own thing for the years that the country was being mismanaged. It was operating on a mandate from the people and focusing on the things that the people wanted them to focus on, because that's what was going to get them re-elected.

And I say all of the above in the full knowledge that I was one of those people in the Irish example. I didn't vote FF, but other than that I wasn't judiciously warning people about the dangers of cheap credit. I wasn't insanely irresponsible, but I also didn't do myself any favours in the long run. And I'm paying the price for that now in a number of ways. And I have to accept that. I got myself here, nobody else. And that's exactly what far too many people refuse to do. Stand up and accept the consequences of their own actions.

Happyman42

Godge wrote: »

What is very strange is that many of the same people who claim they were hoodwinked by FF the first time around and swallowed all the propaganda about how great things were are now swallowing all the propaganda from SF/AAA about how it is not our fault. Fool me once and all that. The real fools will be those who vote for SF/AAA to bring us back to the policies of spend, spend, spend that failed before.

We can ony go on what actually happened not conjecture on what might happen. FF where in power and made the mistakes and to a large degree actively told/encouraged people to look the other way.

And you forgot to mention that the people swallowed a fair amount of guff and dishonest electioneering from FG/Lab. last time out.

The reality is up until recently people didn't pay much attention as long as things where going relatively well.
My point is, the left have the ability to capitalise on a better understanding of how the EU and the Euro works and the inherent flaws and how that is/has been impacting on the people of Europe. And that may not go well with the current power brokers.
The battle lines are more defined rather than oliterated is the important outcome going forward imo

Godge

Happyman42 wrote: »

We can ony go on what actually happened not conjecture on what might happen. FF where in power and made the mistakes and to a large degree actively told/encouraged people to look the other way.

And you forgot to mention that the people swallowed a fair amount of guff and dishonest electioneering from FG/Lab. last time out.

The reality is up until recently people didn't pay much attention as long as things where going relatively well.
My point is, the left have the ability to capitalise on a better understanding of how the EU and the Euro works and the inherent flaws and how that is/has been impacting on the people of Europe. And that may not go well with the current power brokers.
The battle lines are more defined rather than oliterated is the important outcome going forward imo

On the bit in bold, if their aim is to collapse the economy and close the banks, then yes I can agree that the left have the ability to capitalise on their understanding of how the EU and the EURO works. If we want a functioning society and economy in Ireland, the lesson from this Greek fiasco is don't listen to anyone who remotely suggests we should do something similar. That means Pearse and Paul, the two holiday buddies, should be left out there.

BoatMad

Happyman42 wrote: »

We can ony go on what actually happened not conjecture on what might happen. FF where in power and made the mistakes and to a large degree actively told/encouraged people to look the other way.

And you forgot to mention that the people swallowed a fair amount of guff and dishonest electioneering from FG/Lab. last time out.

The reality is up until recently people didn't pay much attention as long as things where going relatively well.
My point is, the left have the ability to capitalise on a better understanding of how the EU and the Euro works and the inherent flaws and how that is/has been impacting on the people of Europe. And that may not go well with the current power brokers.
The battle lines are more defined rather than oliterated is the important outcome going forward imo

Of all the misleading that has been going on , the left has been to forefront in that , misleading people into believing there are solutions when none are in reality available , and appointing blame that is convienent for simple public consumption.

Greece is a terrible lesson when the electorate actually beleives these muppets.

Happyman42

BoatMad wrote: »

Of all the misleading that has been going on , the left has been to forefront in that , misleading people into believing there are solutions when none are in reality available , and appointing blame that is convienent for simple public consumption.

Greece is a terrible lesson when the electorate actually beleives these muppets.

Is it not misleading to say that anything has been solved for us in the EU here?

K-9

Godge wrote: »

On the bit in bold, if their aim is to collapse the economy and close the banks, then yes I can agree that the left have the ability to capitalise on their understanding of how the EU and the EURO works. If we want a functioning society and economy in Ireland, the lesson from this Greek fiasco is don't listen to anyone who remotely suggests we should do something similar. That means Pearse and Paul, the two holiday buddies, should be left out there.

