Greece debt crisis

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Phil Neatherway
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Re: Greece debt crisis

Post by Phil Neatherway » Mon Jul 13, 2015 10:09 am

Aha, a conspiracy theory!

There's nothing like a good conspiracy theory!

And this is nothing like ...

John McKenna
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Re: Greece debt crisis

Post by John McKenna » Mon Jul 13, 2015 10:14 am

Too true, Phil. This is a very bad conspiracy, in my view, and I'm a bad conspiracy theorist.

You play on the white squares and I'll play on the black...
To find a for(u)m that accommodates the mess, that is the task of the artist now. (Samuel Beckett)

John McKenna
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Re: Greece debt crisis

Post by John McKenna » Mon Jul 13, 2015 10:26 am

NickFaulks wrote:
Phil Neatherway wrote:It's nothing to do with democracy.
You're certainly right there. The EU has nothing to do with democracy, except the need to crush it. They know that it is toxic to their project.

The good news about last night is that the secret is out - see #thisisacoup.
I found this -

http://www.fxstreet.com/analysis/market ... 015/07/13/

(There's a preceding ad to be closed.)

and this -

http://nosokomeiolimnou.gr/?p=27605

All Greek to me.
To find a for(u)m that accommodates the mess, that is the task of the artist now. (Samuel Beckett)

Roger de Coverly
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Re: Greece debt crisis

Post by Roger de Coverly » Mon Jul 13, 2015 10:29 am

Matthew Turner wrote:Creditors know and have known for some time that they wouldn't be getting their money back.
The latest proposal is equivalent to sending in the Bailiffs, taking possession of the family silver, moving it to Luxembourg, selling it to the highest bidder and using the proceeds to pay off some of the loans. Presumably the Greeks themselves aren't to be trusted with the sale.

Phil Neatherway
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Re: Greece debt crisis

Post by Phil Neatherway » Mon Jul 13, 2015 10:31 am

I note that all Eurozone parliaments must agree the new bailout:-

http://www.bbc.co.uk/news/world-europe-33503955

How is this crushing democracy?

John McKenna
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Re: Greece debt crisis

Post by John McKenna » Mon Jul 13, 2015 10:46 am

German Chancellor Angela Merkel -

“The most important currency has been lost and that is trust.”

“That means that we will have tough discussions and there will be no agreement at any price.”

Maybe that last sentence is a mistranslation or a Freudian slip.

Anyway, if there's no bailout there's no need for democracy, or so it seems.
To find a for(u)m that accommodates the mess, that is the task of the artist now. (Samuel Beckett)

Matthew Turner
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Re: Greece debt crisis

Post by Matthew Turner » Mon Jul 13, 2015 11:02 am

Roger de Coverly wrote:
Matthew Turner wrote:Creditors know and have known for some time that they wouldn't be getting their money back.
The latest proposal is equivalent to sending in the Bailiffs, taking possession of the family silver, moving it to Luxembourg, selling it to the highest bidder and using the proceeds to pay off some of the loans. Presumably the Greeks themselves aren't to be trusted with the sale.
I am not sure that is entirely accurate 25bn will be use to recapitalise the Banks, 12.5bn will be used for other investments, presumably growth initiatives and 12.5bn will be used to pay down the 300bn debt?? That isn't really the creditors getting their money back. Whether it is sensible to sell off the family silver is of course a divisive political issue, numerous Greek governments have reneged on agreements to privatise industries, something of an irony then that Syriza looks likely to 'achieve' the shrinking of the state that other administrations have failed to do.

John McKenna
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Re: Greece debt crisis

Post by John McKenna » Mon Jul 13, 2015 11:17 am

Looks like a deal is taking shape - subject to the representative democracy of the Greek & Eurozone Parliaments.

Not out of the dark woods and into the sunlit uplands yet, though.
To find a for(u)m that accommodates the mess, that is the task of the artist now. (Samuel Beckett)

Mick Norris
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Re: Greece debt crisis

Post by Mick Norris » Mon Jul 13, 2015 11:49 am

Matthew is correct about the deal

BBC website
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NickFaulks
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Re: Greece debt crisis

Post by NickFaulks » Mon Jul 13, 2015 12:42 pm

Required reading for anyone who is interested in what really happened since Syriza won the election.

http://www.newstatesman.com/world-affai ... ave-greece
If you want a picture of the future, imagine a boot stamping on a human face — forever.

John McKenna
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Re: Greece debt crisis

Post by John McKenna » Mon Jul 13, 2015 1:19 pm

Riveting read - the rivets continue to pop under unrelenting pressure.
To find a for(u)m that accommodates the mess, that is the task of the artist now. (Samuel Beckett)

Brian Towers
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Re: Greece debt crisis

Post by Brian Towers » Mon Jul 13, 2015 5:06 pm

NickFaulks wrote:Required reading for anyone who is interested in what really happened since Syriza won the election.

http://www.newstatesman.com/world-affai ... ave-greece
An eloquent reminder, if any were needed, that the Greeks invented tragedy.
Ah, but I was so much older then. I'm younger than that now.

