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Kimon
07-05-2015, 02:53 PM
Thoughts on today's interesting vote? Certainly seems, from an outsider's perspective, that they are either being incredibly naive, and hence committing economic suicide, or are taking begging tips from the gypsies.

http://www.bbc.com/news/world-europe-33403665

Terez
07-05-2015, 03:46 PM
From what I understand, Grexit is not the goal of the Greeks. It can only be forced on them, and Merkel for one is opposed to doing that because it would tarnish her legacy.

Kimon
07-05-2015, 04:25 PM
From what I understand, Grexit is not the goal of the Greeks. It can only be forced on them, and Merkel for one is opposed to doing that because it would tarnish her legacy.

Syriza are clowns. Would you want to negotiate with and continue giving hand-outs to these schmucks?

http://www.bbc.com/news/world-europe-33393759

As for Merkel, it sounds increasingly like Germany is fed up with trying to reason with Syriza. Here is the reaction of their Deputy Chancellor, Gabriel...

http://news.sky.com/story/1513796/germany-greeks-have-torn-down-last-bridges

Terez
07-05-2015, 06:30 PM
Syriza are clowns. Would you want to negotiate with and continue giving hand-outs to these schmucks?
You mean handouts to the banks? Because the Greeks citizens for the most part haven't benefitted and don't stand to benefit much even if they get bailed out. There are a number of people who have already made out and made off with Greece's equity. The banks that lent them billions without any consideration of their actual financial fundamentals because they were relying on the Eurozone to guarantee payment—those banks should share in some of the responsibility for the mess they helped create. Can you really blame the Greek people for wanting to play the same game of chicken? Default has consequences for them too.

Kimon
07-05-2015, 06:56 PM
You mean handouts to the banks? Because the Greeks citizens for the most part haven't benefitted and don't stand to benefit much even if they get bailed out. There are a number of people who have already made out and made off with Greece's equity. The banks that lent them billions without any consideration of their actual financial fundamentals because they were relying on the Eurozone to guarantee payment—those banks should share in some of the responsibility for the mess they helped create. Can you really blame the Greek people for wanting to play the same game of chicken? Default has consequences for them too.

Much of Greece's problem stems from a systemic and longstanding unwillingness to pay taxes throughout the population, which is bad enough, but when coupled with expensive government programs it creates this type of disaster. Greece's problem is that they are intent on spending well beyond what they bring in. I'm not usually a proponent of austerity, but what the Greeks have done, and what Syriza wishes to continue doing is insanely irresponsible.

http://www.businessinsider.com/this-is-the-real-reason-greece-has-a-massive-tax-evasion-problem-2015-2

This isn't a new problem, nor is it one that only occurs in Greece. Heck, this was happening in ancient Athens to avoid the leitourgia, and yes happens here to, but not on this scale. At some point you have to stop enabling bad behavior.

Terez
07-05-2015, 07:04 PM
Much of Greece's problem stems from a systemic and longstanding unwillingness to pay taxes throughout the population, which is bad enough, but when coupled with expensive government programs it creates this type of disaster.
Yes, everyone is aware of this, but this does not mean that banks should not share any of the responsibility when they pretty much willfully put the Euro in this position with irresponsible lending of GDP-sized chunks of cash to a country with such well-known weak fundamentals. Again, default has consequences for Greece too. It's not like they won't be taking their share of the pain.

GonzoTheGreat
07-06-2015, 04:50 AM
Much of Greece's problem stems from a systemic and longstanding unwillingness to pay taxes throughout the population, which is bad enough, but when coupled with expensive government programs it creates this type of disaster.
That was all very well known at the time that the other Euro countries decided to let Greece join too. There is no reason at all to pretend this is in any way a surprise or a new situation. The rest of the Euro zone implicitly agreed to put up with it; the whining that they hadn't meant it is not convincing.

Davian93
07-06-2015, 11:10 AM
Is it racist to say I'd never trust a Greek with anything involving money?

Nazbaque
07-06-2015, 12:09 PM
Is it racist to say I'd never trust a Greek with anything involving money?

Depends. Firstly do Greeks count as a race or is it merely nationality? If they aren't a race it would be bigoted but not racist specifically. Secondly are there people you do trust with things involving money? If not then you are paranoid but not racist or even bigoted (about this anyway)

Kimon
07-06-2015, 12:11 PM
Is it racist to say I'd never trust a Greek with anything involving money?

It might seem insignificant, but the fact that Greece's finance minister, Varoufakis, thought that it was acceptable to attend negotiations not just without a tie, but without even tucking in his shirt, makes it impossible to take the man seriously. Which perhaps explains why he resigned today. I imagine it won't be long before Tsipras follows him.

http://www.bbc.com/news/world-europe-33406001

Here's a nice synopsis of the clown's antics:

http://europe.newsweek.com/greek-debt-crisis-varoufakiss-best-moments-329843

GonzoTheGreat
07-06-2015, 12:25 PM
Is it racist to say I'd never trust a Greek with anything involving money?
Let me see.
First, they showed that they weren't to be trusted when they gave gifts.
Then they invented money.
Next they gave that idea to others (possibly because their lawyers didn't think they could enforce a patent in Persia anyway).
Then they spread the story containing the phrase "beware of Greeks bearing gifts".

Why shouldn't you trust them with anything involving money?

Kimon
07-06-2015, 12:36 PM
Let me see.
First, they showed that they weren't to be trusted when they gave gifts.
Then they invented money.
Next they gave that idea to others (possibly because their lawyers didn't think they could enforce a patent in Persia anyway).
Then they spread the story containing the phrase "beware of Greeks bearing gifts".

Why shouldn't you trust them with anything involving money?

It was their neighbors, the Lydians, who first invented coins. As for that phrase, it's from Vergil, not Homer. Not sure what it has to do with these circumstances anyway, as it is Germany and the EU that is bringing gifts, not the Greeks. One would have hoped that the Greeks would remember that and voted more prudently yesterday.

Davian93
07-06-2015, 01:19 PM
We were looking at maybe doing a vacation in Greece (on Santorini) next summer but now we're looking elsewhere due to the massive instability there.

Isabel
07-06-2015, 01:36 PM
next summer is still a long time away. things would be better. So just keep looking.

Davian93
07-06-2015, 01:54 PM
next summer is still a long time away. things would be better. So just keep looking.

We're not gonna commit to any trip till Dec/Jan at the earliest so we'll see. France or Ireland both look nice and a bit more stable. As does Iceland...the 3 other strong options.

Kimon
07-06-2015, 02:16 PM
We were looking at maybe doing a vacation in Greece (on Santorini) next summer but now we're looking elsewhere due to the massive instability there.

A tour of the great archaeological sites of Greece (Athenian Acropolis, Mycenae, Delphi, Olympia) was the best vacation I've ever had, but yeah, I'd hold off on going back until there is less worry about what their currency situation will be like. If they return to the drachma, how stable will it be? Will this instability spread to the other vulnerable economies in the Eurozone? I will be going, for work, back to Italy again next summer, hopefully things have calmed by then, and without metastasis...

Davian93
07-06-2015, 02:23 PM
A tour of the great archaeological sites of Greece (Athenian Acropolis, Mycenae, Delphi, Olympia) was the best vacation I've ever had, but yeah, I'd hold off on going back until there is less worry about what their currency situation will be like. If they return to the drachma, how stable will it be? Will this instability spread to the other vulnerable economies in the Eurozone? I will be going, for work, back to Italy again next summer, hopefully things have calmed by then, and without metastasis...

Is it selfish to hope the Euro takes another hit so the USD is even stronger against it? It really sucked being in France last summer when it was 1.3 Euro to 1.0 USD.

