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[Coriolanus]

From Reuters:

Greek lawmakers on Sunday authorized Prime Minister Alexis Tsipras' proposed July 5th bailout referendum, setting Greece on course for a plebiscite that has enraged international creditors and increased Greece's chances of exiting the euro zone.

The government easily passed the 151-vote threshold needed to authorize the referendum, with deputies from the far right Golden Dawn voting with the government and pro-European opposition parties New Democracy, Pasok and To Potami and the KKE Communist Party voting against.

Greeks are due to vote on whether to accept or reject the latest terms offered by creditors to Athens in order to unlock billions of euros in bailout funds.

European partners have reacted negatively to the announcement of the referendum. On Saturday, they rejected a request by Tsipras to extend the current bailout in order to cover the period leading up to the referendum. The rejection means Athens is likely to default on a key payment to the International Monetary Fund on Tuesday.

What will happen wednesday, when the current bailout extension runs out? It is a mystery.

Please try to avoid the general fallacies pertaining to "lazy dirty smelly greeks, they didn't do nothing" and that sort of thing.
----

Resources:

Guardian Eurozone Crisis Live Coverage
My favourite way to stay up to date with the latest events.

Where did all the greek bailout money go?
Well-sourced article explaining it.

How did we get to this point, ffs?
Krugman warning on that one.

 

[Ether_Snake]

Krugman just wrote a piece that goes right in line with what I have been saying:

Europe’s Moment of Truth

Until now, every warning about an imminent breakup of the euro has proved wrong. Governments, whatever they said during the election, give in to the demands of the troika; meanwhile, the ECB steps in to calm the markets. This process has held the currency together, but it has also perpetuated deeply destructive austerity — don’t let a few quarters of modest growth in some debtors obscure the immense cost of five years of mass unemployment.

As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.

THAT has been the goal of the Troika since Syriza won: to make them lose face, and send a clear message to the rest of Europe that austerity is not a choice, and that any party that is anti-austerity won't survive being elected.

It seems to me that the troika — I think it’s time to stop the pretense that anything changed, and go back to the old name — expected, or at least hoped, that Greece would be a repeat of this story. Either Tsipras would do the usual thing, abandoning much of his coalition and probably being forced into alliance with the center-right, or the Syriza government would fall. And it might yet happen.

But at least as of right now Tsipras seems unwilling to fall on his sword. Instead, faced with a troika ultimatum, he has scheduled a referendum on whether to accept. This is leading to much hand-wringing and declarations that he’s being irresponsible, but he is, in fact, doing the right thing, for two reasons.

First, if it wins the referendum, the Greek government will be empowered by democratic legitimacy, which still, I think, matters in Europe. (And if it doesn’t, we need to know that, too.)

Second, until now Syriza has been in an awkward place politically, with voters both furious at ever-greater demands for austerity and unwilling to leave the euro. It has always been hard to see how these desires could be reconciled; it’s even harder now. The referendum will, in effect, ask voters to choose their priority, and give Tsipras a mandate to do what he must if the troika pushes it all the way.

If you ask me, it has been an act of monstrous folly on the part of the creditor governments and institutions to push it to this point. But they have, and I can’t at all blame Tsipras for turning to the voters, instead of turning on them.

There, I'm not crazy if Krugman says today what I've said since yesterday.

But my belief is that Tsipras knows people will likely vote yes, and that even when he comes back with their proposal signed the Troika will find all the excuses in the world to reject it, because as Krugman says, they don't want such parties to be supported under any circumstance. They want no precedent to be set in favor of such parties. But either way things go, people will know that Syriza were the best placed party to deal with this situation, and this will confirm that Podemos and other anti-austerity parties are the best line of defense countries have. Even if they can't have what they wanted, a vote for pro-austerity parties would simply be capitulation.

So what I see is a victory against austerity, and I think the Troika is freaking out over the referendum precisely because they know this is going to embolden anti-austerity parties whether it's yes or no.

 

[Windom Earle]

I swear they forgot about this little detail that happened today...

So what I see is a victory against austerity, and I think the Troika is freaking out over the referendum precisely because they know this is going to embolden anti-austerity parties whether it's yes or no.

Crazy talk. Tsipras done goofed.

 

[Durante]

This has really illustrated to me just how degenerate the political process is in the EU. Our finance minister told the press that "He [Varoufakis] answered me: If the referendum has a positive result, he'll immediately sign the agreement" -- so far so good. But our minister followed this up by saying that he considers this a "very strange approach".

Apparently, letting the people decide on the future of their country is a very strange approach in Europe in 2015.

