We once (must've been five years ago) talked about Greece selling its islands in order to get money in Politics/Economics class. My German classmates looked me right in the eyes and without even thinking for a second said: "Anything to pay your debt."
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Greece has no money to pay the IMF, default imminent
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We once (must've been five years ago) talked about Greece selling its islands in order to get money in Politics/Economics class. My German classmates looked me right in the eyes and without even thinking for a second said: "Anything to pay your debt."
Someone mentioned Ireland on the previous page, I certainly don't want Ireland to leave the EU. The global economic downturn would have hurt a lot anyway but the likes of Anglo Irish and AIB, there's nobody external to blame for those, was our own fault.
Things have improved massively, the unemployment rate has gone from over 15% below 10% and is dropping every single month and the economy is clearly growing again.
Things have improved massively, the unemployment rate has gone from over 15% below 10% and is dropping every single month and the economy is clearly growing again.
Frankfurter
Member
I don't even know where people get these ideas from. Ireland leaving the EU (because the UK leaves?) would be an extremely risky move for what expected gain? That trade between Ireland and the UK would pick up because sth. sth.?
Interestingly enough Greece was back on a more or less stable growth path just before Syriza came into office.
(I agree that the kind of austerity imposed on Greece was too much btw.)
Piecake said:
Interestingly enough Greece was back on a more or less stable growth path just before Syriza came into office.
(I agree that the kind of austerity imposed on Greece was too much btw.)
My favorite quote from the german anti-SYRIZA media. So stagnation, reaching the bottom of the barrel, is 'more or less stable growth' now? And how exactly would SYRIZA fuck it up so quickly after not even a year?
Frankfurter
Member
Greece grew three quarters in a row in 2014 (QoQ), and those growth rates were pretty solid (0.8%, 0.3%, 0.7%, non annualized). There is no way to spin these quarters as "stagnation".
How would Syriza not be able to fuck things up? Do you think the current state of the negotiations don't hurt Greece's economy? I'm absolutely not saying this is all Greece's fault btw., but it's just really obvious that this kind of insecurity (that is: in terms of what will happen to Greece in the coming months and years) hurts the Greek economy.
90TilInfinity
Member
Risky, but I think it'll pay off for you (eventually). The perceptual implications of the single currency and the notion of the Union itself are potentially too great (e.g. Russian & Chinese investment in an independent Greece) for a Grexit.
Someone bought into the anti-SYRIZA hatred I see. Die verschwenden unsere Steuergelder!
I find the idea particularly funny that SYRIZA fucked things up even before they got into office, seeing as the GDP sank to -0.2 again before they could ever take office. Apart from that, why shouldn't the growth rates rise to 'solid' 0.7-0.8 percent in the year the government privatized profitable public sectors and starts selling oil pumping licenses for ridiculous prices?
Either way, some good old fashioned reading and maths will always help out to see the cold hard truth. Because even when Greece sold out, the "positive growth came back! Austerity works!" theory is heavily criticized among academics for the same reason this professor elaborates wonderfully on his blog.
The numbers simply don't add up. Even if SYRIZA was the second coming of jesus, you'd have to wait quite a bit of time more to see positive growth in greece. After all, austerity measures caused one of the worst economic recessions in the history of recorded economics. This might also interest you.
PdotMichael
Banned
Ignoring the random anti-Germaby rhetoric although the mainstream media are for more help for Greece but whatever.
http://greece.greekreporter.com/201...-how-the-greek-economy-plunged-in-six-months/
Everything is completly unrelated to SYRIZA, of course.
http://greece.greekreporter.com/201...-how-the-greek-economy-plunged-in-six-months/
Everything is completly unrelated to SYRIZA, of course.
Hasphat'sAnts
Member
You realize what a default could do to the Eurozone, right?
PdotMichael
Banned
RIP foreign investments for Greece
They will never get money again from the free market. Maybe some of the radical left wing politicans hope they can become Putin's new darling.
Ether_Snake
å®å®å®å®å®å®å®å®å®å®å®å®å®å®å®
That's false. Even Argentina still gets investments. Everything is just a question of risk VS reward. If Greece has its own currency, it will be very cheap, which is useful to start the healing process, unless the Euro countries try to actually damage Greece to prevent it from being an example to follow if the recovery takes place.
