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[travisbickle]

Investors don't invest money because they think the situation will be sad if they don't. They do it because they can make a return on their investments. The issue with returns on their investment is not trust at the moment (or at least, trust is a much smaller issue). It is the fact that Greek GDP has dropped by a quarter since the crisis began. Who invests somewhere when they'll lose a quarter of their investment?



Go for it. However, given this is almost exactly what they did in 2010 and then in 2012, it doesn't seem like lessons have been learnt.

Currently they do it because they get free money from the US government and get bailed out if it fails.

 

[KHlover]

Neither politicians nor the public seem to give a shit what economists say by and large

True. Even before but especially after 2008 no one seems to give a rat's ass about an economist's opinion anymore.

 

[Deleted member 231381]

I understand the sentiments and he's right about it all being political, there's no end game in sight. What would you propose when no one is willing to forgive the debt?

Also Hollande is no hero, he's been playing the devil's advocate.

I propose default. Say to the other Eurozone members: you can loan us E32bn and we'll be back in 3 years, or you can give us enough liquidity to last six months so we can introduce a new currency and you can wash your hands of us. The latter is better for you and for us.

 

[Nikodemos]

The decision is political. A sacrifice to saving face. It was a massive mistake for Tsipras not to put a grexit in his hand. You might say that it would be undemocratic. But so was ignoring the referendum.

Tsipras is a staunch Europhile. A full-on Grexit was not something he'd even consider and the Troika knew this from the very first day.

This massively weakened his position. Had a Nationalist Eurosceptic been in his place, you can bet the Eurogroup would've been much more accomodating, since they would've known there was no margin of error.

 

[Joni]

Yes, but after that leaked document, wouldn't you say Germany also lost a lot of trust from its (southern) partners? If people in the South were already antagonized towards Germany, this summit only strengthened their case.

If it was only Germany pushing yes, but the German position had the support of 15 countries at one point. That leaves France, Italy, Greece and Cyprus.

Hollande at least from a political perspective gained some respect as someone trying to solve this mess - there were clearly issues between the French and the Germans - and looking beyond the French electorate.

Those issues will easily be solved if Hollande is replaced by Sarkozy again, who belongs to the same EU party as Merkel. The Merkel-Hollande divide is not a Germany-France divide, it is a left-central/right divide with the majority of France leaning more towards Sarkozy and even further right, Le Pen.

 

[elostyle]

Do any economists have an opinion on Greece not pushing through adequate reforms? I think the point regarding the amount of debt has been made ad nauseam. I think on that front it is largely a political issue.

 

[Deleted member 231381]

If it was only Germany pushing yes, but the German position had the support of 15 countries at one point. That leaves France, Italy, Greece and Cyprus.

That's not strictly true. France, Italy and Cyprus have been unconditionally anti-Grexit. Spain, Ireland, Slovenia, Luxembourg, and Portugal have been conditionally anti-Grexit, but anti-Grexit all the same. I don't think the German position was ever supported by more than 9 countries at any given time (including Germany).

 

[Hypnotoad]

Sad state of affairs. I followed SYRIZA for many years, but they totally surrendered, in a way even worse than PASOK. Parliament should stop this "deal", but I doubt they will. It's time to end this farce, better to live in poverty than under endless austerity.

 

[Nikodemos]

Do any economists have an opinion on Greece not pushing through adequate reforms? I think the point regarding the amount of debt has been made ad nauseam.

Kinda hard to properly support reforms when your GDP founders and your budgetary revenue craters due to the austerity programme.

 

[Tugatrix]

Another failed bailout incoming, just delaying the unavoidable

 

[QuicheFontaine]

That the trust fund would be managed from Athens rather than Luxembourg (but probably by the same people, just in a different location).

#frenchdiplomacy

I think that's going to be sold as:

The fund will be fully managed by

Spoiler

some people in

Greece

Spoiler

that answer directly to us

.