Can we leave the cafe standard personal posts out please.

molloyjh

Happyman42 wrote: »

Is it not misleading to say that anything has been solved for us in the EU here?

Of course something has been solved. Greece have now accepted that severe austerity is required. This fight against the EU has left the country in greater debt, crippled its financial industry, made life near unbearable for its citizens and shown them up on the world stage. There has been no up side for Greece from this. Getting them to knock this stupidity on the head is an achievement. Albeit one that should never have been required.

molloyjh

molloyjh wrote: »

There has been no up side for Greece from this. Getting them to knock this stupidity on the head is an achievement.

Here are the problems I have with this sentiment, which is roughly characteristic of the anti-Syriza sentiments on this thread:

Firstly, it knocks the bottom out of any claim of an honest economic critique. There is no sign of approval for Syriza for its proposed reforms which people claim are paramount, only political triumphalism and grandstanding at Syriza's supposed capitulation. It's like watching a convoy of GAA fans passing victoriously through their opponents' county with their heads out the window.

Secondly, you're deliberately ignoring the inevitable debt relief deal which forms part of Greece's bailout request. You triumphantly claim there is no upside for Greece, and when the debt relief deal emerges, you will undoubtedly return to this forum and downplay its significance, regardless of its significance.

I have seen about two posters in this entire thread take a nonpartisan approach to the current crisis, and they haven't been back for many pages. I'm not claiming I'm non-partisan myself, but I'm trying not to let it get the better of me.

In the end, as Rabobank predicted in a circular many months ago, the whole affair will end with a meeting in the middle, where both sides (and their convoys) will be able to claim victory.

Happyman42

A Tyrant Named Miltiades! wrote: »

Here are the problems I have with this sentiment, which is roughly characteristic of the anti-Syriza sentiments on this thread:

Firstly, it knocks the bottom out of any claim of an honest economic critique. There is no sign of approval for Syriza for its proposed reforms which people claim are paramount, only political triumphalism and grandstanding at Syriza's supposed capitulation. It's like watching a convoy of GAA fans passing victoriously through their opponents' county with their heads out the window.

Secondly, you're deliberately ignoring the inevitable debt relief deal which forms part of Greece's bailout request. You triumphantly claim there is no upside for Greece, and when the debt relief deal emerges, you will undoubtedly return to this forum and downplay its significance, regardless of its significance.

I have seen about two posters in this entire thread take a nonpartisan approach to the current crisis, and they haven't been back for many pages. I'm not claiming I'm non-partisan myself, but I'm trying not to let it get the better of me.

In the end, as Rabobank predicted in a circular many months ago, the whole affair will end with a meeting in the middle, where both sides (and their convoys) will be able to claim victory.

Agree with that.

The issue of debt relief is the crux here. Whether or not Greece gets a deal they can live with the issue will only be dealt with in a Greek context. Therefore the problem for the EU still remains at we will be at crisis point again sometime in the future.

KingBrian2

Happyman42 wrote: »

Agree with that.

The issue of debt relief is the crux here. Whether or not Greece gets a deal they can live with the issue will only be dealt with in a Greek context. Therefore the problem for the EU still remains at we will be at crisis point again sometime in the future.

Fixing the banks is more important than rewarding the economy with debt write downs. The only way to do that is restoring confidence to the financial sector.

Sand

A Tyrant Named Miltiades! wrote: »

Firstly, it knocks the bottom out of any claim of an honest economic critique.

True, but there is no honest economic critique in the first place. It has always been political necessities over economic realities when it comes to Greece. This is why the ECB and the Eurozone are involved in the bailouts at all when it should surely be an IMF issue only. It was simply politically unacceptable for the Eurozone that the IMF might arrive in Greece, a Eurozone member, like it was some South American or African state. It was also politically unacceptable that a Eurozone member might be bankrupt, so it was politically determined the problem was merely liquidity over all evidence.

People demonising the Greeks and Syriza are tilting at windmills. Syriza has always been a whipping boy for the local far left or populist grouping - in Ireland's case SF or various Independents. Again, its all politics, not economic reality.

