Greek referendum

[I'm Brian]

The solution is simple

Is that the country or the company though?

And will they be allowed to keep the Euro 2004 title?

[Granny Danger]

I didn't realise the hatred that existed for Greece.

Comparing them to a defunct Scottish football club...

[DeeTillEhDeh]

Tsiparas is a political opportunist - we've already seen him cuddling up to that rat Putin. This is not just about Greece and the Euro but Tsipras's ego.

[Ad Lib]

If it's just a case of German and French banks going bust if the loans are defaulted on, why would the Eurozone have an incentive to bailout Greece rather than just let them default, bailout their banks directly and less expensively?

The reality of the situation here is that Greece is a basket case and has consistently refused to make meaningful structural reforms. An effective retirement age for most jobs a clear decade behind much of Western Europe and State pensions at competitive value. Absolute joke.

The efforts to paint this as some sort of democratic insult are just as risible. Greece benefited massively from cheap credit and a strong currency in the good years that they couldn't have dreamt enjoying under the old Drachma. They're not being bullied by anyone here. They are simply a badly indebted country whose priorities have consistently been at odds with self-sustainability. They get austerity no matter what they do. It's not being forced on them by the EU and IMF. Either it's austerity from them that keeps them in the Euro, or it's austerity in the form of astronomically expensive credit after a default without ECB there to back them. Or devalue a new Drachma until they have to live off olives.

They are fucked no matter what. The question now isn't whether there should be austerity, but who picks up the tab for the economic damage created by Greece making the entire Eurozone unstable.

[strichener]

If it's just a case of German and French banks going bust if the loans are defaulted on, why would the Eurozone have an incentive to bailout Greece rather than just let them default, bailout their banks directly and less expensively?

The reality of the situation here is that Greece is a basket case and has consistently refused to make meaningful structural reforms. An effective retirement age for most jobs a clear decade behind much of Western Europe and State pensions at competitive value. Absolute joke.

The efforts to paint this as some sort of democratic insult are just as risible. Greece benefited massively from cheap credit and a strong currency in the good years that they couldn't have dreamt enjoying under the old Drachma. They're not being bullied by anyone here. They are simply a badly indebted country whose priorities have consistently been at odds with self-sustainability. They get austerity no matter what they do. It's not being forced on them by the EU and IMF. Either it's austerity from them that keeps them in the Euro, or it's austerity in the form of astronomically expensive credit after a default without ECB there to back them. Or devalue a new Drachma until they have to live off olives.

They are fucked no matter what. The question now isn't whether there should be austerity, but who picks up the tab for the economic damage created by Greece making the entire Eurozone unstable.

I have never read such ecomonomically illiterate pish. The problem is not how Greece runs it's economy but the fact that it has to do it within a full monetary union with an incomplete economic and fiscal union. The terms of the bailout offered to Greece were punitive and unlikely to have been substainable in countries with far stronger economies than Greece.

If you want to know the cause of this, read this ruling from the EU.

Meanwhile, the liquidity provided by the ECB to the banking sector of the larger EU economies were on terms far more lenient than Greece. The reasons for this were political rather than ecomonic as some of these institutions would have failed if the had to borrow at commercial terms. Continual efforts to get the banks to lend this money out into the non-financial business and household sectors of the economy have failed as they need the cheap capital to keep the financial sector afloat.

Given that the EU can substain the banking sector with vastly more money than needed by Greece (the SMP action alone injected €200bln without taking into account other measures), you can conclude that the reason that Greece has been treated in the manner it has is to warn other (larger) countries.

[Fotbawmad]

If it's just a case of German and French banks going bust if the loans are defaulted on, why would the Eurozone have an incentive to bailout Greece rather than just let them default, bailout their banks directly and less expensively?

The reality of the situation here is that Greece is a basket case and has consistently refused to make meaningful structural reforms. An effective retirement age for most jobs a clear decade behind much of Western Europe and State pensions at competitive value. Absolute joke.