 

[Joni]

That's not strictly true. France, Italy and Cyprus have been unconditionally anti-Grexit. Spain, Ireland, Slovenia, Luxembourg, and Portugal have been conditionally anti-Grexit, but anti-Grexit all the same. I don't think the German position was ever supported by more than 9 countries at any given time (including Germany).

Ten countries were considered Grexit ready. But the 15 Comes from the talks of last weekend. See previous topic

 

[Deleted member 231381]

Ten countries were considered Grexit ready. But the 15 Comes from the talks of last weekend. See previous topic

15 was for a different position though [i.e., no E50bn robbery of Greek state assets], and I'm fairly sure it was never 10 - Finland, Latvia, Lithuania, Estonia, Germany, the Netherlands, Belgium, Austria, Slovakia is 9.

 

[nature boy]

If it was only Germany pushing yes, but the German position had the support of 15 countries at one point. That leaves France, Italy, Greece and Cyprus.

Not sure about that. The hardline approach clearly was German led. The whole 50b in a Luxembourg-based IfG was a terrible political move.

(Note: I understand Germany's reluctance to help Greece. But to be so vocal just fuels the anti-germany rhetoric in the South).

 

[EloKa]

Germany took a hardline approach that many felt (rightly or wrongly) went too far - even Der Spiegel thought it was too much. The whole 50 billions in privatizations sounds like a fairytale.

"Der Spiegel" is the same crap like the BILD just for the pseudo wannabe intellectual.
They always try to spread rumours or try to build a special belief if they are not busy with pretending to have Hitlers diaries (again and again).

Yes, but after that leaked document, wouldn't you say Germany also lost a lot of trust from its (southern) partners? If people in the South were already antagonized towards Germany, this summit only strengthened their case. Not to mention the British.

Most EZ countries thought that the greek's propsals were definately not sustainable. (basically all without france and cyprus). It's easy to hate on a single target and forget that almost everyone in europe thought that those old propsals were not good enough to change anything.

But yeah, giving greece a helping hand even tho still more than half of europe things that Greece should leave: those must be the bad guys.

 

[mrklaw]

Writing down Greek debt just seems like it would lead to either significant bad feeling from other under-performing euro economies, or potentially setting a dangerous precedent for countries with problems in the future.

Without that, Greece is screwed whether they stay in or leave the Euro.

 

[PdotMichael]

The referendum basically gave Germany the option to bring a possible Grexit on the table - something you would have expected Tsipras would do.

But Tsipras is just a little school boy who failed to archive anything within Greece or Europe.

 

[EloKa]

15 was for a different position though [i.e., no E50bn robbery of Greek state assets], and I'm fairly sure it was never 10 - Finland, Latvia, Lithuania, Estonia, Germany, the Netherlands, Belgium, Austria, Slovakia is 9.

They only countries that were officially "against a Grexit" were:
France
Cryprus
Greece
(and Italy, which turned out to be "so so" against it)

Every other country demanded a Grexit, didn't care or just kept nodding.

 

[Napalm_Frank]

See you in a few years folks! Can't say I'm shocked they reached the same conclusion... again.

The deal will pass the Greek parliament I have no doubt about that. I hope the Greek people enjoy the fruits of Tsirpas's 19'th dimensional Shogi plays.

 

[John Bender]

This has to be a joke. They are still in?
86 billion €?

What a hilarious joke.....

 

[Theonik]

15 was for a different position though [i.e., no E50bn robbery of Greek state assets], and I'm fairly sure it was never 10 - Finland, Latvia, Lithuania, Estonia, Germany, the Netherlands, Belgium, Austria, Slovakia is 9.

Many of these positions are affected by the German stance, some of them even claimed to be in a firm Grexit position no matter what but when Germany moved they followed. They have no actual voice in this matter.

Tsipras is a staunch Europhile. A full-on Grexit was not something he'd even consider and the Troika knew this from the very first day.

This massively weakened his position. Had a Nationalist Eurosceptic been in his place, you can bet the Eurogroup would've been much more accomodating, since they would've known there was no margin of error.