PdotMichael
Banned
Every country in Europe is doing this. We in the Netherlands went from 18 to 19 to 21 and will be getting 25% soon. this all within a couple of years IIRC.
You can't do anything else if your IRS are a bunch of incompetent idiots that can't tax rich people and corporations. So then you hit on the normal man who has to buy a bike for his daughter.
Yeah, that wasn't happening.
Besides, the whole discussion is reaching absurd levels. Greece is running primary surpluses, which is more than you can ask in that situation, and the monetary value of the debt that could be realistically be repaid by austerity is orders of magnitude less than the damage that grexit could inflict on the eurozone.
All the troika austerity program did was push the GDP down. At this point, somebody should goddamn own up to it's own mistakes.
And "There were no mistakes" blah blah: The IMF admitted as much.
Pictured: IMF's own projections, reality:
At this point, not admitting that the austerity measures failed wholesale is nothing more than peddling smoke and mirrors for gold. But victors write history, and that's what we're getting.
Also, Greece has a primary Surplus.
That means that if they defaulted, they would have more money. Realistically, defaulting is a good option.
The thing is, the EU is holding Greece's banking system hostage. Before any grexit, the ECB would stop doing it's established role of, well, printing money - and trigger the mother of all bank runs.
More like related to the EU's reaction to syriza. Hard to have much faith when somebody is talking about intentionally crashing the banking system you're supposed to have faith in.
Cry all you want but face the facts that austerity in times of economic troubles is insane, all the right wingers are riding their Ego dickface façade train right into a fucking wall. Destroying the lives of millions just to keep their smug faces from having to give in to being utter morons.
The numbers are there people you can look them up, capitalism masturbating the rich for eternity is one thing but then blaming the poor when there is only watery sperm coming out of your bananas is hilarious.
The numbers are there people you can look them up, capitalism masturbating the rich for eternity is one thing but then blaming the poor when there is only watery sperm coming out of your bananas is hilarious.
Hasphat'sAnts
Member
At this point, I fail to see how things could get materially worse for Greece if they defaulted.
This whole thing was, is, and always will be about the Eurozone.
This whole thing was, is, and always will be about the Eurozone.
Don't take my opinion seriously enough to debate me if I'm wrong, because Im not the most econ literate person, (but please continue to enlighten me) but isnt that one of those principles that works more in theory than in practice? Greece is already broke right now...theyre a bad investment already. And it's a country in a real world situation. Not a person with a credit score and an automated decision system. A Greece with a blank (tarnished) slate is more appealing to invest in than one that is in an infinite sprial into abyss and can't pay back the IMF...but I don't know. Can we look at any examples in history of countries that defaulted?
Ah...and please explain the impact this will have on the eurozone so I can get on your page?
Hasphat'sAnts
Member
Put simply, Greek exit opens the door for other countries to exit, causing a huge amount of liquidity and interest rate stress on existing Eurozone members.
If Greece leaves, everyone in the Eurozone will feel the credit tightening, leading to more calls for exit.
It's a self fulfilling prophecy.
If Greece leaves, everyone in the Eurozone will feel the credit tightening, leading to more calls for exit.
It's a self fulfilling prophecy.
Frankfurter
Member
I can't figure out what this is supposed to mean?
The fact that Syriza was forecasted to take control of the government, in combination with what its leaders said pre-election might have very well led to negative expectations in terms of Greece's future development*, which in turn can reduce (or delay) originally planned investment (Pdotmichael's post seems to be a nice example that this actually happened).
* Btw. not necessarily because businesses thought it's a bad idea for the Greek economy per se, but could also be because of the implications this would have for the relationship between Greece and its debtors (which Greece is dependent on).
Aureon said:
It WAS happening. Q1 2014 0.8%, Q2 2014 0.3%, Q3 2014 0.7%.
I don't know why you respond to my post with all that other stuff. It doesn't have much to do with my post.
PdotMichael
Banned
I don't see any countries which would want to leave the Eurozone - not even Greece wants it.