Kimon
07-06-2015, 02:33 PM
Is it selfish to hope the Euro takes another hit so the USD is even stronger against it? It really sucked being in France last summer when it was 1.3 Euro to 1.0 USD.

I'm apparently cheap. I still have nearly half the euros leftover from my last trip to Italy. The euro has taken a bit of a hit because of Greece. It's now at 1 to 1.11. By contrast, the pound is 1 to 1.56.

Davian93
07-06-2015, 02:37 PM
I'm apparently cheap. I still have nearly half the euros leftover from my last trip to Italy. The euro has taken a bit of a hit because of Greece. It's now at 1 to 1.11. By contrast, the pound is 1 to 1.56.

I'm going to Canada for a couple weeks of vacation starting next weekend...its great to see the USD kicking arse against the CAD once again. Back up to 1.26 CAN per 1.00 USD. The dark days of the Loonie being more valuable to the Dollar are well behind us thankfully.

Terez
07-06-2015, 04:24 PM
Is it selfish to hope the Euro takes another hit so the USD is even stronger against it? It really sucked being in France last summer when it was 1.3 Euro to 1.0 USD.
That's not bad, really...not as bad as it has been in the near past.

Davian93
07-06-2015, 07:11 PM
That's not bad, really...not as bad as it has been in the near past.

It was actually 1.36 (just looked it up). But yeah, I agree it's been worse. I remember the good old days back in 2002 when it was .75 Euro to 1.00 USD. That was pretty damned sweet for an American living in Europe but getting paid in USD.

Ireland three years ago had a pretty rough exchange rate for EUR to USD too. At least going to PEI next week will be fun given that super awesome exchange rate. USD will go a long way up there.

Nazbaque
07-06-2015, 07:21 PM
Hmmm.. What's the current exhange rate of the American ego?

Davian93
07-06-2015, 08:40 PM
Hmmm.. What's the current exhange rate of the American ego?

LOL...after getting hammered on the exchange rate for a decade, I'm just happy to finally have it going my way.

Khoram
07-07-2015, 01:03 AM
I'm going to Canada for a couple weeks of vacation starting next weekend...its great to see the USD kicking arse against the CAD once again. Back up to 1.26 CAN per 1.00 USD. The dark days of the Loonie being more valuable to the Dollar are well behind us thankfully.

Jerk. :p

When I bought the euros for my trip to France, the exchange rate was between 1.42 and 1.44 euros to 1 CAD.

And I hope you're coming up to visit us weird folk in Quebec. ;)

ETA: Lol never mind. Just saw your post about PEI.

Ozymandias
07-07-2015, 10:10 AM
Yes, everyone is aware of this, but this does not mean that banks should not share any of the responsibility when they pretty much willfully put the Euro in this position with irresponsible lending of GDP-sized chunks of cash to a country with such well-known weak fundamentals. Again, default has consequences for Greece too. It's not like they won't be taking their share of the pain.

See, I don't think this is a great representation of the situation.

The ECB and IMF are different than your normal commercial lenders. They had politically motivated reasons to lend. Beyond that, holders of Greek short term debt (and long term muni bonds) are not exclusively banks; there is a very strong case to be made that the bailouts saved the investments of millions of individual investors, not to mention large funds holding pension money, etc. And the accounting shenanigans the Greeks engaged in, both leading up to their entry into the Eurozone and in the aftermath of joining, have significantly hurt their ability to borrow since, which hasn't helped.

At the end of the day, if Greece defaults and exits, then there is no bailout for the banks that lent to them (or if there is, it won't have anything to do with the emergency IMF and ECB loans). So its a moot point. The emergency loans and austerity are not "bailouts" because the primary beneficiary is unquestionably the Greek government, and presumably, the Greek people. Their ability to access international capital markets in the future will be severely compromised. This isn't Russia, where strong oil/natural has prices can restore investor confidence in a few years.

The primary problem with the Greeks, as pointed out, is their inability to collect taxes. But that is a cultural issue and one which will take many years to fully rectify. Hard not to take the position of "let them reap what they've sown". Average Greeks didn't want to pay taxes for all these years, and now the curtain is pulled back and they can finally enjoy a stripped down, underfunded government for real.

Terez
07-07-2015, 01:50 PM
See, I don't think this is a great representation of the situation.

The ECB and IMF are different than your normal commercial lenders. They had politically motivated reasons to lend. Beyond that, holders of Greek short term debt (and long term muni bonds) are not exclusively banks; there is a very strong case to be made that the bailouts saved the investments of millions of individual investors, not to mention large funds holding pension money, etc.
The ECB and IMF would never have stepped in if Greece didn't already owe fuckloads of money to commercial lenders. As for the bondholders, they took a risk when they invested, and they should have known what that risk was. If they didn't, then perhaps there's a fraud case against the banks selling the bonds. What you're suggesting is that these banks and individual investors should be able to socialize their losses.

Sarevok
07-09-2015, 02:47 PM
The ECB and IMF would never have stepped in if Greece didn't already owe fuckloads of money to commercial lenders. As for the bondholders, they took a risk when they invested, and they should have known what that risk was. If they didn't, then perhaps there's a fraud case against the banks selling the bonds. What you're suggesting is that these banks and individual investors should be able to socialize their losses.

The problem with these things is that the people doing the investing in the bonds aren't the only ones hit if Greece goes under. If, say, the bank you have your money stored at invested a bunch in Greek bonds, and Greece falls, they might take the bank with them, leading do regular people losing their savings...

Is it selfish to hope the Euro takes another hit so the USD is even stronger against it? It really sucked being in France last summer when it was 1.3 Euro to 1.0 USD.
At least wait until after next year's JordanCon, please. Last year was suddenly 30% more expensive than anticipated... :eek:

Terez
07-09-2015, 03:29 PM
The problem with these things is that the people doing the investing in the bonds aren't the only ones hit if Greece goes under. If, say, the bank you have your money stored at invested a bunch in Greek bonds, and Greece falls, they might take the bank with them, leading do regular people losing their savings...
Yes, that is a problem, but it is still a problem for which said banks have a great deal of responsibility. If the Eurozone is going to have one currency for diverse national budgets then they have to have some laws in place which prevent this kind of irresponsible inflation of lending to countries with weak fundamentals. Right now their solution seems to be more lending and more debt for Greece, plus austerity for the Greek people, all so that the bondholders can get 100% of their irresponsibly invested money. Any responsible package for Greece would entail a great amount of forced debt forgiveness—not enough for these banks to go under, but enough so that they take their fair share of the pain. And if people lose on their savings then they need to take this opportunity to demand responsible banking regulations in order to prevent future such crises for the Eurozone.

Kimon
07-09-2015, 04:35 PM
Yes, that is a problem, but it is still a problem for which said banks have a great deal of responsibility. If the Eurozone is going to have one currency for diverse national budgets then they have to have some laws in place which prevent this kind of irresponsible inflation of lending to countries with weak fundamentals. Right now their solution seems to be more lending and more debt for Greece, plus austerity for the Greek people, all so that the bondholders can get 100% of their irresponsibly invested money. Any responsible package for Greece would entail a great amount of forced debt forgiveness—not enough for these banks to go under, but enough so that they take their fair share of the pain. And if people lose on their savings then they need to take this opportunity to demand responsible banking regulations in order to prevent future such crises for the Eurozone.

I feel somewhat dirty defending banks, but in this case, it seems unreasonable not to recognize that the lenders are not the problem. If the Greeks won't pay their taxes, they simply cannot afford such expensive govt programs. Syriza, while technically a leftist, essentially Marxist party, really reminds me instead of the Tea Party. Which perhaps explains why I hold them in such contempt. Both refuse to pay taxes, both are led by ignorant populist demagogues, both have an inexplicable love for rude and uncompromising shills, and furthermore, perhaps out of a contempt (at least in America) for etiquette and education, want their politicians to dress like schlubs rather than professionals. What is happening in Greece strikes me as very similar to what Brownback has done to Kansas, and Jindal has done to Louisiana. Voters need to be made to understand the consequences for voting in these types of a**holes.