It was still a mistake not to prepare for the ultimate scenario. His optimism and good faith was his undoing.

 

[jakonovski]

Varoufakis should've just changed his name to Varoufuckit and gone into the negotiations, fists swinging.

 

[mnz]

I don't understand this 50bn fund, that amount is impossible for a country like Greece. Compared to GDP, that would be about €800 billion in Germany or €3.5 trillion in the US. Are they going to sell every pencil in their government buildings?

 

[jakonovski]

This "plan" was originally just an insult to humiliate Greece and now it somehow became a real thing. I predict that it will fail before it even really begins. The only thing now is if the Greek parliament finds its spine and rejects this madness.

 

[Theonik]

It is also important to note that even if these bailouts were not completely moronic and economically unsound, the amount of pessimism they have attracted will auto-doom any such bailout attempt. Simply speaking, no investor will put money in Greece when they believe they will not recover. In Greece itself, the economy cannot function in this climate of negativity.

I don't understand this 50bn fund, that amount is impossible for a country like Greece. Compared to GDP, that would be about €800 billion in Germany or €3.5 trillion in the US. Are they going to sell every pencil in their government buildings?

They have well beyond that amount in property. The stuff they sold for pittance in the previous privatisations would have pre-crisis market prices higher than this.

 

[norinrad]

This "plan" was originally just an insult to humiliate Greece and now it somehow became a real thing. I predict that it will fail before it even really begins. The only thing now is if the Greek parliament finds its spine and rejects this madness.

I think it will pass only if the US starts threatening ministers behind closed doors.

 

[danthefan]

This whole situation is disgusting.

Syriza are an absolute joke and Europe have decided to smack down the country on the basis of this, and who are going to suffer (hugely) are the Greek people.

How the fuck do the EU still think crippling austerity is the way forward?

Fuck.

 

[hal9001]

I hope they reached a sensible deal that can bring Greece back on track and force the Eurozone even closer together in a political/fiscal union.

No thanks.

 

[Napoleonthechimp]

Varoufakis should've just changed his name to Varoufuckit and gone into the negotiations, fists swinging.

When you're operating from a position of weakness you don't go into negotiations "fists swinging".

 

[Tugatrix]

This whole situation is disgusting.

Syriza are an absolute joke and Europe have decided to smack down the country on the basis of this, and who are going to suffer (hugely) are the Greek people.

How the fuck do the EU still think crippling austerity is the way forward?

Fuck.

Old Idea that policitians can't admit mistakes because that make them look weak

 

[Theonik]

No thanks.

Gotta keep the Portuguese and Spanish in line. There is something interesting to note about the countries who side with Greece, namely Italy. Normally you would expect Portugal and Spain being in pretty much the same vortex of shit with Greece would be supportive. But both of them have national elections coming this year with Spain having a strong anti-austerity party at play. Their position is influenced by this fact and will factor weakening anti-austerity sentiment more than helping Greece and potentially their own countries to crawl from the shit.

 

[danthefan]

Old Idea that policitians can't admit mistakes because that make them look weak

You're probably right.

It's so infuriating though.

 

[Joni]

15 was for a different position though [i.e., no E50bn robbery of Greek state assets].

Not sure about that. The hardline approach clearly was German led. The whole 50b in a Luxembourg-based IfG was a terrible political move.

It was the position that starting the negotiations based on the Greece proposal was not even worth the trouble.

I'm fairly sure it was never 10 - Finland, Latvia, Lithuania, Estonia, Germany, the Netherlands, Belgium, Austria, Slovakia is 9.

Slovenia, Estonia, Germany, Slovakia, Finland, Lithuania, Latvia, Belgium, Austria, Netherlands.

No thanks.

So you like the current situation? Europe is worthless without the union.

 

[1.21Gigawatts]

Sad state of affairs. I followed SYRIZA for many years, but they totally surrendered, in a way even worse than PASOK.

I think there was no other way. Greece lived beyond their means for years and they have to significantly lower their standard of living, there is no other other opion. The question was if they're going to do that with the euro or without the euro. Dropping out of the euro would've certainly been even worse for greece.