And even a default and exit would only push Greece into an even worse dependence on the IMF and EU members to provide Greece at least with a minimum amount of capital.
Yeah, who can blame the rich Greeks who are trying everything to get their money out of Greece now?
And even a default and exit would only push Greece into an even worse dependence on the IMF and EU members to provide Greece at least with a minimum amount of capital.
Yeah, who can blame the rich Greeks who are trying everything to get their money out of Greece now?
So even though austerity wasnt working and it was crippling their economy and impoverishing their people they just needed to do it more? They simply needed to do it longer, even though they had been doing it for 6 years without any success?
What fantastic logic. We have been doing severe austerity for 6 years. It hasnt been working, but that only indicates that we need to do it harder and do it more! I am sure it will work then!
No it wasnt. It was in a debt spiral that it couldnt get out of
Bounceback after a 20% GDP loss, and sub-inflation growth is a success?
I can't see any circumstance under which it would happen so no big deal.
Frankfurter
Member
I said Greece was on a growth path and it was. Spin that all you want.
PdotMichael
Banned
Now, you have not even that anymore.
I saw it posited that Ireland could leave if the UK were to vote to leave the EU.
PdotMichael
Banned
But then Ireland would be an even more important trading partner if they stay in the Eurozone.
So I was just watching on ERT (Greece's public broadcaster, broadcasting in Cyprus) that it will be reported by a German newspaper tomorrow that the the Greek goverment, Juncker, Merkel agreed on a deal where the lower pension cuts were replaced by cuts in military spending but the IMF tanked the deal. It's annoyance wasn't just directed towards Greece but also on the European side, for sidelining its role.
ETA: It's the German newspaper FAZ. Original http://www.faz.net/aktuell/politik/...ission-und-iwf-in-schuldenkrise-13645504.html
Google translate english https://translate.google.com/transl...chuldenkrise-13645504.html&edit-text=&act=url
ETA: It's the German newspaper FAZ. Original http://www.faz.net/aktuell/politik/...ission-und-iwf-in-schuldenkrise-13645504.html
Google translate english https://translate.google.com/transl...chuldenkrise-13645504.html&edit-text=&act=url
The funny thing, and the level of dishonesty from Joni we are talking about: Tsipras was and is willing to do more austerity. Even though his goverment correctly call it as bad policy. He just tries to limit it to some extend. He can be criticized for bad strategy possibly, but not for his compromising position being too extreme. However it will be rather dishonest to see the demands imposed on Greece as a force of nature and not as vastly irrational, immoral and harmful and that have people behind it. If you incredibly harm an already destroyed economy due to the first goverment that doesn't say yes to all, then I can't see how those who are doing that, aren't responsible for it.
It's been mentioned in this thread but there is zero appetite in Ireland for leaving the EU so it's not going to happen.
http://www.ft.com/cms/s/0/a8e1e728-0b05-11e5-98d3-00144feabdc0.html#axzz3cy3dz02d
I think this nicely states the idiocy of austerity and is a good counter-argument to the simple analysis that blames everything on syriza or claims that a few quarters of positive economic growth means sustained economic growth while ignoring other crucial aspects like increasing debt, unemployment, deflation, and asset liquidation.
PdotMichael
Banned
The problem with Greece and going full Keynesian economics is to sell it to the Eurozone members which do have a significant lower GDP per capita than Greece. And how inefficient the tax system is which make it possible that companies and rich Greeks don't or barely pay taxes. It's strange how a left goverment doesn't do anything in that regard.
Right now, any investment will only lead in a bloated national budget again.
Right now, any investment will only lead in a bloated national budget again.
Austerity and the EU's demands on Greece is undermining Syzira's attempts at structural reform.
I also think it is rather absurd that a country need to sell the idea to other countries that it should adopt standard and accepted macroeconomic policies. I think that is a pretty clear indication that the EU either did not look at this problem from a purely macroeconomic perspective, but perhaps more of a moralistic or special interest focus.
PdotMichael
Banned
Which ones? Syzira did a pretty poor performance at showing alternative concepts.The shipping companies still have the freedom to do whatever they want.