The efforts to paint this as some sort of democratic insult are just as risible. Greece benefited massively from cheap credit and a strong currency in the good years that they couldn't have dreamt enjoying under the old Drachma. They're not being bullied by anyone here. They are simply a badly indebted country whose priorities have consistently been at odds with self-sustainability. They get austerity no matter what they do. It's not being forced on them by the EU and IMF. Either it's austerity from them that keeps them in the Euro, or it's austerity in the form of astronomically expensive credit after a default without ECB there to back them. Or devalue a new Drachma until they have to live off olives.

They are fucked no matter what. The question now isn't whether there should be austerity, but who picks up the tab for the economic damage created by Greece making the entire Eurozone unstable.

It's important to understand that the Euro is a political project; not an economic one. It was dreamt up many years ago by German and French elites and you should never underestimate their political will to keep it alive. The reason the EU won't let Greece default is because they don't want it to set a precedence for bigger distressed countries and they know it will cause a domino effect throughout the EU. After all, if people owed money by Greece don't get paid, then they can't pay their debts to other people etc etc. This is the exact reason the banks in 2008 were bailed out, because it would have meant credit disappearing from the economy leading to a money panic.

You talk about the early retirement problem Greece has, but what about the large bloated public sector? Not to mention how overly generous it was remunerated. On top of that there is the elephant in the room, which is the massive military expenditure they have relative to GDP. You could talk about threats posed by Turkey or Balkan countries, but these are greatly exaggerated and it's policy towards them is 20-30 years out of date. Yet, there is little evidence of austerity being practiced there.

Austerity might make sense to practice on an individual level, but it's economic illiteracy to think it can work on a macro level, because if everyone did it. We'd all be broke. It would be like a poker game played by perfect players. No one would ever get ahead in the long run. Austerity doesn't work because it is fundamentally deflationary.

[Alan Stubbs]

Where does Greece's 60% unemployed youth population fit into the "they brought it on themselves, f**k them" approach?

I'd imagine a big reason that other European countries don't just bail out their own banks, is that it's politically a lot easier to rely on the kind of vindictive, lust for punishment displayed in Ad Lib's post, than it is to face up to how badly your own country has fucked up as well. Recent Balkan and Eastern European history would also suggest there are usually some great privitisation opportunties to be found when econmically fucked countries have the IMF leaning on them.

Tsiparas is a political opportunist - we've already seen him cuddling up to that rat Putin. This is not just about Greece and the Euro but Tsipras's ego.

The Russia/Turkey gas stream could be a transformative economic boost for Greece, if they get involved. It's a no brainer for Greece to talk to them. Western institutions were quite happy to use their leverage to the maximum when imposing all kinds of conditions on Greece. If the prospect of an increasing Eurasian Union causes them some headaches, f**k them.

[Pete's Frontier]

Greece is just the front line in the collapse of the euro zone and the disaster of the eu political experiment. The same story is to be found all over southern Europe and of course in Ireland. Sturgeon and her minions get their way it will be Scotland with the same begging bowl out.

[strichener]

It's important to understand that the Euro is a political project; not an economic one. It was dreamt up many years ago by German and French elites and you should never underestimate their political will to keep it alive. The reason the EU won't let Greece default is because they don't want it to set a precedence for bigger distressed countries and they know it will cause a domino effect throughout the EU. After all, if people owed money by Greece don't get paid, then they can't pay their debts to other people etc etc. This is the exact reason the banks in 2008 were bailed out, because it would have meant credit disappearing from the economy leading to a money panic.

You talk about the early retirement problem Greece has, but what about the large bloated public sector? Not to mention how overly generous it was remunerated. On top of that there is the elephant in the room, which is the massive military expenditure they have relative to GDP. You could talk about threats posed by Turkey or Balkan countries, but these are greatly exaggerated and it's policy towards them is 20-30 years out of date. Yet, there is little evidence of austerity being practiced there.

Austerity might make sense to practice on an individual level, but it's economic illiteracy to think it can work on a macro level, because if everyone did it. We'd all be broke. It would be like a poker game played by perfect players. No one would ever get ahead in the long run. Austerity doesn't work because it is fundamentally deflationary.