I think many greeks haven't fully understood that yet. I could see this causing a lot of trouble in greece going forward because no one is happy to lower their standard of living, especially in a situation like this were the blame lies with a lot of things but not the individual people in greece.

Its like when you have a job that pays 2000€ a month but you spent 3000€ a month for over a decade, and then suddenly you are required to live of 1000€ a months to pay of the accumulated debt.
Not paying the debt back(Grexit) is not a smart option either because you'll lose your job if you do that and then you don't even have the 1000€ a month.


I still think this whole thing was a debacle of epic proportions, I'm especially mad at germany for acting like they did. Disgusting, had nothing to do with the european idea and the solidarity they always talk about.

 

[Vorg]

This whole situation is disgusting.

Syriza are an absolute joke and Europe have decided to smack down the country on the basis of this, and who are going to suffer (hugely) are the Greek people.

How the fuck do the EU still think crippling austerity is the way forward?

Fuck.

Yeah this. I'm going to do my part and boycott/avoid at any cost to buy anything made in Germany. Seriously fuck off Europe.

 

[Kabouter]

Really disappointed by this. I would much rather have seen a Greek exit from the EU followed by humanitarian aid. This deal is brutal and solves absolutely nothing, and is severely harmful to the future prospects of the EU.

 

[mnz]

Yeah this. I'm going to do my part and boycott/avoid at any cost to buy anything made in Germany. Seriously fuck off Europe.

You have about 15 other countries to boycott as well.

 

[Hrothgar]

Really disappointed by this. I would much rather have seen a Greek exit from the EU followed by humanitarian aid. This deal is brutal and solves absolutely nothing, and is severely harmful to the future prospects of the EU.

Same, we'll be back in three years to throw another 80 billion at the bottomless pit, just because of this warped ideal that everyone has to stay in the Eurozone at all cost. This is not going to help Greece, it will just prolong the bleeding.

 

[Deleted member 231381]

It was the position that starting the negotiations based on the Greece proposal was not even worth the trouble.


Slovenia, Estonia, Germany, Slovakia, Finland, Lithuania, Latvia, Belgium, Austria, Netherlands.

Most sources I've read cited Slovenia as ambivalent rather than pro-Grexit.

 

[jorma]

And the public asset looters win again.

Btw, that electric company and the (air)ports that were to be sold off, are those assets to be part of the collateral now, or just extra dressing on top?

 

[1871]

I think there was no other way. Greece lived beyond their means for years and they have to significantly lower their standard of living, there is no other other opion. The question was if they're going to do that with the euro or without the euro. Dropping out of the euro would've certainly been even worse for greece.

I think many greeks haven't fully understood that yet. I could see this causing a lot of trouble in greece going forward because no one is happy to lower their standard of living, especially in a situation like this were the blame lies with a lot of things but not the individual people in greece.

Its like when you have a job that pays 2000€ a month but you spent 3000€ a month for over a decade, and then suddenly you are required to live of 1000€ a months to pay of the accumulated debt.
Not paying the debt back(Grexit) is not a smart option either because you'll lose your job if you do that and then you don't even have the 1000€ a month.


I still think this whole thing was a debacle of epic proportions, I'm especially mad at germany for acting like they did. Disgusting, had nothing to do with the european idea and the solidarity they always talk about.

It's not about a luxurious standard of living. The Greek economy was growing at 4+% before the 2008 crisis.

 

[Nikodemos]

snip

You do know that, while prices in Greece are about 25% lower than in Germany, the average Greek earns about 40% of what the average German does? It's what tends to occur in a monetary union: prices for goods (especially those produced by trans/multinational companies) move towards parity.

 

[Theonik]

And the public asset looters win again.

Btw, that electric company and the (air)ports that were to be sold off, are those assets to be part of the collateral now, or just extra dressing on top?