Terez
07-09-2015, 07:11 PM
I feel somewhat dirty defending banks, but in this case, it seems unreasonable not to recognize that the lenders are not the problem. If the Greeks won't pay their taxes, they simply cannot afford such expensive govt programs.
Why can't you recognize that both are responsible? You certainly haven't made any argument that exculpates the banks who would lend them the money knowing it could never be repaid, all because they believed that the Eurozone would bail them out if it came to default. It's very similar to the massive, irresponsible subprime industry that led to the 2008 crash.

Kimon
07-09-2015, 07:58 PM
Why can't you recognize that both are responsible? You certainly haven't made any argument that exculpates the banks who would lend them the money knowing it could never be repaid, all because they believed that the Eurozone would bail them out if it came to default. It's very similar to the massive, irresponsible subprime industry that led to the 2008 crash.

This, if it happens, will be the third bailout. The first occurred in May of 2010, and followed a year of self-imposed austerity measures by a more responsible, but still essentially socialist Greek government. That first infusion wasn't enough, so a second was made in 2012, again done specifically to keep Greece from defaulting, which would have led to a complete collapse of their economy and an inevitable exit from the Euro and Eurozone. Throughout 2013 and 14 more austerity measures were passed, again trying to cut back on the numbers of superfluous (and let's be blunt, many of them in Greece are exactly that) civil servants, and on the untenable expenditures in terms of civil servant salaries and pensions. Pensions are a stickier point, as those are obligations that should be met, even if the government clearly can't afford them due to their systemic problems with tax evasion. The former however can be dealt with, even if just as unpopular. Just how unpopular this all was has been abundantly clear, as the austerity created a situation in which demagogues, playing upon that anger, were able to rise to power, and we have Syriza elected into power in May of 2014. It is only those bailouts that has kept Greece from drowning, and without some combination of austerity and crackdown on the corruption and tax evasion, they will drown. It would be irresponsible for these bailouts not to come with strings attached. The Greeks must rectify the underlying causes or else no amount of short-term money will change their long-term outlook. That is unpopular, but it is also reality.

What Syriza truly wants is more difficult to determine. I'm honestly unsure whether Syriza truly wishes exit from the Euro so as to allow a devalued drachma and ability to continue with untenable govt spending, or if they really think they can extort concessions from France and Germany. And it is extortion. Germany seems adamant this time that they will again offer more money, and they likely will agree to restructure the debt, but not to write any of it off (which is clearly what Tsipras wants). The French seem more willing to consider even this, which they shouldn't, but it is clear that none trust Syriza, nor should they.

Terez
07-09-2015, 11:42 PM
This, if it happens, will be the third bailout.
There is a difference between bailout and debt forgiveness. The bailout has so far been in the form of more loans. So you take a country that is overburdened by debt already and give it more loans to fix the problem, adding on more debt, and expect that to work? We've seen this happen so many times, usually in the developing world where hardly anyone is paying attention. It doesn't work. Poland has probably come the closest of all the countries now considered part of the first world. From the NYT:

http://www.nytimes.com/2015/07/10/world/europe/greek-debt-talks.html?_r=0

Donald Tusk, a former prime minister of Poland and the president of the European Council, said on Twitter that any “realistic proposal from Athens needs to be matched by realistic proposal from creditors on debt sustainability to create win-win situation.”
That's just simple reality, and I don't see why you are so fixated on punishing the Greeks that you can't see the other half of the equation.

I am guessing you have not read Klein (http://www.amazon.com/The-Shock-Doctrine-Disaster-Capitalism/dp/0312427999)? There is a reason why Greece is a breeding ground for radical politics now. This interview (http://www.crisismirror.info/library/articles/is-greece-in-shock-naomi-klein-tells-enetenglish-how-the-shock-doctrine-relates-to-greece/) is from 2 years ago.

Kimon
07-10-2015, 12:46 AM
There is a difference between bailout and debt forgiveness. The bailout has so far been in the form of more loans. So you take a country that is overburdened by debt already and give it more loans to fix the problem, adding on more debt, and expect that to work? We've seen this happen so many times, usually in the developing world where hardly anyone is paying attention. It doesn't work. Poland has probably come the closest of all the countries now considered part of the first world. From the NYT:

http://www.nytimes.com/2015/07/10/world/europe/greek-debt-talks.html?_r=0


That's just simple reality, and I don't see why you are so fixated on punishing the Greeks that you can't see the other half of the equation.

I am guessing you have not read Klein (http://www.amazon.com/The-Shock-Doctrine-Disaster-Capitalism/dp/0312427999)? There is a reason why Greece is a breeding ground for radical politics now. This interview (http://www.crisismirror.info/library/articles/is-greece-in-shock-naomi-klein-tells-enetenglish-how-the-shock-doctrine-relates-to-greece/) is from 2 years ago.

According to the BBC, it appears that the Greeks have finally caved on a couple of the key sticking points:

http://www.bbc.com/news/world-europe-33472699

tax rise on shipping companies and scrapping tax discounts for islands
unifying VAT rates at standard 23%, including restaurants and catering
phasing out solidarity grant for pensioners by 2019
€300m ($332m; £216m) defence spending cuts by 2016

This is what Tsipras is demanding in exchange:

He is asking for far more in return than was on offer last month, our correspondent adds. Greece is reportedly seeking €53.5bn as part of a new bailout package and restructuring of its huge debt burden.

That restructuring is still vague. From the NYT article you linked, here is what they are reporting concerning Merkel:

Ms. Merkel, speaking later in Sarajevo, reiterated her opposition to actually writing off some of Greece’s debt, though she was less definitive about steps like reducing interest rates or extending the payment period as ways of helping Greece manage its indebtedness.

Germany has taken an increasingly hard line toward Greece since the nation voted no on Sunday to an earlier bailout program in a referendum that sent political shivers across Europe. In the wake of the chaos sparked by the vote, Ms. Merkel flew Monday to Paris to join President François Hollande of France to discuss what to do next with Greece.

The situation has put Mrs. Merkel into the toughest position of her career. She has been forced to balance an angry German public, which sees no reason to give Greece billions of additional bailout money or to write down its debt, against the danger of a Greek exit from the eurozone.

Restructuring can include curtailing, but the Germans clearly are reluctant to agree to that, and any such call might be impossible to pass through the Bundestag. On the other hand, they would lose more, if through their disgust with Syriza, if they completely refuse to lend any more funds and the Greeks default and leave the euro. Hence my earlier comments about Syriza using extortion as leverage in these negotiations. The question remains however, can the underlying problems that have caused this mess truly be fixed, as if they cannot, this is just more money being thrown down the drain. You'll note however, that in the past, this degree of brinkmanship was not present, and there was greater willingness to step in with more stabilizing capital by the other European, mostly Germany, powers. But that was before Syriza, before that dick Varoufakis spent months sabotaging any goodwill and clemency amongst those to whom he was sent to seek alms.

GonzoTheGreat
07-10-2015, 03:44 AM
Yes, that is a problem, but it is still a problem for which said banks have a great deal of responsibility. If the Eurozone is going to have one currency for diverse national budgets then they have to have some laws in place which prevent this kind of irresponsible inflation of lending to countries with weak fundamentals.Why do you present this as if it is new?
Surely this was already blatantly obvious before the Euro was introduced. So either our politicians knowingly chose to take the risk or they deliberately set it up so that these new rules and further integration had to be implemented in a hurry when things did go predictably wrong.