Greece is trying to please the EU so it can get money to continue functioning as a current government and do things that are actually politically possible on their end as well. In this environment, do you really think that significant structural reforms are possible? That was what the letter was talking about, that austerity and EU demands are making structural reforms more difficult because the EU is still bowing to the God of austerity, which is not in the best interest of Greece. The letter makes it very plain that austerity and structural reforms are two separate things.
I mean, if you just read a line down, the letter can explain itself
"Austerity drastically reduces revenue from tax reform, and restricts the space for change to make public administration accountable and socially efficient. And the constant concessions required by the government mean that Syriza is in danger of losing political support and thus its ability to carry out a reform programme that will bring Greece out of the crisis"
PdotMichael
Banned
And with getting more money, the pressure for such reforms would get smaller and it will be even harder to do such structural reforms. There is a reason why nothing happened in the good old times in that regard.
Doing such things is obviously not easy but doesn't excuse the completly lack of such reforms from Syzia and previous governments.
Doing such things is obviously not easy but doesn't excuse the completly lack of such reforms from Syzia and previous governments.
This Greece shit is getting really tiresome, I totally agree that EU side is being stupid with the austerity (didn't work the first time, own up to it), however, what reforms has Syzira shown so far? Has Syzira come upconcrete plans, outlines, programs on how to deal with the crisis, or did they just xerox their campaign promises and threw that on the table?
Not really. I don't think anyone is under the delusion that the money will save Greece. This money is simply a stop-gap measure to buy Greece time so that it can save itself.
As for your second point
http://www.smh.com.au/business/alex...-syrizas-reform-promises-20150405-1metd8.html
http://www.ft.com/intl/cms/s/0/8b60be34-bc38-11e4-b6ec-00144feab7de.html#axzz3cy3dz02d
I think you have a very naive view of politics. It would be an absolute miracle if Syzira was able to produce reforms this quickly. Reforms take time. The first thing that needs to be done is to understand the exact situation to know what should be reformed. Going by the first article, that is no mean feet in Greece. Next is developing a plan and then pushing that plan through government and all of its various interests. Syzria also has to contend with the EU and their demands. And somehow you expect something so major to happen in a few months? That is just insane. Greece isnt ruled by an all powerful dictator.
Hell, do you know how long the US has been wanting to do tax reform? For a long long time and nothing has come from it. Why? Special interests and politics. While Greece has a much better reason to do tax reform currently, their political situation is also a lot worse than the US.
Giant Panda
Member
Syzira was mostly just reversing previous attempts at reform. They were supporting populist economic policies, not sensible ones.
austerity reforms arent sensible. They are downright idiotic.
However, that was what they were elected for. The Greek people have been suffering pretty horribly under the previous economic measures. The actual human toll being inflicted by austerity was far too much for the country to stomach any longer. Greece is the country that has actually been suffering through all of this. It was perfectly understandable for the populace as a whole to reject the existing plan. Putting the well-being of their own country's people ahead of the economic interests of foreign investors is a completely reasonable stance for a government to take.
Giant Panda
Member
Reform isn't austerity though. Reducing the size of their inefficient public sector, making labor laws more flexible, etc. is reform.
Syrzia may have had their people's interests first, but that doesn't mean they know how to make those interests a reality.
Before that happens, there will be a shift on the economy due to the rising on the machines doing most of the work and people having nothing to do so no money to sustain themselves.
I guess the main question in my mind is, "Why shouldn't Greece default? Why should they care if it hurts their debtors, harms EU cohesiveness, or sends a bad message to Italy?"
As a layman, it seems to me that Greece defaulting on (most of?) their debt might be a reasonable course of action from their perspective, and perhaps from everybody's. It seems like Greek took out a bunch of loans that they have no realistic chance of repaying, and now they have two choices: keep trying to pay them back (see: definition of insanity), or admit that they can't pay them back. It seems like they've given option one a fair chance to work, and it might be past time to move on to option two. Is there another option I've missed?
(Perhaps they haven't done enough yet to plug the holes in their tax-collection apparatus? Would doing that fix the problem? If so, they definitely need to get on that.)