There has been massive austerity in Greece.

To compound that, the IMF and EU calculated that the policies that they insisted were implemented as a condition of the bailout would shrink the ecomony by approx 7.5%. The reality is closer to 18%. So it isn't just solely the Greeks that should be held accountable.

The big elephant in the room is that the IMF have a history of implementing structural reforms as part of a financial bailout BUT only in countries where the politicians of that nation have total control over social, political, monetary and fiscal policies. Greece does not fit into this category and it is why they will default.

[AberdeenBud]

The bookies saying a Yes vote is more likely now. Now idea what they're basing that on, mind. But if it is a Yes that's surely curtains for Tsipras and Syriza.

And to the surprise of no one, that's capital controls imposed. For what could be a very long time.

[Fotbawmad]

The bookies saying a Yes vote is more likely now. Now idea what they're basing that on, mind. But if it is a Yes that's surely curtains for Tsipras and Syriza.

And to the surprise of no one, that's capital controls imposed. For what could be a very long time.

TBF it's a damned if you do; dammed if you don't situation. At least a referendum allows you to escape any blame, because if the vote goes against what members of the public want. They're going to blame sections of society and not the establishment.

[welshbairn]

The bookies saying a Yes vote is more likely now. Now idea what they're basing that on, mind. But if it is a Yes that's surely curtains for Tsipras and Syriza.

And to the surprise of no one, that's capital controls imposed. For what could be a very long time.

It could be good for them, did all they could to get a better deal but in the end had to go with the will of the Greek people, instead of selling out their manifesto promises.

[Alan Stubbs]

Expect no end of conspiracy theories to pop up after this one.

Edit: 60 Euro withdrawal limits until the 7th.

VikingTon's going to be the man over there, providing he brings his Euros from Blighty.

[AberdeenBud]

It could be good for them, did all they could to get a better deal but in the end had to go with the will of the Greek people, instead of selling out their manifesto promises.

Agreed. Some sensible words, as usual, from Yanis on that matter.

Although given the rhetoric coming from Athens I'm starting to subscribe to the theory that Tsipras wanted out all along but had to go through the motions given the popularity of the Euro with the Greek people.

What if the EU start to cut Greece adrift, if they haven't already, and the Greeks vote Yes? That would leave the EU in a slightly awkward position. They're probably hoping for a No as well just to get it over and done with.

[Michael W]

I'm starting to wonder if Tsipras was gambling on the ECB/Eurozone backing down. He's bound to have known they have no particular wish to see Greece out the Euro or indeed the EU, and subsequently coming to a compromise that would remove those potential eventualities.

[Ad Lib]

I have never read such ecomonomically illiterate pish. The problem is not how Greece runs it's economy but the fact that it has to do it within a full monetary union with an incomplete economic and fiscal union.

Nonsense. If Greece had sought to restructure its economy in the early part of the C21st so that its trade was broadly balanced and it he an effective tax and pensions system the impact of the Global Financial Crisis wouldn't have been anything like as bad and therefore their need for a bailout would have been drastically diminished. Of course there are issues relating to monetary and fiscal union not being coextensive, but that doesn't mean the Greeks should have run their economy the way they did in the decades before the crisis, nor does it mean that Greece wouldn't have been totally fucked even if it hadn't been in the Euro, or if there had been fiscal Union before it. The reality is the underlying reasons for austerity are not the fault of the EU. They are midwives, not the father.

The terms of the bailout offered to Greece were punitive and unlikely to have been substainable in countries with far stronger economies than Greece.

Yes but without the bailout they'd have had to implement massive austerity anyway because otherwise they'd get almost no credit from anyone at a remotely acceptable rate of interest. Greece's choice was always the method of its execution, not the type of sentence.

If you want to know the cause of this, read this ruling from the EU.

I'm perfectly aware the books were cooked to let Greece in. It doesn't change the fact that they chose to try to meet the convergence criteria earlier than they had to, that once they were in they failed to make structural reforms and then when faced with the choice to accept or reject the first and second bailout, they chose to accept it. It's not coercion to offer Greece bailout funds on punitive terms.