Either way, I would say that it is something which should be blamed on those who decided to switch to the Euro, not on the Greek citizens.

I feel somewhat dirty defending banks, but in this case, it seems unreasonable not to recognize that the lenders are not the problem. If the Greeks won't pay their taxes, they simply cannot afford such expensive govt programs.Well, duh.
Why do you ignore the fact that those banks knew this already before they chose to lend the money to Greece in the first place? Greek tax evasion is definitely not a new thing, after all.
The bankers expected to get nice bonuses out of it (which they got) and they expected to be bailed out by tax payers when things went wrong (which is happening right now).

I don't understand why those bankers aren't prosecuted for running a Ponzi scheme.

Ozymandias
07-10-2015, 03:08 PM
Well, duh.
Why do you ignore the fact that those banks knew this already before they chose to lend the money to Greece in the first place? Greek tax evasion is definitely not a new thing, after all.
The bankers expected to get nice bonuses out of it (which they got) and they expected to be bailed out by tax payers when things went wrong (which is happening right now).

I don't understand why those bankers aren't prosecuted for running a Ponzi scheme.

I hate to ask... but do you actually understand how international capital markets work? This isn't like getting a mortgage. A Greek Treasury official doesn't just walk into the local Bank of Greece or whatever and ask for a couple billion dollars and show his (fraudulent) financial statements as proof of ability to repay. I am sure some bankers made money underwriting and marketing these deals, but its tough to say they were defrauding the Greek government or churning bonds or anything. They helped the Greeks get to market, that is about it. Any true trader who is holding Greek government debt on his/her books is hedging against a haircut or complete loss and isn't sweating this quite as much. It really is not analogous to 2008.


Furthermore, most of the investors in Greek debt aren't "bankers." I understand that its easy to blame "banks" for this kind of situation, but it isn't the case. Most of their debt is held by other euro-zone governments, the ECB, or the IMF. Like.. 17% or so is held by private investors, many of which will be individual Greeks and pension funds.

Terez
07-10-2015, 03:29 PM
I hate to ask... but do you actually understand how international capital markets work? This isn't like getting a mortgage. A Greek Treasury official doesn't just walk into the local Bank of Greece or whatever and ask for a couple billion dollars and show his (fraudulent) financial statements as proof of ability to repay. I am sure some bankers made money underwriting and marketing these deals, but its tough to say they were defrauding the Greek government or churning bonds or anything.
Defrauding the Greek government, not really. Defrauding their investors, possibly. Playing brinksmanship with the Eurozone, definitely.

Furthermore, most of the investors in Greek debt aren't "bankers." I understand that its easy to blame "banks" for this kind of situation, but it isn't the case. Most of their debt is held by other euro-zone governments, the ECB, or the IMF.
That debt represents funds that went to servicing commercial debt.

Ozymandias
07-10-2015, 05:00 PM
Defrauding the Greek government, not really. Defrauding their investors, possibly. Playing brinksmanship with the Eurozone, definitely.

Please provide some evidence of this. I worked in the municipal bond industry (domestic, though) for a while. I can tell you now that whoever is helping Greece float their debt would have a very difficult time defrauding anyone.

And who exactly are their "investors". Their shareholders who are invested in the bank? The people buying Greek bonds? You've already made the claim that most people are aware that Greece has problems, so that's a tough one. As for playing brinksmanship with the eurozone... that would be the heads of the state, and the fully-politicized IMF and ECB. It just doesn't make sense.

Where, exactly, in the process are "bankers" in the sense that you all mean it (as in, Wall Street-esque, unless I am badly mistaken) defrauding anyone, or even really getting involved? If a couple hedge funds had made huge bets on Greece not defaulting, and were now applying political and PR pressure for a bailout of Greek bondholders, I would agree entirely. But that isn't happening.

The Eurozone brought in an economically-backwards country (which may have defrauded them as to their true economic status). They proceeded, as with all other peripheral members of the euro, to set policies that were highly advantageous to the central countries (mainly France and Germany) and prevent their weaker neighbors from having a say in policy which might have saved them from bankruptcy (e.g. printing more money). In order to preserve the state of affairs the governments themselves loaned Greece a lot of money by taking on relatively large amounts of Greek debt, and forcing their semi-political banking entities to do the same. Now, those countries stand to lose a great deal of money if Greece defaults, not to mention the far more important and scary precedent it would set for Italy and Spain.

"Bankers" don't come into this equation anywhere, at least not as a cause of any of the problems (obviously banks and bankers are everyone and endemic in the system of international finance). The entire drama/farce has been played out between heads of state or cabinet ministries, and to a lesser degree to institutions like the IMF and ECB, which can reasonably be described as banks but cannot be reasonably described as independent actors or profit-oriented institutions.


That debt represents funds that went to servicing commercial debt.

Hardly. Wikipedia tells me that non-Greek European banks held about $46b (don't know the euro symbol on my computer) of Greek debt in 2010. The bailouts have come out to a very very great deal more than that, well over $300b euro. Almost all that privately held debt (which includes both banks and mom and pops) was bought up or paid down initially. The rest is being used to service what is now government held debt.

Furthermore, that money was (ostensibly) not used for a bailout for the French and German banks, but because allowing Greece to default would have made it impossible for them to borrow. It is obviously impossible to believe that Merkel and Sarkozy didn't have this in the back of their mind when negotiating, but the driver was not a bailout for banks, but a bailout for the Greek government, which had been borrowing irresponsibly for a very long time.

The only way in which you could maybe indict "bankers" is those hedge funds and currency traders who took advantage of the volatility surrounding Greek sovereigns in 2010. I think Papandreou made the false equivalence of saying something like "you don't let people take out insurance on their neighbors house and then light it on fire," or something to that effect.

The more appropriate analogy would have been; if your neighbor is an acknowledged pyromaniac, can you bet that he burns his house down?

And also, I suppose, on the grounds that Goldman shouldn't have helped Greece hide its true debt levels through cross currency swaps (which are and were perfectly legal), but that is sort of splitting hairs. And furthermore, if a client wants to do something inadvisable but legal, as long as the bank is properly informing their client of the risks and ramifications, I don't see how you hold the advisor and not the client responsible.

Kimon
07-11-2015, 10:51 AM
The Greek Parliament authorized the new deal, albeit with some opposition from Syriza members who apparently would have preferred to watch their world burn. Perhaps one must give Tsipras some credit here. Perhaps he recognized that the charade of that referendum was necessary, that his country, and his party, had to face the reality of imminent collapse before they would accept what they vociferously rejected just a week ago.

http://www.bbc.com/news/world-europe-33492387

"Ultimately the referendum won time for the governing party", says Nikos Dendias, a former minister with the opposition centre-right New Democracy party.
"Remember Syriza is an ex-hardline splinter group. Ten days ago, Tsipras wouldn't have been able to get the agreement through his own party. But with the delay, it made a huge difference."
Alexis Tsipras is in an impossible bind: pushed to an agreement by the creditors, or face leaving the euro, but pulled away from one by his own voters, who cry treason.
"The prime minister is pretty vulnerable," says Nikos Dendias. "Unless he proceeds quickly, creating growth and development, this could ruin his 'prime ministership' within 12-18 months."
Ultimately, Greece was backed into a corner; the banks are still its Achilles' heel. If the government had walked away from a deal, the European Central Bank would have turned off its lifeline this week - and Greece would soon have been printing its own currency.
Yes, Alexis Tsipras was elected pledging to reverse budget cuts. But he was also voted in by vowing to keep Greece in the eurozone.
And that was one promise he could never have broken.