 

[PumpkinSpice]

It's certainly not my choice, but I kinda hope they vote no. Europe needs structural change and continuing this ridiculous bailout with forced economic suicide mantra needs to go.

It'd be a messy few years with a switch back to their own currency but it's been a messy few years; having actual monetary policy to work with their economy would go a long way to helping Greece recover and rebuild.

 

[bobbytkc]

a referendum is all well and good before they default, but to come after they cannot pay their bills?

 

[Wafflecakes]

This has really illustrated to me just how degenerate the political process is in the EU. Our finance minister told the press that "He [Varoufakis] answered me: If the referendum has a positive result, he'll immediately sign the agreement" -- so far so good. But our minister followed this up by saying that he considers this a "very strange approach".

Apparently, letting the people decide on the future of their country is a very strange approach in Europe in 2015.

Ummm.... they have been on the end of oblivion for months now, and the have a referendum AFTER THE BILL IS DUE?

Current ruling party is made up of incompetent morons.

 

[Coriolanus]

a referendum is all well and good before they default, but to come after they cannot pay their bills?

They haven't been able to pay their bills for quite a bit longer than the current government has been in power.

Given that accepting the deal as it is/was would go completely against what they campaigned for, and that the consequences of outright refusal of the deal would trigger an exit from the eurozone, they feel that they can't make that choice. Thus they've transferred it to the voters.

Current ruling party is made up of incompetent morons.

Parties.

 

[Windom Earle]

Ummm.... they have been on the end of oblivion for months now, and the have a referendum AFTER THE BILL IS DUE?

Current ruling party is made up of incompetent morons.

This.

 

[Stinkles]

This has really illustrated to me just how degenerate the political process is in the EU. Our finance minister told the press that "He [Varoufakis] answered me: If the referendum has a positive result, he'll immediately sign the agreement" -- so far so good. But our minister followed this up by saying that he considers this a "very strange approach".

Apparently, letting the people decide on the future of their country is a very strange approach in Europe in 2015.

You dont think the chronology of this whole debacle is strange? Referendums should be carefully thought out, giving issues time to be aired and the voting public time to digest and make informed, thoughtful decisions. This is beyond rushed.

It is by definition, strange.

 

[Durante]

Current ruling party is made up of incompetent morons.

No, but that's what the current European oligarchy is (to some degree successfully) trying to portray them as. Also, it's a government, not a party.

You dont think the chronology of this whole debacle is strange? Referendums should be carefully thought out, giving issues time to be aired and the voting public time to digest and make informed, thoughtful decisions. This is beyond rushed.

It's rushed, agreed. But if you're given an ultimatum you don't really have much choice.

 

[Coriolanus]

You dont think the chronology of this whole debacle is strange? Referendums should be carefully thought out, giving issues time to be aired and the voting public time to digest and make informed, thoughtful decisions. This is beyond rushed.

It is by definition, strange.

Every single negotiation ever since syriza has gotten in power has been rushed. In no small part because the previous government chose to get a short term bailout package and then called for elections.

You can see it as syriza being incompents or you can see it as the creditors seeing how much they can get syriza to bend the knee before pushing them over the edge.

Depends on your preconceived notions, really.

 

[PumpkinSpice]

You dont think the chronology of this whole debacle is strange? Referendums should be carefully thought out, giving issues time to be aired and the voting public time to digest and make informed, thoughtful decisions. This is beyond rushed.

It is by definition, strange.

Crisis tends to bring out the strange.

 

[AuthenticM]

Is a referendum on economic measures a good way to go about managing a country ? Shouldn't economists be the ones counselling politicians ?

 

[Wafflecakes]

No, but that's what the current European oligarchy is (to some degree successfully) trying to portray them as. Also, it's a government, not a party.

It's rushed, agreed. But if you're given an ultimatum you don't really have much choice.

So you are saying that holding a referendum after the bill is due is a smart move?


Ok sir. Whatever you say...

 

[Coriolanus]

So you are saying that holding a referendum after the bill is due is a smart move?


Ok sir. Whatever you say...

Should keep in mind that the alternative is to readily acquiesce to measures that are guaranteed to make the problem worse.

 

[ICKE]

The European Central Bank has kept the local banking industry in Greece alive for several months via constantly raising the limit of emergency financing.

At the same time these Syriza clowns have done their utmost to alienate all other Member States from any negotiations with all these shenanigans. One day we might receive positive signals and the next they are prancing around proclaiming how they will never surrender to Troika.