David Robertson
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Re: Greece debt crisis

Post by David Robertson » Mon Jul 13, 2015 5:48 pm

I read the Varoufakis piece earlier today. I'm sure he doesn't exaggerate when he states that, no matter what cogent argument he presented, no one was listening. That's Varoufakis's naivety, I'm afraid. Political meetings are not academic seminars. People bring power to such meetings, not power of argument. The creditors, led by Germany, haven't been listening, nor negotiating, nor giving a flying fig for the past several months. When you hold all the cards, you don't. That's how power works. Syriza just found out the hard way.

For my guidance on this unfolding drama, for weeks I've been following commentary in the Financial Times. It has more than an average journalist's interest in the matter. While clearly no friend of Syriza, the FT has been consistently scornful of the EU and the ECB, and from time to time of the IMF too. The general line has been: avoid Grexit; reschedule debt repayment; write-offs; and Greek concessions. This piece today, text in full because of paywall, adds something to the endgame - if endgame, it be.

by Wolfgang Munchau (a regular contrbutor)

A few things that many of us took for granted, and that some of us believed in, ended in a single weekend. By forcing Alexis Tsipras into a humiliating defeat, Greece’s creditors have done a lot more than bring about regime change in Greece or endanger its relations with the eurozone. They have destroyed the eurozone as we know it and demolished the idea of a monetary union as a step towards a democratic political union.

In doing so they reverted to the nationalist European power struggles of the 19th and early 20th century. They demoted the eurozone into a toxic fixed exchange-rate system, with a shared single currency, run in the interests of Germany, held together by the threat of absolute destitution for those who challenge the prevailing order. The best thing that can be said of the weekend is the brutal honesty of those perpetrating this regime change.

But it was not just the brutality that stood out, nor even the total capitulation of Greece. The material shift is that Germany has formally proposed an exit mechanism. On Saturday, Wolfgang Schäuble, finance minister, insisted on a time-limited exit — a “timeout” as he called it.

I have heard quite a few crazy proposals in my time, and this one is right up there. A member state pushed for the expulsion of another. This was the real coup over the weekend: not only regime change in Greece, but also regime change in the eurozone.

The fact that a formal Grexit may have been avoided for the moment is immaterial. Grexit will be back on the table when you have the slightest political accident — and there are still many things that could go wrong, both in Greece and in other eurozone parliaments. Any other country that in future might challenge German economic orthodoxy will face similar problems.

This brings us back to a more toxic version of the old exchange-rate mechanism of the 1990s that left countries trapped in a system run primarily for the benefit of Germany, which led to the exit of the British pound and the temporary departure of the Italian lira. What was left was a coalition of countries willing to adjust their economies to Germany’s. Britain had to leave because it was not.

What should the Greeks do now? Forget for a moment the economic debate of the past few months, over issues such as the impact of austerity or economic reforms on growth. Instead ask yourself this simple question: do you really think that an economic reform programme, for which a government has no political mandate, which has been explicitly rejected in a referendum, that has been forced through by sheer political blackmail, can conceivably work?

The implications for the rest of the eurozone are at least as troubling. We will soon be asking ourselves whether this new eurozone, in which the strong push around the weak, can be sustainable. Previously, the strongest argument against any forecasts of break-up has been the strong political commitment of all its members. If you ask Italians why they are in the eurozone, few have ever pointed to the economic benefits. They wanted to be part of the most ambitious project of European integration undertaken so far.

But if you take away the political aspiration, you may end up with a different judgment. From a pure economic point of view, we know that the euro has worked well for Germany. It worked moderately well for The Netherlands and Austria, although it produced quite a degree of financial instability in both.

But for Italy, it has been an unmitigated economic disaster. The country has seen virtually no productivity growth since the start of the euro in 1999. If you want to blame the lack of structural reforms, then you have to explain how Italy managed decent growth rates before then. Can we be sure that a majority of Italians will support the single currency in three years’ time?

The euro has not worked out for Finland either. While the country is considered the world champion of structural reforms, its economy has slumped ever since Nokia lost the plot as the world’s erstwhile premier mobile phone maker. Whether the euro is sustainable for Spain and Portugal is not clear. France has performed relatively well during the euro’s early years, but it, too, is now running persistent current account deficits. It is not only Greece where the euro is not optimal.

Once you strip the eurozone of any ambitions for a political and economic union, it changes into a utilitarian project in which member states will coldly weigh the benefits and costs, just as Britain is currently assessing the relative advantages or disadvantages of EU membership. In such a system, someone, somewhere, will want to leave sometime. And the strong political commitment to save it will no longer be there either.

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Matt Mackenzie
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Re: Greece debt crisis

Post by Matt Mackenzie » Mon Jul 13, 2015 6:07 pm

Yes, Schauble and those who think like him could end up regretting this moment of "triumph".

I expect that left to herself, Merkel knows this and would have been more merciful. But the German public are not in a mood for it :(
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Matthew Turner
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Re: Greece debt crisis

Post by Matthew Turner » Mon Jul 13, 2015 6:34 pm

So Germany could have been more merciful?
Greece are being forced to put 50bn of assets (well not really they were sort of valued at that in 2011) into a fund to be managed by Greeks in Greece. Greece will have to raise VAT because they cannot collect any other tax and by expanding to hotels and islands a lot will be paid by tourists. Pension might be cut by 6% from the most generous in the EU as a proportion of GDP. In return Greece will get in excess of 80bn none of which will go to pay off debt to the EU.
Those Germans really strike a tough bargain.

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