Honestly, I think it would be best for the Eurzone and the EU as a whole if they removed themselves from Greece and simply allowed the IMF to get on with their job. Their involvement has turned a straightforward economic/fiscal crisis into a completely toxic political crisis that has pretty much finished off any hopes of further European integration for a generation.

KingBrian2

Sand wrote: »

True, but there is no honest economic critique in the first place. It has always been political necessities over economic realities when it comes to Greece. This is why the ECB and the Eurozone are involved in the bailouts at all when it should surely be an IMF issue only. It was simply politically unacceptable for the Eurozone that the IMF might arrive in Greece, a Eurozone member, like it was some South American or African state. It was also politically unacceptable that a Eurozone member might be bankrupt, so it was politically determined the problem was merely liquidity over all evidence.

People demonising the Greeks and Syriza are tilting at windmills. Syriza has always been a whipping boy for the local far left or populist grouping - in Ireland's case SF or various Independents. Again, its all politics, not economic reality.

Honestly, I think it would be best for the Eurzone and the EU as a whole if they removed themselves from Greece and simply allowed the IMF to get on with their job. Their involvement has turned a straightforward economic/fiscal crisis into a completely toxic political crisis that has pretty much finished off any hopes of further European integration for a generation.

The IMF was in Greece and left, the previous gvt made steps to change the economy fundamentally as the Syriza crowd have said they wanted a negotiated settlement instead with the stakeholders of this debt namely the Eurogroup so little point in having an institution that is outside of Europe refereeing what is an internal € matter.

K-9

Maybe some truth in that, never thought I'd see the day that the EU would suggest airlifting food and medical supplies to a member state because of an economic crisis!

Sand

KingBrian2 wrote: »

The IMF was in Greece and left, the previous gvt made steps to change the economy fundamentally as the Syriza crowd have said they wanted a negotiated settlement instead with the stakeholders of this debt namely the Eurogroup so little point in having an institution that is outside of Europe refereeing what is an internal € matter.

Please don't take this the wrong way, but there is a lot in that sentence and one full stop. I'm having difficulty following your point.

But the IMF regularly plays referee between debtors and creditors. That is essentially its mission. It should have played that role in Greece, but the ECB and Eurozone found that politically unacceptable. I would differentiate Eurzone governments from Eurozone banks, but we all know that would be naive. So essentially, the creditors demanded they would be playing the game, and also acting as referee. Its not surprising the result has been a series of economically illiterate "solutions" to the Greek crisis, and a toxic political fallout.

oppenheimer1

A Tyrant Named Miltiades! wrote: »

[...] In the end, as Rabobank predicted in a circular many months ago, the whole affair will end with a meeting in the middle, where both sides (and their convoys) will be able to claim victory.

A successful negotiation has to end with both sides feeling like they won.

In this instance its clear Syriza have lost and subsequently capitulated. The concessions they've won are mere crumbs compared to what the creditors were looking for.

Unfortunately in situations like this, both parties have to take ownership and buy into the agreement. One sided ones rarely if ever work.

frankbrett

an IMF only program would be more onerous for Greece as IMF amortisations would kick in 4.5 years after disbursements, unlike EU loans with bullet repayments which notionally have an tenor of 7.5 years but it had been shown that there is flexibility to extend these further. In addition, as Greece is over quota, IMF interest rates would be a minimum of ~3.5% for the vast majority of the loan period. EU loans, in the strictest sense should reflect the cost of borrowing of the EU under the ESM program but again, given the payment holiday afforded by the EFSF, the EU have shown themselves open to flexibility. It is telling the the IMF are in favour of a larger ESM bailout for Greece as the bulk of principal repayments due within that period are to the IMF itself.

Permabear

This post has been deleted.

Sand

Sand wrote: »

True, but there is no honest economic critique in the first place. It has always been political necessities over economic realities when it comes to Greece.

The crisis has a heavy political dimension, but there's an ideological sincerity to it. I don't doubt the sincerity of Merkel and Schauble's economic theses any more than I doubt the sincerity of Tspiras and Varoufakis. Ah honest economic critique needs only to be sincere and economically non-heretical. It doesn't have to be correct.