If you ask me, it has been an act of monstrous folly on the part of the creditor governments and institutions to push it to this point. But they have, and I can’t at all blame Tsipras for turning to the voters, instead of turning on them.

And Krugman is quite frankly embarrassing himself with these comments. The reason why we are here is not, because EU does not have transparent governance or because the existing institutions are somehow monstrous. Other partners are simply fed up with Syriza and their little circus.

 

[Durante]

So you are saying that holding a referendum after the bill is due is a smart move?

Of all the options available to them (the others are either unilaterally accepting conditions which go against what they have to assume to be their constituents' will, or completely rejecting the proposal), yes, it's a smart move.

That's why so many European politicians are so pissed off. It's not just a smart move, it also makes the Greek government harder to defame regardless of its outcome.

 

[Wafflecakes]

Should keep in mind that the alternative is to readily acquiesce to measures that are guaranteed to make the problem worse.

...and you couldn't have held a referendum a week ago? Two weeks?

It all reeks of a strategy by the Greek government to lay even more blame on the people who bailed their asses out by saying "look how reasonable we were by having a vote, and they wouldn't work with us!".

 

[Coriolanus]

...and you couldn't have held a referendum a week ago? Two weeks?

It all reeks of a strategy by the Greek government to lay even more blame on the people who bailed their asses out by saying "look how reasonable we were by having a vote, and they wouldn't work with us!".

If they held a referendum earlier, the EU would've just said what they're saying right now, that the terms aren't final and so the referendum is useless. Empty posturing.

Either way, coulda woulda shoulda.

Also, dont be facetious, they EU did not bail out Greece out of the kindness of their hearts.

 

[bobbytkc]

Should keep in mind that the alternative is to readily acquiesce to measures that are guaranteed to make the problem worse.

Still should have had the referendum earlier. They couldn't announce it previous weekend and do it now?

 

[LJ11]

You dont think the chronology of this whole debacle is strange? Referendums should be carefully thought out, giving issues time to be aired and the voting public time to digest and make informed, thoughtful decisions. This is beyond rushed.

It is by definition, strange.

ECB pulled a credit line 10 days after Syriza came into power, no time for discourse or thoughtful discussion, they just yanked the facility. Was that rushed?

Granted, the collateral being posted by Greece, and other countries for that matter was and is garbage, but pulling a lifeline right as a new party came into power and pinning them up against the wall is not how I would go about things. The whole situation is fucked.

 

[A More Normal Bird]

Is a referendum on economic measures a good way to go about managing a country ? Shouldn't economists be the ones counselling politicians ?

The public makes decisions on economic matters in pretty much every election in every country. As I understand it, currently popular opinion in Greece supports both staying in the EMU and ending austerity. In the current situation, these are conflicting goals. This referendum is about choosing one or the other.

If economics was a hard science your point would hold more water, but bear in mind it was economists who enforced austerity on Greece and wrecked its economy, "justified" by models using a fiscal multiplier of less than 1 which were proven to be completely inaccurate.

 

[Wafflecakes]

If they held a referendum earlier, the EU would've just said what they're saying right now, that the terms aren't final and so the referendum is useless. Empty posturing.

Either way, coulda woulda shoulda.

Also, dont be facetious, they EU did not bail out Greece out of the kindness of their hearts.

Intentions or not, this is a problem Greece caused, so blaming everyone but Greece is what comes off as truly facetious.

There is no easy way out of this mess, and I don't see anyone involved as being particularly reasonable.

 

[ICKE]

Of all the options available to them (the others are either unilaterally accepting conditions which go against what they have to assume to be their constituents' will, or completely rejecting the proposal), yes, it's a smart move.

That's why so many European politicians are so pissed off. It's not just a smart move, it also makes the Greek government harder to defame regardless of its outcome.

There is nothing smart about it. It is just empty posturing, something Syriza seems to enjoy quite a lot. The negotiations and their little poker game has not been succesfull and now the PM is trying to distance himself from any responsibility via referendums. I have no idea how normal people on the ground tolerate this lunacy.

There is constant drama involved with these guys.

 

[A More Normal Bird]

Intentions or not, this is a problem Greece caused, so blaming everyone but Greece is what comes off as truly facetious.

There is no easy way out of this mess, and I don't see anyone involved as being particularly reasonable.

Greece caused the GFC and designed the EMU?

 

[Coriolanus]

Intentions or not, this is a problem Greece caused, so blaming everyone but Greece is what comes off as truly facetious.

There is no easy way out of this mess, and I don't see anyone involved as being particularly reasonable.