Now it's just a matter of the Europeans agreeing, which seems inevitable, even if this time trust is gone...

http://www.bbc.com/news/world-europe-33491776

"There are many concerns, quite a bit of criticism both on the content of the proposals, but also on the even more difficult issue of trust," Mr Dijsselbloem said.
"How can we really expect this government to implement what it's now promising. I thing it's going to be quite a difficult meeting."
Mr Schaeuble was blunt: "We will definitely not be able to rely on promises."
France, which has been more positive towards Greece's latest proposals, said it would play a mediating role in Saturday's meeting.
But Finance Minister Michel Sapin conceded that ministers needed "to have confidence again, to have certainty that decisions which are spoken of are decisions which are actually taken".
The job of convincing the ministers has fallen to Greece's new Finance Minister Euclid Tsakalotos, who has replaced Yanis Varoufakis.

Grexit averted?

The Unreasoner
07-11-2015, 11:41 AM
Grexit averted?

For now, sure. But unfortunately no new tools were developed to address crises like this in the future. The whole idea of one currency serving multiple central governments is baffling to me. The US can be agile in a crisis (even if we often make bad policy decisions) because there is only one central government. China has even more power over their currency and economy (which makes their current efforts to solve their own crisis look incredibly halfhearted).

But what if no deal was reached? I didn't even think there was a legal mechanism for a Grexit. There really are few real tools with concrete power to effect outcomes in any European dispute. And certainly no one with the mandate, authority, or audacity to use them.

ETA:
http://cdn.theatlantic.com/static/mt/assets/business/Screen%20Shot%202012-05-06%20at%209.26.51%20PM.png

Kimon
07-11-2015, 11:53 AM
Grexit averted?

For now, sure. But unfortunately no new tools were developed to address crises like this in the future. The whole idea of one currency serving multiple central governments is baffling to me. The US can be agile in a crisis (even if we often make bad policy decisions) because there is only one central government. China has even more power over their currency and economy (which makes their current efforts to solve their own crisis look incredibly halfhearted).

But what if no deal was reached? I didn't even think there was a legal mechanism for a Grexit. There really are few real tools with concrete power to effect outcomes in any European dispute. And certainly no one with the mandate, authority, or audacity to use them.

ETA:
http://cdn.theatlantic.com/static/mt/assets/business/Screen%20Shot%202012-05-06%20at%209.26.51%20PM.png

It wasn't just the uncertainty on the legal mechanism of exit, but what would they have done with their currency? If they would have switched back to the drachma, it seems reasonable to assume that it would have spiraled in a freefall of devaluation caused by lack of trust by the public in its worth. Could they have legally kept a pseudo-Euro briefly to pay their pensioners before a complete, and stabler transition back the the drachma? Whatever cuts their pensioners will take due to these concessions likely are much better than what they would have experienced in losses in value had they left the euro. The same is true of their economy. Syriza was playing with fire.

GonzoTheGreat
07-11-2015, 12:19 PM
If Greece didn't want to leave the Euro, then all the other countries could try switching to some new currency. Could Greece then veto that, I wonder?

Nazbaque
07-11-2015, 01:17 PM
If Greece didn't want to leave the Euro, then all the other countries could try switching to some new currency. Could Greece then veto that, I wonder?

Could we change the name of the European Union to "No Greece Club"?

Kimon
07-12-2015, 01:26 PM
At this point I'd be surprised if Greece stays in the Eurozone. It looks like both Germany and Finland are unwilling to trust Tsipras, and are demanding that he return to Greece and pass all his "promises" through the Greek Parliament by Wednesday before they will consider going to their own legislatures. I'm doubtful that Tsipras can control his own party, and I'm not sure if Germany and Finland will accept working with Syriza. It seems almost as if they are trying to force Tsipras to choose between forming an alliance at home with more centrist elements in his own Parliament, or else stay loyal to Syriza and watch as his country descends into complete economic chaos.

I'd feel more sympathetic, but they really should have realized what they were doing when they voted no in that insanely irresponsible referendum last week.

http://www.bbc.com/news/world-europe-33499650

SomeOneElse
07-12-2015, 03:30 PM
Personally I want Greece to leave eurozone (cause if they switch to their old currency it will probably drop shortly after that so I can go to Greece for vacation and everything will be cheap), but I don't think it shall ever happen (at least in near future like 5-10 years). Everyone talks about it since 2010 or even 2009 and Every now and then they say that the very final deadline will be reached on (monday sunday etc) but these are only speculations because no one is interested in that Grexit and greeks still wanna stay within the EU.

Ozymandias
07-13-2015, 09:49 AM
Hahaha I am going to Greece on Saturday for a week and I'm not sure how I feel. I kind of want to just bring a lot of cash and try an arbitrage everything with dollars and euros. But I also very much do not want to be violently robbed.

Quite a conundrum.

Sarevok
07-13-2015, 11:15 AM
Hahaha I am going to Greece on Saturday for a week and I'm not sure how I feel. I kind of want to just bring a lot of cash and try an arbitrage everything with dollars and euros. But I also very much do not want to be violently robbed.

Quite a conundrum.

Bringing dollars would probably be totally useless. I would recommend bringing enough Euros to keep going for a while. Keep in mind people are currently only allowed to get EUR 60,- from ATMs and from what I've seen on tv, there tend to be serious lines...

Ozymandias
07-13-2015, 11:26 AM
Bringing dollars would probably be totally useless. I would recommend bringing enough Euros to keep going for a while. Keep in mind people are currently only allowed to get EUR 60,- from ATMs and from what I've seen on tv, there tend to be serious lines...

Why would dollars be useless? I've paid for most of this in advance, so what I need it for is tipping and meals and such. I assume American credit cards will work?

The question isn't whether the euro is valuable, its whether the drachma isn't. American currency will be just as viable for the average Greek when it comes to making a bank run as a euro would be. Moreso, I would think.

Kimon
07-13-2015, 11:28 AM
Bringing dollars would probably be totally useless. I would recommend bringing enough Euros to keep going for a while. Keep in mind people are currently only allowed to get EUR 60,- from ATMs and from what I've seen on tv, there tend to be serious lines...

That limit is, as far as I'm aware, still just for the Greeks, not for foreigners.

http://www.telegraph.co.uk/travel/travelnews/11708067/Greece-holidaymakers-spending-as-little-cash-as-possible.html

Ozy, your trip should still be fine. If you were German you might have run into some unpleasantness, but there seems little, at least imminent, threat of rioting, and the Greeks likely will be happy for the continued tourism and the money that you spend into their economy. They're not stupid. Tourism is still the driving force of their economy, they're not going to do anything dumb to jeopardize that. The fear was if they had to switch back to the drachma, as god knows what that might have been worth from one day to the next.

Kimon
07-13-2015, 11:32 AM
Why would dollars be useless? I've paid for most of this in advance, so what I need it for is tipping and meals and such. I assume American credit cards will work?

The question isn't whether the euro is valuable, its whether the drachma isn't. American currency will be just as viable for the average Greek when it comes to making a bank run as a euro would be. Moreso, I would think.

Transfer over the dollars you bring to euros. Paying in dollars is silly, not to mention rude, as it's not a 1:1 conversion, and it would require them to exchange them for euros, which at present would be a massive headache. Your bank cards should work, as long as they're visa or master card, not American Express. Just remember to inform your bank of the trip. You can also buy a card from AAA and load it with money if you feel more comfortable carrying that instead.

Kimon
07-14-2015, 11:19 PM
This isn't helpful.

http://www.bbc.com/news/business-33531845

The IMF, in the hours before Greece's deadline to pass the stipulations issued by the EU, has chosen to intercede with a criticism asserting that any deal without a forgiveness of a portion of the debt is pointless. Not only is Germany unwilling to pass any forgiveness through their Bundestag, leaving a cutting of the debt mute, but how does this do anything but sabotage the efforts to pass this through the Greek Parliament? Is there some purpose to playing saboteur?