Meanwhile, the liquidity provided by the ECB to the banking sector of the larger EU economies were on terms far more lenient than Greece. The reasons for this were political rather than ecomonic as some of these institutions would have failed if the had to borrow at commercial terms. Continual efforts to get the banks to lend this money out into the non-financial business and household sectors of the economy have failed as they need the cheap capital to keep the financial sector afloat.

They got credit on more lenient terms than Greece because there was a remotely decent prospect they would actually get their money back. This is the same reason that a bank would offer Microsoft a multi-million pound unsecured loan, but insists on a standard security and a higher rate of interest for your mortgage. That's how credit works.

Given that the EU can substain the banking sector with vastly more money than needed by Greece (the SMP action alone injected €200bln without taking into account other measures), you can conclude that the reason that Greece has been treated in the manner it has is to warn other (larger) countries.

It can't though. Because economics is behavioural. To shriek "it's political" is to state the fucking obvious. But just because it's political to be punitive with the worst indebted, least structurally sound and most inefficient economy in the Eurozone as a condition of helping them, knowing that if called upon to salvage Spain and Italy again they can't afford it, doesn't mean it's wrong or anything other than unjustified.

Greece chose to be part of this single currency project. If you sign up and you get fucked that's your own fault.

[strichener]

Nonsense. If Greece had sought to restructure its economy in the early part of the C21st so that its trade was broadly balanced and it he an effective tax and pensions system the impact of the Global Financial Crisis wouldn't have been anything like as bad and therefore their need for a bailout would have been drastically diminished. Of course there are issues relating to monetary and fiscal union not being coextensive, but that doesn't mean the Greeks should have run their economy the way they did in the decades before the crisis, nor does it mean that Greece wouldn't have been totally fucked even if it hadn't been in the Euro, or if there had been fiscal Union before it. The reality is the underlying reasons for austerity are not the fault of the EU. They are midwives, not the father.

Yes but without the bailout they'd have had to implement massive austerity anyway because otherwise they'd get almost no credit from anyone at a remotely acceptable rate of interest. Greece's choice was always the method of its execution, not the type of sentence.

I'm perfectly aware the books were cooked to let Greece in. It doesn't change the fact that they chose to try to meet the convergence criteria earlier than they had to, that once they were in they failed to make structural reforms and then when faced with the choice to accept or reject the first and second bailout, they chose to accept it. It's not coercion to offer Greece bailout funds on punitive terms.

They got credit on more lenient terms than Greece because there was a remotely decent prospect they would actually get their money back. This is the same reason that a bank would offer Microsoft a multi-million pound unsecured loan, but insists on a standard security and a higher rate of interest for your mortgage. That's how credit works.

It can't though. Because economics is behavioural. To shriek "it's political" is to state the fucking obvious. But just because it's political to be punitive with the worst indebted, least structurally sound and most inefficient economy in the Eurozone as a condition of helping them, knowing that if called upon to salvage Spain and Italy again they can't afford it, doesn't mean it's wrong or anything other than unjustified.

Greece chose to be part of this single currency project. If you sign up and you get fucked that's your own fault.

I re-iterate, you are economically illiterate. The link I provided was nothing to do with cooking the books. Such a thing did not actually happen. I would suggest you do some further research before you make an arse of yourself.

[Ad Lib]

I re-iterate, you are economically illiterate. The link I provided was nothing to do with cooking the books. Such a thing did not actually happen. I would suggest you do some further research before you make an arse of yourself.

Yes it was. You linked me to the accession approval and the Greek derogation on deficit levels.

[strichener]

Yes it was. You linked me to the accession approval and the Greek derogation on deficit levels.

As I said, it wasn't a link to cooking the books. If you disagree then please provide some evidence of this cooking.

[Ad Lib]

As I said, it wasn't a link to cooking the books. If you disagree then please provide some evidence of this cooking.

The derogation from the deficit rule gave the impression that Greece had converged on the criteria when it hadn't. That's cooking the books.