What I am criticising is an insincere whooping and cheering for either side without caring about the underlying principles. That's not a boards issue, it's all over the media. People choose sides like they choose premiership soccer teams.

The 'coolest' (most interesting) financial & economic crisis since 1929 is on our very doorstep, forcing the Single Currency into ideological and existential crisis ... and most public commentary treats it like a Conor McGregor fight.

This is why the ECB and the Eurozone are involved in the bailouts at all when it should surely be an IMF issue only. It was simply politically unacceptable for the Eurozone that the IMF might arrive in Greece, a Eurozone member, like it was some South American or African state.

I take the opposite view. I've never understood why the IMF was involved to begin with.

Construction work on the European single currency is not yet complete, but the degree of economic and banking inter-connectedness, as well as its centralised monetary control, means that European involvement in the Greek bailout was entirely practical and sensible. Any sidestepping would have been a de facto retreat into a vision of Europe as a trade zone ... one of the very ideas the single currency was aimed to mend. I would quote Benjamin Franklin, "We must, indeed, all hang together or we shall all hang separately".

If anything, I still can't see any sense in IMF involvement.

Their involvement has turned a straightforward economic/fiscal crisis into a completely toxic political crisis that has pretty much finished off any hopes of further European integration for a generation.

I agree with the negative side of European involvement only in the sense that its solutions have damaged Europe, but I fully accept your point about a toxic legacy. Any Greeks I have met agree that the EU used to have immensely progressive associations, like increased gender equality and liberal European social values, and national progress, probably similar to Ireland. Needless to say that image of Europe has soured enormously on the European periphery, and a corresponding distrust has emerged within the core.

oppenheimer1 wrote: »

The concessions they've won are mere crumbs compared to what the creditors were looking for.

How can you possibly claim to know that before the details of any debt relief have even been announced, or even (formally) discussed at Council level.

Jonblack

Wikileaks good place to start, if only it was in real timeUS Bugs Germany Plotting BRICS Bailout for Greece
Date 2011
Classification TOP SECRET//COMINT//ORCON/NOFORN
WikiLeaks Synopsis
Intercepted communication by UK's Intelligence Services of German Chancellery Director-General for EU Affairs Nikolaus Meyer-Landrut reveals German negotiating positions ahead of a European Union Summit to discuss a joint German French response to the financial crisis in Greece. The report reveals that Germany had opposed tailored European solutions to the Greek crisis, instead supporting a special IMF bailout plan for Greece funded by the BRICS countries.

Download PDF
EU Summit: Germans Prepared to Oppose Special Solutions for Greek Financial Crisis (TS//SI//OC/NF)

(TS//SI//OC/NF) Ahead of yesterday's EU summit to discuss a Franco-German bailout plan for Greece (a breakthrough is not expected until another summit on Wednesday), German Chancellery Director-General for EU Affairs Nikolaus Meyer-Landrut provided on 14 October an overview of what Berlin planned to ask for and would be prepared to support. First, the German government wanted solutions that work within the context of current European legislation; accordingly, it would not agree to giving the European Financial Stability Facility (EFSF) a banking license, establishing a joint EFSF-European Central Bank Special Purpose Vehicle, or any other measures that would require legislative changes among the member states. On the other hand, the Germans would support a special IMF fund into which the BRICS (Brazil, Russia, India, China, and South Africa) nations would pool funds for the purpose of bolstering eurozone bailout activities. Meyer-Landrut also believed that a resolution of the Greek crisis will require greater private-sector involvement than was first thought, and that the eurozone must look beyond the technical aspects of a deal and focus instead on the actual progress that Greece will have to make, as regards both legislation and implementation. It was his further opinion that a full-term team will have to be ensconced in Athens for the purpose of monitoring the situation.


2nd Party British

German leadership

Z-3/OO/549834-11, 211414Z.

K-9

I thought the EU was run by Germany, but anyway.

Jonblack

K-9 wrote: »

I thought the EU was run by Germany, but anyway.

Always good to have a wingman.