The Unreasoner
07-15-2015, 12:11 AM
This isn't helpful.

http://www.bbc.com/news/business-33531845

The IMF, in the hours before Greece's deadline to pass the stipulations issued by the EU, has chosen to intercede with a criticism asserting that any deal without a forgiveness of a portion of the debt is pointless. Not only is Germany unwilling to pass any forgiveness through their Bundestag, leaving a cutting of the debt mute, but how does this do anything but sabotage the efforts to pass this through the Greek Parliament? Is there some purpose to playing saboteur?
It could push Greece out of the Euro. Greece will suffer enormously, but the damage will be more or less contained (they have no real exports, and aren't importing anything in large enough absolute volume to cause major problems for the rest of Europe if imports fall). If the new currency falls far enough, Greece will see some real investment, which will actually help Greece far more than more loans. Given the absurdity of German demands, a reasonable person could conclude that this was Germany's plan all along. Not that I'm alleging a conspiracy involving the IMF, I think that this is what they honestly believe (and of course, they are exactly right). I interpret it as a subtle way to undercut German dominance in the future (should Greece leave), probably French in origin. It will put more pressure on Germany to be flexible in the future.

Davian93
07-15-2015, 09:11 AM
Best thing for Greece would be a default...they'll never dig out of this hole anyway...might as well blow it up and start over Argentina style.

This would destroy the Euro of course

Ozymandias
07-15-2015, 09:23 AM
Best thing for Greece would be a default...they'll never dig out of this hole anyway...might as well blow it up and start over Argentina style.

This would destroy the Euro of course

It'll have almost zero impact. The only reason no one wants Greece to exit is because of the precedent it might set for Italy and Spain. Greece makes up about 2% of the Eurozone's GDP, tops, and even some of that seems likely to be fraudulently reported.

That being said, those two countries are rather less corrupt and entitled than the Greeks when it comes to things like taxes and expenditure, so it might not be an issue.

Literally no one in the world except tourists, Classical scholars, and feta enthusiasts care about Greece. It hasn't made a contribution on the world stage in millenia, except now, as a fraudulent player in the world economic system.

It is unlikely a Greek exit destroys the euro. This is why Syriza's whole game of chicken failed. The time when they had all the leverage was 5 years ago, when there was a real fear that Ireland and Portugal might also go under, and that that contagion might spread and impact a significant minority of the Eurozone. Now that those situations have stabilized (and also Italy and Spain to some degree), no one gives two shits about the Greeks. At this point, the only people that get hurt by a Greek exit are the Greeks, and I think Syriza realized that. The Germans certainly did, as they took the opportunity to put the screws to Greece for having the temerity to try and blackmail the rest of the EU.

It is tough to threaten anyone when you're naked and unarmed, and everyone knows it.

Kimon
07-15-2015, 10:46 AM
BBC thinks that Tsipras is still going to just barely manage to pass it through the Greek Parliament, but only do to opposition votes as many of the Syriza MPs are in revolt. So this will almost certainly lead to a new govt after the bailout goes through, or after their country collapses in a spiral of chaos if it doesn't pass through their parliament (or doesn't through the German Bundestag, though I can't believe that Merkel would allow that to happen, as it would make Germany look incredibly callous). The IMF might well be correct in that a reduction of the debt must happen, but it can't happen now. They should have shut up, and then brought this up in six months or a year after things have calmed and Greece wasn't facing imminent collapse.

I did find this amusing...

And tempers flared when former Finance Minister Yanis Varoufakis was heckled with shouts of "You got us here" while addressing one committee.

What the IMF did yesterday was every bit as irresponsible as what Syriza did with that ridiculous referendum vote last week.

http://www.bbc.com/news/world-europe-33535205

Nazbaque
07-15-2015, 11:53 AM
It is tough to threaten anyone when you're naked and unarmed, and everyone knows it.

I'm going on a tangent here, but that is a really bad metaphor. I know what you were getting at in the sense of Greece not having anything to threaten with, but nevertheless there are sadly plenty of women whose worst fear because of traumatic experience is a naked and quite often unarmed man.

Ozymandias
07-15-2015, 12:23 PM
Your ridiculous comment reminds me of the story of Samuel Johnson and the ladies of London. Look it up when you have time, its rather amusing (as well as probably apocryphal and very brief).

In short, people who are looking for something to be offended by will always manage to find it.

Anyone reading that post was perfectly aware of the context in which the metaphor was offered. It might have been a bad metaphor, but certainly not for the reasons you state. I mean... you assume its a man, for one. Can't Greece be personified as a woman?

If you are going to engage in discussion, please do so with some modicum of intelligence. There are plenty of phrases, words, and opinions thrown around on this site (including by me) which could be considered objectionable. I cannot possibly imagine how this could be taken that way; the context could not have been clearer, and the only way you've managed to take umbrage with it is by reading it in the most deliberately inaccurate and provocative way.

Kimon
07-15-2015, 01:38 PM
Anyone reading that post was perfectly aware of the context in which the metaphor was offered. It might have been a bad metaphor, but certainly not for the reasons you state. I mean... you assume its a man, for one. Can't Greece be personified as a woman?


Graecia, the Latin word for Greece is feminine in gender, and Ελλας, the Greek word for Greece, is also feminine. Greece is a woman. Not that I agree with reading as much into your comment as Naz did, but for the record, Deutschland is neuter in gender if using the German word, or feminine if using the Latin or the Greek - Germania. So technically, this would be one naked woman (Greece, if I'm following the analogy correctly) threatening another woman (Germany), who perhaps has been spayed...

Nazbaque
07-15-2015, 02:36 PM
Your ridiculous comment reminds me of the story of Samuel Johnson and the ladies of London. Look it up when you have time, its rather amusing (as well as probably apocryphal and very brief).

In short, people who are looking for something to be offended by will always manage to find it.

Anyone reading that post was perfectly aware of the context in which the metaphor was offered. It might have been a bad metaphor, but certainly not for the reasons you state. I mean... you assume its a man, for one. Can't Greece be personified as a woman?

If you are going to engage in discussion, please do so with some modicum of intelligence. There are plenty of phrases, words, and opinions thrown around on this site (including by me) which could be considered objectionable. I cannot possibly imagine how this could be taken that way; the context could not have been clearer, and the only way you've managed to take umbrage with it is by reading it in the most deliberately inaccurate and provocative way.

Actually I just assumed you meant that any naked and unarmed person would be non-threatening to anyone and simply provided you with an example to the contrary. This was in the vain hope that you might learn to edit what you are saying to better match what you mean, but as one might suspect your response is hostile. And you spice it with an insult too. Thank you for offering a piece of evidence on your lack of manners.

As for the actual topic, it seems you fail to see the subtler nuances of the situation. Forget for a moment that it's Greece and just think of it as an EU member. They are in a pinch, it's their own doing and they have already gotten quite a bit of help. What is EU to do? If the Union is too much of a strain to its stronger members those members' internal politics gain in anti-EU sentiment weakening the whole thing. On the other hand if a member gets harsh treatment no matter how well justified it sends quite the wrong message to other weak members and to potential new members. No matter how much of this is Greece's own fault, if they fall it will be seen as a EU failure one way or another. It's a lose-lose situation from where EU stands.

DahLliA
07-15-2015, 03:12 PM
And here we go again...

Ozymandias
07-15-2015, 03:43 PM
Actually I just assumed you meant that any naked and unarmed person would be non-threatening to anyone and simply provided you with an example to the contrary. This was in the vain hope that you might learn to edit what you are saying to better match what you mean, but as one might suspect your response is hostile. And you spice it with an insult too. Thank you for offering a piece of evidence on your lack of manners.