No. Those are getting sold as planned. The 50bn is in additional things to be looted for the plutocrats and bankers to fuck around with knowing full well that they will be reimbursed when the 4th bailout comes.

 

[Vorg]

You have about 15 other countries to boycott as well.

Including my own country. But we already had a shit 4 years with austerity, more unemployment, destroyed middle class. 2 out of a total of 10 million under the poverty line. Mass emigration. For nothing. Solution? More austerity.

 

[KingSnake]

Stop hiding behind the 10 or 15 countries. Germany made the proposals and Germany fought for them to the end. Except for Finland's extremists, the others are just yesmen.

This is Germany's will and it's an awful deal that solves nothing but making some getting richer by buying some Greek assets for almost nothing. It will be interesting to follow on whom those will be.

As for Greece, it will only make the situation worse in every aspect. More debts, more austerity, less income sources, lower GDP.

I hope Portugal, Italy and Spain are already working on contingency plans.

 

[kiguel182]

It probably won't solve anything long term. Still better than being out of the euro I guess.

The Eurozone still needs serious reforms before any of the poor countries gets any chance of growth or else we will be seeing this more and more and it's far from sustainable long term.

 

[Hypnotoad]

I think there was no other way. Greece lived beyond their means for years and they have to significantly lower their standard of living, there is no other other opion. The question was if they're going to do that with the euro or without the euro. Dropping out of the euro would've certainly been even worse for greece.

I think many greeks haven't fully understood that yet. I could see this causing a lot of trouble in greece going forward because no one is happy to lower their standard of living, especially in a situation like this were the blame lies with a lot of things but not the individual people in greece.

Its like when you have a job that pays 2000€ a month but you spent 3000€ a month for over a decade, and then suddenly you are required to live of 1000€ a months to pay of the accumulated debt.
Not paying the debt back(Grexit) is not a smart option either because you'll lose your job if you do that and then you don't even have the 1000€ a month.


I still think this whole thing was a debacle of epic proportions, I'm especially mad at germany for acting like they did. Disgusting, had nothing to do with the european idea and the solidarity they always talk about.

I lived in Greece during the "golden years" around 2000. It was nice, credits were available en masse, and yes, lots of people were living over there means. Still, what has happened since 2008 is more than a tragedy, it's a travesty. Those who suffer now, the younger people, are those who are much better educated than any other generation before, full of ambition and potential. Greece foremost needed - and needs - reforms on the capacity of the state to act and actually do efficent work. Austerity mixed with a non-working state-apparatus is what killed the economy. And now even state enterprises that turn a profit will be targeted for sell-off.

I could write loads of stuff about Tsipras, since I have met him several times while doing interpretation work, back when SYRIZA was just Synaspismos and around the 5%-mark. Needless to say, it's a mixture of anger and pity to see the low point he and his party have reached the last week.

 

[EloKa]

Stop hiding behind the 10 or 15 countries. Germany made the proposals and Germany fought for them to the end. Except for Finland's extremists, the others are just yesmen.

This is Germany's will and it's an awful deal that solves nothing but making some getting richer by buying some Greek assets for almost nothing. It will be interesting to follow on whom those will be.

And this is why greece lost much of its trust in EU.

 

[Dilly]

Yeah this. I'm going to do my part and boycott/avoid at any cost to buy anything made in Germany. Seriously fuck off Europe.

Good luck with that.

 

[kiguel182]

Stop hiding behind the 10 or 15 countries. Germany made the proposals and Germany fought for them to the end. Except for Finland's extremists, the others are just yesmen.

This is Germany's will and it's an awful deal that solves nothing but making some getting richer by buying some Greek assets for almost nothing. It will be interesting to follow on whom those will be.

As for Greece, it will only make the situation worse in every aspect. More debts, more austerity, less income sources, lower GDP.

I hope Portugal, Italy and Spain are already working on contingency plans.

Portugal already applied it's austerity plan and it's now more on a safe zone. Altought we will probably fall again eventually.

If/when Italy starts needing money I hope Germany sees it as a wake up call to start changing it's policies.