KingBrian2

Jonblack wrote: »

Wikileaks good place to start, if only it was in real timeUS Bugs Germany Plotting BRICS Bailout for Greece
Date 2011
Classification TOP SECRET//COMINT//ORCON/NOFORN
WikiLeaks Synopsis
Intercepted communication by UK's Intelligence Services of German Chancellery Director-General for EU Affairs Nikolaus Meyer-Landrut reveals German negotiating positions ahead of a European Union Summit to discuss a joint German French response to the financial crisis in Greece. The report reveals that Germany had opposed tailored European solutions to the Greek crisis, instead supporting a special IMF bailout plan for Greece funded by the BRICS countries.

Download PDF
EU Summit: Germans Prepared to Oppose Special Solutions for Greek Financial Crisis (TS//SI//OC/NF)

(TS//SI//OC/NF) Ahead of yesterday's EU summit to discuss a Franco-German bailout plan for Greece (a breakthrough is not expected until another summit on Wednesday), German Chancellery Director-General for EU Affairs Nikolaus Meyer-Landrut provided on 14 October an overview of what Berlin planned to ask for and would be prepared to support. First, the German government wanted solutions that work within the context of current European legislation; accordingly, it would not agree to giving the European Financial Stability Facility (EFSF) a banking license, establishing a joint EFSF-European Central Bank Special Purpose Vehicle, or any other measures that would require legislative changes among the member states. On the other hand, the Germans would support a special IMF fund into which the BRICS (Brazil, Russia, India, China, and South Africa) nations would pool funds for the purpose of bolstering eurozone bailout activities. Meyer-Landrut also believed that a resolution of the Greek crisis will require greater private-sector involvement than was first thought, and that the eurozone must look beyond the technical aspects of a deal and focus instead on the actual progress that Greece will have to make, as regards both legislation and implementation. It was his further opinion that a full-term team will have to be ensconced in Athens for the purpose of monitoring the situation.


2nd Party British

German leadership

Z-3/OO/549834-11, 211414Z.

All this distrust with Greece and all this crap is that none of the € members especially Germany want Greece or indeed any € member to have it debt federalised. It is not in any EU treaty to recognise Sovereign debt as ECB debt. Than we get into the argument of having a compatible currency zone with loose monetary control. It is the French above all others that are interested in having less control of budgets in Athens, Berlin, Helsinki, Dublin & Rome due to the inherent complexity of having a currency with different values in each member state. Personally each state should retain budget control but that as it exists in its present order their is a common position on core fundamental concerns.

Update

An agreement has been reached between Tsipras and the EuroGroup to begin negotiations of bailout #3 through the ESM.

This can only begin once credible legislation has been passed in the Greek Parliament to instigate the reforms that have been asked for (polite way of putting it) several times over the past years.

Once this happens (by Wednesday) then European Parliaments will also need to pass the proposal to extend ESM once again.

Après Oxi - we seem to have been left with the following options

• the EZ leaders were absolutely stonefaced negotiators who refused to give an inch from day 1
• The deals offered from day 1 to Greece have been the best available
• The truth is somewhere in the middle of the above.

The damage done to Greece pre Oxi and since will require a whole new set of metrics to quantify and compare. Her path out of recession has become even more convoluted.

glacial_pace71

There's a hashtag 'this is a coup' already in circulation from some of the more alarmist elements online.

Alas having Greek assets sequestered etc naturally lends itself to comparisons with the Wehrmacht carting off the contents of the Greek central bank, i.e. the optics are bad even if the Greeks knew there'd be some form of commitment to placing assets at arms-length as part of the process. (Ok, not quite NAMA, but you'd get a feel for the potential for cronyism and insider deals if the privatization programme for ports, airports etc was allowed to be solely within the gift of the Greek government, bearing in mind of course that after the likely elections it could be a coalition based on the old New Democracy and PASOK clientelist cliques who'll be back in power).

Even viewing the press briefings leaves one with the impression of a negotiated surrender being reported:

http://ec.europa.eu/avservices/ebs/schedule.cfm

On the other hand, it's not quite a few pieces of silver: Tspiras has just gotten Greece to safety and taken a hit for the eurozone (re indivisibility etc) that should reduce the risk of any similar crises in the short term.