The meaning of what I said is pretty clear in context. You seem to be the only one having trouble. In either case, that is subjective; objectively, the grammar of my sentence should have been enough. I did not say "... to be threatening to anyone". You would have a valid point in that case. I said "... to threaten anyone". It is an active, not a passive verb. As I said, unless you are deliberately trying to find fault with the sentence, there is no way a person with common sense and a reasonable knowledge of English grammar can misinterpret that.

The obvious and easily discernible intent of the metaphor is that naked and unarmed people are particularly poor at threatening or bullying others.

As for the actual topic, it seems you fail to see the subtler nuances of the situation. Forget for a moment that it's Greece and just think of it as an EU member. They are in a pinch, it's their own doing and they have already gotten quite a bit of help. What is EU to do? If the Union is too much of a strain to its stronger members those members' internal politics gain in anti-EU sentiment weakening the whole thing. On the other hand if a member gets harsh treatment no matter how well justified it sends quite the wrong message to other weak members and to potential new members. No matter how much of this is Greece's own fault, if they fall it will be seen as a EU failure one way or another. It's a lose-lose situation from where EU stands.

The EU is already a game rigged against countries not named France or, increasingly, Germany. Economic policy is mostly dictated for the benefits of those two economies. This has been obvious for years and the curtain has been pulled away in recent years as they've refused to adjust monetary policy to assist the PIIGS (and others).

And I disagree, though obviously it is merely an opinion, that this is a lose-lose for the EU. If you told the EU right now that a Greek exit would have no impact on the likelihood of Spain and Italy exiting, they would probably tell the Greeks that they could go to hell. From the perspective of the rest of the EU, Greece is already a pariah getting what it deserves, and the fact they consistently lied to and defrauded the entire eurozone about their finances doesn't help with the optics either. A Greek exit has basically no economic consequences. The only reason it matters, or ever has mattered, is because it sets a precedent for important countries, because the Greeks will suffer immensely if they exit the euro cold turkey, and partially because now the EU member states have a lot more money invested in Greek sovereigns than they did half a decade back before the bailouts. But the bankruptcy/default issue is not really relevant.

Kimon
07-15-2015, 04:00 PM
And I disagree, though obviously it is merely an opinion, that this is a lose-lose for the EU. If you told the EU right now that a Greek exit would have no impact on the likelihood of Spain and Italy exiting, they would probably tell the Greeks that they could go to hell. From the perspective of the rest of the EU, Greece is already a pariah getting what it deserves, and the fact they consistently lied to and defrauded the entire eurozone about their finances doesn't help with the optics either. A Greek exit has basically no economic consequences. The only reason it matters, or ever has mattered, is because it sets a precedent for important countries, because the Greeks will suffer immensely if they exit the euro cold turkey, and partially because now the EU member states have a lot more money invested in Greek sovereigns than they did half a decade back before the bailouts. But the bankruptcy/default issue is not really relevant.

Part of the potential problem is that it underscores a vulnerability in the EU, and it would shatter the concept of permanence in the euro. If Greece can leave, why not Portugal, or Spain, or Italy. This crisis has also revealed the divide between France and Germany. France clearly was fighting to keep Greece in, perhaps at any cost. Germany by contrast seemed to have largely lost patience with Syriza, and was more willing to watch them walk away. The EU may be dominated by Germany and France, but it cannot survive as just Germany and France. And the dangers for the EU are not just Greece, not just the weakness of other EU nations (Italy, Spain, and Portugal in particular), not just the sanctity of the euro. There is still the spectre of England. Sure it's not in the euro, but will it stay in the EU? Can anyone really say that with certainty anymore? Greece leaving is one thing. England leaving?

Ozymandias
07-15-2015, 05:00 PM
Part of the potential problem is that it underscores a vulnerability in the EU, and it would shatter the concept of permanence in the euro. If Greece can leave, why not Portugal, or Spain, or Italy. This crisis has also revealed the divide between France and Germany. France clearly was fighting to keep Greece in, perhaps at any cost. Germany by contrast seemed to have largely lost patience with Syriza, and was more willing to watch them walk away. The EU may be dominated by Germany and France, but it cannot survive as just Germany and France. And the dangers for the EU are not just Greece, not just the weakness of other EU nations (Italy, Spain, and Portugal in particular), not just the sanctity of the euro. There is still the spectre of England. Sure it's not in the euro, but will it stay in the EU? Can anyone really say that with certainty anymore? Greece leaving is one thing. England leaving?

England not being in the euro lessens the economic importance of their leaving. It will be more symbolic and political.

And the crisis was always Spain and Italy. Portugal, Ireland, and Greece were never of any particular importance to the EU in terms of gross economic impact to the economic union.

I read an article the other day saying that the proverbial "Four Horsemen" of the Eurozone right now are a Greek exit prompting other exits, Russian aggression in Ukraine, the possibility of an UK exit in 20(17??) and the immigration issue.

The eurozone as a concept is great. The problem, as always, is that the member states refused to commit to it. And I refer mainly to France and Germany here, as they were the drivers. If they wanted to be serious about economic union they would have set up independent financial and economic institutions that could make decisions independent of Berlin or Paris.

The Unreasoner
07-15-2015, 05:22 PM
The Euro was always doomed to a slow death. The EU might endure, but 'ever greater unity' is as far away today as it ever was in the past.

The real crisis is still about ten years out, and it is in France. The fundamentals of their economy are not as strong as Germany's, and they are destined to have a similar crisis eventually (barring some ambitious decisions now, but that would require a measure of audacity largely absent from Europe. Stephen Fry was right: the bold went to America, the rational stayed behind. Two very different gene pools).

But if France's economy does collapse, no one will be able to counter Germany's regional hegemony. And Europe won't stand for that again.

Kimon
07-15-2015, 08:21 PM
Result was known an hour ago, but finally seeing the vote numbers. As bad as the rioting looked outside (one can't help but wonder if we would have still seen this ugliness if the IMF would have just shut up for a few more days), still pretty overwhelming numbers - 229 adults, 70 petulant children (6 of those perhaps more pouting than petulant, as those six abstained). Not at all surprising that one of the tantrum throwers was Varoufakis.

http://www.bbc.com/news/world-europe-33535205

The Unreasoner
07-15-2015, 08:28 PM
Result was known an hour ago, but finally seeing the vote numbers. As bad as the rioting looked outside (one can't help but wonder if we would have still seen this ugliness if the IMF would have just shut up for a few more days), still pretty overwhelming numbers - 229 adults, 70 petulant children (6 of those perhaps more pouting than petulant, as those six abstained). Not at all surprising that one of the tantrum throwers was Varoufakis.

http://www.bbc.com/news/world-europe-33535205
I don't like Syriza any more than you do, but it's a bit disingenuous to imply that those opposing the package are all petulant children. Frankly, the best path forward that I see is a Grexit+Default+Reforms. The IMF may not agree 100%, but they at least acknowledge that the current deal cannot work. Some of those 70 may simply realize this.

Kimon
07-15-2015, 09:07 PM
I don't like Syriza any more than you do, but it's a bit disingenuous to imply that those opposing the package are all petulant children. Frankly, the best path forward that I see is a Grexit+Default+Reforms. The IMF may not agree 100%, but they at least acknowledge that the current deal cannot work. Some of those 70 may simply realize this.

Some of the debt will almost certainly be written off, but not until tempers have calmed. Had Syriza not spent the last few months vilifying their benefactors it could have happened up front, but after what Tsipras and Varoufakis did, it will have to wait until both of those men are ruined. Varoufakis has already fallen (his fall was almost certainly the first demand made in Brussels, and one without which it was made clear that they would just allow Greece to burn), once Tsipras has as well, then you offer the olive branch. They need the money though right now. Without it the banks can't reopen unless they start printing monopoly money. And if they did that, a repeat of Argentina is probably a best case scenario. This had to be done.