It seems like a default could really help Greece. (Again, from my non-expert perspective.) Not having those huge debt/interest payments would free up a bunch of capital to reinvest in and grow their economy, right? Would Greece's economy be a going concern if they didn't have to make those payments? Or is it just doomed for all time?
It seems like the standard "argument" against default is that it would damage/destroy the EU in one way or another. Slippery slope, domino effect, "unthinkable", all that stuff. But even if that's true, I'm not seeing why that changes the calculus for Greece. That's not really their problem. Or at least not their most pressing problem. If a Greek default would be catastrophic for the rest of Europe, well, then that's clearly a problem that Europe needs to deal with. (Perhaps by bailing Greece out.) If "the EU" thinks that a Greek default would be worse than Greek debt forgiveness, then perhaps it's in their interest to forgive those loans.
But instead, if they (the EU, the banks, the IMF, "the Man") think that forgiveness (and the message it potentially sends) would be worse than a default, then clearly, a Greek default is a better outcome, right?
A default is clearly not a great outcome for anybody, but is it perhaps the best one available? (Especially from a "selfish" Greek perspective?)
As a layman, it seems to me that Greece defaulting on (most of?) their debt might be a reasonable course of action from their perspective, and perhaps from everybody's. It seems like Greek took out a bunch of loans that they have no realistic chance of repaying, and now they have two choices: keep trying to pay them back (see: definition of insanity), or admit that they can't pay them back. It seems like they've given option one a fair chance to work, and it might be past time to move on to option two. Is there another option I've missed?
(Perhaps they haven't done enough yet to plug the holes in their tax-collection apparatus? Would doing that fix the problem? If so, they definitely need to get on that.)
It seems like a default could really help Greece. (Again, from my non-expert perspective.) Not having those huge debt/interest payments would free up a bunch of capital to reinvest in and grow their economy, right? Would Greece's economy be a going concern if they didn't have to make those payments? Or is it just doomed for all time?
It seems like the standard "argument" against default is that it would damage/destroy the EU in one way or another. Slippery slope, domino effect, "unthinkable", all that stuff. But even if that's true, I'm not seeing why that changes the calculus for Greece. That's not really their problem. Or at least not their most pressing problem. If a Greek default would be catastrophic for the rest of Europe, well, then that's clearly a problem that Europe needs to deal with. (Perhaps by bailing Greece out.) If "the EU" thinks that a Greek default would be worse than Greek debt forgiveness, then perhaps it's in their interest to forgive those loans.
But instead, if they (the EU, the banks, the IMF, "the Man") think that forgiveness (and the message it potentially sends) would be worse than a default, then clearly, a Greek default is a better outcome, right?
A default is clearly not a great outcome for anybody, but is it perhaps the best one available? (Especially from a "selfish" Greek perspective?)
It is obvious you haven't read my post, or skimmed it at best. I won't honour that with a response.
Coriolanus
Banned
From trading economics.
Heeey, look at that, it's almost as if that minor spike above 0% growth was immediately preceed by a period where they didn't fucking decrease government spending. Also, isn't it weird how those vertiginous falls in gdp growth follow vertiginous cuts in spending?
I could be reading it wrong, obv.
Heeey, look at that, it's almost as if that minor spike above 0% growth was immediately preceed by a period where they didn't fucking decrease government spending. Also, isn't it weird how those vertiginous falls in gdp growth follow vertiginous cuts in spending?
I could be reading it wrong, obv.
Why doesn't Greece default?
Because the ECB is holding it's banking system head over barrel.
As it stands, if Greece signals the will to default, the ECB will likely refuse to fulfill the very reason it was created for, and force Greece out of the Euro along with the default.
This is likely not a problem.
The issue is that without cooperation from the ECB and all, the exit will be preceded by the greatest bank run known to man.
Also, it should be DULY noted that at the moment, and for the last few years, Greece has ran primary surpluses - that means, it's spending less than it's earning - if it defaulted on all it's debt, it would suddenly have about 5% more money to spend.
What should be done right now is actually the sacking of every single politician that has peddled austerity in the last five years, since the data speaks quite clearly in favor of countercyclical policy.
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