(Long term there's still the problem of 28 governments, each with their own national mandates, at different stages of their own economic and political/electoral cycles, making decisions on fiscal policy re budgets whilst monetary policy under the ECB can be going in a different direction).

I came across this interesting analysis of the Greek crisis by Jeffrey Sachs

https://www.project-syndicate.org/commentary/greek-crisis-economic-governance-failures-by-jeffrey-d-sachs-2015-07

If this mismanagement continues, not only Greece but also European unity will be fatally undermined. To save both Greece and Europe, the new bailout package must include two big things not yet agreed.

First, Greece’s banks must be reopened without delay. The ECB’s decision last week to withhold credit to the country’s banking system, and thereby to shutter the banks, was both inept and catastrophic. That decision, forced by the ECB’s highly politicized Executive Board, will be studied – and scorned – by historians for years to come. By closing the Greek banks, the ECB effectively shut down the entire economy (no economy above subsistence level, after all, can survive without a payments system). The ECB must reverse its decision immediately, because otherwise the banks themselves would very soon become unsalvageable.

Second, deep debt relief must be part of the deal. The refusal of the rest of Europe, and especially Germany, to acknowledge Greece’s massive debt overhang has been the big lie of this crisis. Everyone has known the truth – that Greece can never service its current debt obligations in full – but nobody involved in the negotiations would say it. Greek officials have repeatedly tried to discuss the need to restructure the debt by slashing interest rates, extending maturities, and perhaps cutting the face value of the debt as well. Yet every attempt by Greece even to raise the issue was brutally rebuffed by its counterparties.

The fact that the Greek debt overhang was acknowledged only after negotiations had collapsed exposes the deep systemic failures that have brought Greece and Europe to this point. We see a European system of crisis management that is fraught with ineptitude, extreme politicization, gamesmanship, and unprofessionalism. I certainly do not mean to excuse Greek clientelism, corruption, and mismanagement as ultimate causes of the country’s predicament. Yet the failure of the European institutions is more alarming. Unless the EU can now save Greece, it will not be able to save itself.

Much of this analysis is well-worn, and I would say it is broadly accepted, except for in a fringe part of Europe from the Gulf of Finland down to Lower Bavaria.

However what is more interesting in Sachs' criticism is his focus on weak leadership. From the EU's initial insistence on the IMF babysitting their handling of the Greek solution, to its pathetic midnight calls to the Institute of International Finance asking for help in burning its members, one thing is clear: the Eurozone's biggest weakness is not its weak monetary or fiscal infrastructure, but its lack of political authority.

Nobody knows what they are doing. The Government of the Eurozone is made up of 19 political strangers who usually only see each other once a month in ordinary times. They have no proper Central Bank (and to the extent they do, it's no use to them) they have no Euro Treasury, and they have no common political vision. They don't even have a headquarters, they squat in an annex building of the Council of the EU.

Well I suppose we can't grumble. This is what you get when two historians design your currency.

Remarkable, isn't it?

take everything

molloyjh wrote: »

Of course something has been solved. Greece have now accepted that severe austerity is required. This fight against the EU has left the country in greater debt, crippled its financial industry, made life near unbearable for its citizens and shown them up on the world stage. There has been no up side for Greece from this. Getting them to knock this stupidity on the head is an achievement. Albeit one that should never have been required.

Still though a democratic mandate has been trampled over and simply ignored.
As Fintan O' Toole said on Matt Cooper today, Europe is the worse for this.
Shown to be a union based on coercion more than anything else in this case at least.

BoJack Horseman

take everything wrote: »

Shown to be a union based on coercion more than anything else in this case at least.

And after all that coercion, we still succumbed and gave them their €83bn.

Workers are not happy. Things could get nasty. http://www.dailymail.co.uk/news/article-3159710/Greek-civil-service-workers-announce-24-hour-strike-government-gives-creditors-insider-reveals-leaders-furious-rows-says-Tsipras-crucified.html

Uncle Ben

BoJack Horseman wrote: »

And after all that coercion, we still succumbed and gave them their €83bn.