GonzoTheGreat
07-16-2015, 03:21 AM
Part of the potential problem is that it underscores a vulnerability in the EU, and it would shatter the concept of permanence in the euro.
That vulnerability is the predictable result of how the German and French politicians set the system up in the first place.
Why should the Greek pay the price for the German decisions? Why not put the bill right where it belongs: with Germany (and the Netherlands, and the other "strong" Euro countries)?

Yes, it is clear in hindsight that Greece should not have been allowed to join the Euro in the first place; but that was clear when the decision was made too. Nothing has changed, apart from the "plausible deniability" no longer being plausible even for French politicians.

And, as always, the recipe from the pro-Europe people is "more of the same", "let us continue digging deeper", and they pretend that will solve the problem, or at least they claim that's what should be done unless anyone has a completely worked out and proven alternative.

Ozymandias
07-16-2015, 09:54 AM
And, as always, the recipe from the pro-Europe people is "more of the same", "let us continue digging deeper", and they pretend that will solve the problem, or at least they claim that's what should be done unless anyone has a completely worked out and proven alternative.

I don't necessarily disagree with the rest of it (the entire Eurozone is a game rigged to help French and German exports), but this seems pretty untrue.

Austerity has not worked in Greece, because Greece's problem is far more a lack of revenue collection than it is expenditure.

However, to claim that austerity is a discredited theory is just wrong. There is at least an argument to be made that austerity was effective in the Irish recovery and subsequent exit from the bailout. Perhaps it isn't working in Greece. But then, nothing is, and one might make the argument that what Greece needs is someone to force them to tighten up their finances, seeing as they've done such a horrible job of running it themselves.

Davian93
07-16-2015, 11:44 AM
I don't necessarily disagree with the rest of it (the entire Eurozone is a game rigged to help French and German exports), but this seems pretty untrue.

Austerity has not worked in Greece, because Greece's problem is far more a lack of revenue collection than it is expenditure.

However, to claim that austerity is a discredited theory is just wrong. There is at least an argument to be made that austerity was effective in the Irish recovery and subsequent exit from the bailout. Perhaps it isn't working in Greece. But then, nothing is, and one might make the argument that what Greece needs is someone to force them to tighten up their finances, seeing as they've done such a horrible job of running it themselves.

Austerity almost never works...it's like trying to get s fire going by throwing sand on it. You spend yourself out of a recession, you don't further deflate the GDP by cutting back severely.

Kimon
07-16-2015, 12:18 PM
Austerity almost never works...it's like trying to get s fire going by throwing sand on it. You spend yourself out of a recession, you don't further deflate the GDP by cutting back severely.

The key question here seems to be would their pensions and civil service sector (which are both huge) be sustainable in a better economic climate. If it's just the recession, then austerity is stupid, as austerity will just feed the recession. The problem with Greece on the other hand is that their spending isn't sustainable in a good economy. What they are doing is essentially asking Europe to pay the bill forever for their pensions as they can't afford to do so themselves. Which means they must either raise both taxes and curtail the hiding of income so as to bring in enough money to afford their spending, or cut the spending and continue hiding their personal income. As much as the Republicans here may assert that our spending isn't sustainable, we on the other hand can afford what we spend, if the economy isn't dismal. Sure we waste money on stupid crap, far too much defense, not enough infrastructure. But we can afford our welfare programs and all the rest. Austerity here thus would be dumb. Greece on the other hand seemed more like a teenager with their first credit card. They needed a stern lecture from mom, but they also needed some help from mom to bail them out. And like a petulant child, they were a really ungrateful little brat when mom saved their a*s.

The Unreasoner
07-16-2015, 04:35 PM
Like a petulant child, they were a really ungrateful little brat when mom saved their a*s.
Syriza. Syriza is the ungrateful brat. The Greek people are responding to an impossible situation almost rationally.

Even the ousted finance guy (Van-something?) may have been perfectly rational in a certain context. John Nash's recent death gave him a chance to talk about Nash equilibriums and game theory. He knew how he came across.

Kimon
07-16-2015, 04:49 PM
Even the ousted finance guy (Van-something?) may have been perfectly rational in a certain context. John Nash's recent death gave him a chance to talk about Nash equilibriums and game theory. He knew how he came across.

Varoufakis. BBC has an interesting theory on his strategy, and why it failed.

http://www.bbc.com/news/33507250

I think you can understand the Greek position much more simply: they predicated their negotiating position on notions that turned out to be untrue.
Here is another simple idea from game theory: a classic negotiation between two parties is best understood by looking at ideas called the "outside option" and the "inside option".
The outside option is the outcome for each individual if the negotiation fails. The inside option is what you get if the negotiation is completed. Negotiation is usually the process of changing the value of the inside option.

My assumption (largely based on Duncan's great reporting) is that Mr Varoufakis, a few months ago, thought that the outside option for Europe was gruesome.
So he could demand a lot, and they would still agree because it would be better for them.
For example, we know that he estimated that a messy Greek default would lead to financial contagion: for the sake of not saving little Greece, Europe could make investors worry about lending to Portugal, Spain or Italy.
He wrote in 2012 "the notion that Europe is ready for a Grexit is absurd."
Measures then under way by the ECB could not limit "the damage on Spain, then Italy etc."
In short, if Europe did not cut a deal, Greece would rip Europe in two. That would make the outside option for Europe a catastrophe.
And Mr Varoufakis also assumed that the outside option for Greece was not all that bad. That means his hand, in a negotiation, would be very strong.
That is because, quite recently, Greece was running a so-called "primary surplus" earlier this year.
That means if it got cut off from financial markets because it failed to pay its debtors, it could still keep its public services running.
I would presume he also thought the banks would be kept afloat by the European Central Bank: in previous chapters of the crisis, it actually rewrote its own rules to keep the banks open and liquid in Greece...

There was a catch, though. All of his assumptions were wrong.

Davian93
07-17-2015, 12:25 PM
England not being in the euro lessens the economic importance of their leaving. It will be more symbolic and political.

And the crisis was always Spain and Italy. Portugal, Ireland, and Greece were never of any particular importance to the EU in terms of gross economic impact to the economic union.

I read an article the other day saying that the proverbial "Four Horsemen" of the Eurozone right now are a Greek exit prompting other exits, Russian aggression in Ukraine, the possibility of an UK exit in 20(17??) and the immigration issue.

The eurozone as a concept is great. The problem, as always, is that the member states refused to commit to it. And I refer mainly to France and Germany here, as they were the drivers. If they wanted to be serious about economic union they would have set up independent financial and economic institutions that could make decisions independent of Berlin or Paris.

I agree with this to an extent and with your earlier response to me on them being just 2% of the Euros GDP. My thought is more on the psychological impact them leaving would have on the market in general and the effect it will have for future precedent among the European confederation. They need as a group to move towards a federal govt not retreat back into vying middle powers. A united Europe is good for everyone.

On austerity, I would agree with Kimon (I think it was him) about Greece needing to cut back on pensions but the reality of the issue has to do with revenue, not so much spending which is good for GDP. Their underlying issue has always been revenue from taxation.

We have the same issue here in the U.S. albeit far less severe as our economy is far stronger for a lot of reasons. Our issue since our last surplus under Clinton isn't spending, it's our low tax to GDP ratio (one of the lowest in the developed world).

Our social programs and defense spending (outside of the 2 wars that idiot started) aren't killing us, our lack of revenue through taxes is.

Ozymandias
07-27-2015, 08:58 AM
I am happy to report that in my week in Greece, I saw no riots.

GonzoTheGreat
07-27-2015, 09:44 AM
I am happy to report that in my week in Greece, I saw no riots.
You probably did something wrong. Maybe you should've gone to France instead.