Which i have, thankfully, never done. The current government, however, is not responsible for the scope of this crisis. The previous governments are. The previous governments that were ousted, and that the EU was more than happy to deal with.

The easy way out is a haircut.

 

[bobbytkc]

If they held a referendum earlier, the EU would've just said what they're saying right now, that the terms aren't final and so the referendum is useless. Empty posturing.

Either way, coulda woulda shoulda.

Also, dont be facetious, they EU did not bail out Greece out of the kindness of their hearts.

The referendum decides how the greek side will respond, it has no influence on what terms troika will put in the bailout agreement. It doesn't MATTER what the final details of the terms are. Greek representatives will either try and get a bailout, or they will downright reject it based on the referendum.

 

[ElTorro]

It's rushed, agreed. But if you're given an ultimatum you don't really have much choice.

Greece has had time since February to come up with a conclusive proposal, negotiate it with the institutions, and organize a referendum for it. They did neither of these things. Instead, they delayed virtual all meaningful work till the very last week, in which they handed in documents in the middle of the night, only hours before official meetings, giving the rest of the Eurozone no time to assess them. It's Greece who is sabotaging the democratic process by pushing everything to the later-than-latest deadline possible.

Their government is either incompetent or making a reckless strategic move to save their own face and deferring responsibility, now that it becomes obvious that they won't be able to hold up to their lofty pre-election promises.

I am actually supportive of things like a referendum or a debt release, but its hard to take this government seriously or have any trust in their capability to get things done. Since the election half a year ago, they have gotten nothing done at all. No meaningful reform proposals or implementations. They haven't even tried to establish a basic social security net, which should be the top priority of every social/left-oriented government.

And now they are blaming everyone else but themselves.

 

[Wafflecakes]

Greece caused the GFC and designed the EMU?

The global financial crises simply exposed flaws in systems around the world, it did not cause them.

Even if it had never occurred, Greece would have collapsed eventually because of how poorly it was being run.

Which i have, thankfully, never done. The current government, however, is not responsible for the scope of this crisis. The previous governments are. The previous governments that were ousted, and that the EU was more than happy to deal with.

The easy way out is a haircut.

Pointless distinction as both were elected by the same people.

 

[Coriolanus]

Pointless distinction as both were elected by the same people.

Not when you're trying to assign blame to a specific party, no.

 

[AuthenticM]

If economics was a hard science your point would hold more water, but bear in mind it was economists who enforced austerity on Greece and wrecked its economy, "justified" by models using a fiscal multiplier of less than 1 which were proven to be completely inaccurate.

I see. It's quite the conundrum. All I know is that I know fuck-all about economics, which is why I would find it weird if a referendum was held to determine the fate of a country based on what I think. But then again, maybe the outcome wouldn't be worse than what follows listening to economists who are either incompetent or have an agenda.

 

[Ikael]

In this Greek dylemma, there are 3 goals that you can reach:

- Have the Euro as your currency
- Operate your goverment with a high deficit
- Mantain your national soverignity

Thing is, you can only choose 2 of them. Only two. And whoever tells you that you can have all of them, is lying to you like a bastard.

Consequently, there are only 3 possible options for Greece in this current situation:

- Keep using the euro as your currency, and operate your goverment with a high deficit. This can only be archieved trought accepting every single demand of whoever lends you money (you can't print your own coin, remember?) and thus, giving up your national soverignity. This is essentially, what every Greek goverment has been doing until Syriza came to power.

- Have the Euro as your currency and mantain your national soverignity, at the cost of little to no deficit. This is possible, but in order to do that, you need to reach a zero deficit, aka, balancing your accounts either by cutting spending or growing the money collected by taxes (or both). No more deficit. No need to ask for money means no need to answer to pesky lenders and undemocratic troikas. This is, IMHO, the most sensible course of action

- You can indeed mantain your national soverignity and keep operating with a high deficit. The problem is, you need to print your own coin in order to do that, and you can't do it inside the Euro, so helloooo Drachmas.

That means that this Greek referendum is absolutely misguiding and ultimately, pointless. Greece needs to conduct a referendum and decide whetever they want to keep the Euro as their coin under the dictate of the Troika, or if they want to go back to Drachmas in order to get rid off the Troika.

Giving up your current strong, stable currency in exchange for the much weaker, unstable Dracma is the price to pay for recovering your national sovereignity, and it is about time that the Greek goverment speak honestly about that and that the cold harsh, electorally unprofitable truth comes foward.