There's not a hope of that getting repaid. We'll be back here in Deja Vu land within 12 months.

Jelle1880

http://www.telegraph.co.uk/finance/economics/11737286/EU-demands-Britain-joins-Greek-rescue-fund.html

It's like they're wanting the UK to vote in favour of leaving the EU...

BoatMad

take everything wrote: »

Still though a democratic mandate has been trampled over and simply ignored.
As Fintan O' Toole said on Matt Cooper today, Europe is the worse for this.
Shown to be a union based on coercion more than anything else in this case at least.

Greece retains the option of walking away. However it's seems remarkable that it doesn't want too

Explain how a democratic mandate was therefore " trampled over"

The Greeks voted no to a deal that wasn't then on the table. The referendum was a nonsense.

Grandpa Hassan

Jelle1880 wrote: »

http://www.telegraph.co.uk/finance/economics/11737286/EU-demands-Britain-joins-Greek-rescue-fund.html

It's like they're wanting the UK to vote in favour of leaving the EU...

This is all over the front pages of the uk press this morning. Shows the respect that EU leaders give to previously agreed deals. Just rip them up when it suits them. Another thing for the out campaign to seize on. Why should the UK pay a single cent toward an EZ problem? I hope Osborne stands his ground

Phoebas

take everything wrote: »

Still though a democratic mandate has been trampled over and simply ignored.

I presume you're referring to Tspiras accepting a deal worse than the deal that the Greek people rejected a few days ago.

molloyjh

take everything wrote: »

Still though a democratic mandate has been trampled over and simply ignored.
As Fintan O' Toole said on Matt Cooper today, Europe is the worse for this.
Shown to be a union based on coercion more than anything else in this case at least.

A democratic decision taken by people who democratically elected successive Governments who bankrupted their country and then proceeded 6 months ago to elect another Government who have done the same thing in record time. I'm sorry if I don't think that ignoring what they say is a bad thing. They have consistently shown a total inability to manage themselves.

Also the democratic decision was one made by the majority of Greeks, not the majority of Europeans. The whole of the EU should not be held hostage by decisions taken by people who seem to be intent on running their country into the ground.

This idea that there is some sort of bullying going on is nothing short of hilarious. What kind of bully forks out €270bn in loans and puts up with the BS the Greeks have thrown at them? At the end of the day Greece has serious economic problems that are rooted in how they do business. That has to change. The fact that it is taking the EU to force it on them is far more of a reflection of the Greeks irresponsibility than it is of anything else.

molloyjh

BoJack Horseman wrote: »

And after all that coercion, we still succumbed and gave them their €83bn.

Exactly. Terrible people aren't we!?

There's a pretty stark disassembling of the #ThisIsACoup twitterati in the Telegraph today.

Not sure that the concept of Democracy is explored quite enough in the article, but it's something that I keep reading over and over again as being more powerful than it actually is.

At the heart of it, Democracy is simply a way of making choices. Greek democracy is independent of the external parties here.

There is nothing 'undemocratic' whatsoever about those offering terms of a loan to Greece to offer any terms whatsoever that they wish to. There are other places Greece can try and get loans from, the markets, the Fed, China, Russia etc. I wonder what kind of terms they'd get from any of those?

Greece has a choice regarding these loan offers. Accept the terms in order to get cash, as onerous and ****ty as they appear, or try and do it another way. Democracy will allow them to make that choice, their representative Government leader (Tsipras) appears to have made his decision (accept the terms) and is now asking the Democratically elected Representative Government to also make that decision.

Democracy does not allow you to compel others (outside of that decision making group) to do anything for you. We can't democratically decide for the UK to 'hand over' the 6 counties, no more so than Greece can democratically decide the terms of the loan offer should be improved. There's an alarming persistence of people using the term 'Democratic' as some form of trump card, without actually considering what it is that they are saying.

nice_guy80

What if Greece takes even more money from the ECB, IMF and EU and then defaults?