Yes, there's a majority of Greeks that wans to keep the Euro, but they must understand that there's a price to pay for that. Keeping this on mind, the Greeks must then decide. Just saying "I don't like what the Troika is doing" amounts to nothing, while the option "I want everything" is simply put, self dellusion at its finest.

 

[Wafflecakes]

Not when you're trying to assign blame to a specific party, no.

I am not trying to assign blame to a specific party.

I am assigning the blame for Greece's problems on *shocker*

Spoiler

Greece

.

 

[Delusibeta]

Well, a referendum is one way to escape from the political hole the Greek government has found themselves in. I will expect a very solid "feck off" from the Greek population, followed by the Grexit we've been talking about for the last five years.

 

[ICKE]

If economics was a hard science your point would hold more water, but bear in mind it was economists who enforced austerity on Greece and wrecked its economy, "justified" by models using a fiscal multiplier of less than 1 which were proven to be completely inaccurate.

The economy was wrecked from the get-go. It was gone before austerity measures kicked in, given what the state of the public sector, budget deficits and debt-to-GDP ratio was. You can add endemic nepotism and tax evasion to that mix. International organizations failed to take into account how flawed the Greek administration was and underestimated all these factors. There is a reason why Baltic states have been more successful while implementing cost saving measures.

 

[Coriolanus]

I am not trying to assign blame to a specific party.

I am assigning the blame for Greece's problems on *shocker*

Spoiler

Greece

.

It all reeks of a strategy by the Greek government to lay even more blame on the people who bailed their asses out by saying "look how reasonable we were by having a vote, and they wouldn't work with us!".

The greek government of today is not the same greek government of yesteryear.

Either way, if you're trying to assign blame only to greece, which you've just admitted to doing, you're being purposefully obtuse.

 

[PumpkinSpice]

The global financial crises simply exposed flaws in systems around the world, it did not cause them.

Even if it had never occurred, Greece would have collapsed eventually because of how poorly it was being run.

The design of the Euro-region never took into account asymmetric economic shocks, as occurred and is continuing to occur. That's not Greece's fault, but it's been wrecking their ability to compete with other countries' exports, wrecking their GDP, wrecking their government income, and wrecking their whole economy.

Forcing austerity on top of that made it worse; that's not Greece's fault either. That's the fault of shortsighted and wrong economic policy by leaders of other Eurpoean counties and financial bodies. This austerity ignores decades of hard-earned economic insight in favor of a fantasy on how recession economics should work.

What is Greece's fault is years of corruption, tax evasion, and taking excessive advantage of unnaturally low bond rates. None of that will be fixed by "hard medicine" that just makes the whole mess worse.

 

[Windom Earle]

Of all the options available to them (the others are either unilaterally accepting conditions which go against what they have to assume to be their constituents' will, or completely rejecting the proposal), yes, it's a smart move.

That's why so many European politicians are so pissed off. It's not just a smart move, it also makes the Greek government harder to defame regardless of its outcome.

There's nothing smart about it, even the Greek public seems to see though their charades now and is pissed off about how their government is putting the fate of the country on a gambling table.

Syriza just didn't know when to stop the gambe.

 

[ICKE]

Syriza just didn't know when to stop the gambe.

Someone said it in the previous thread.

Syriza went for broke and have apparently succeeded.

 

[Wafflecakes]

The greek government of today is not the same greek government of yesteryear.

Either way, if you're trying to assign blame only to greece, which you've just admitted to doing, you're being purposefully obtuse.

You are the one being obtuse.

The Government is the representation of the nation it is elected by, and acting like the nation is clean of any responsibility just because a new set of politicians is in office now is just stupid.

 

[SkyOdin]

I am not trying to assign blame to a specific party.

I am assigning the blame for Greece's problems on *shocker*

Spoiler

Greece

.

But isn't Greece part of the EU? Isn't the EU a political and economic union that has to some degree involved individual countries giving up their sole power over economic policy to the collective? Greece could have theoretically solved its problems if it wasn't part of the EU and had control over its own currency, but the very way the Euro works has tied their hands on a lot of economic tools. In an economic union like the Eurozone, the various countries should be making concessions to each other to solve those problems. In that regard, a haircut on Greece's debt is perfectly reasonable. Instead though, the various Eurozone countries are refusing to help each other unless they get some sort of benefit out of it. That kind of thinking is going to doom the whole experiment.

 

[LJ11]

The design of the Euro-region never took into account asymmetric economic shocks, as occurred and is continuing to occur. That's not Greece's fault, but it's been wrecking their ability to compete with other countries' exports, wrecking their GDP, wrecking their government income, and wrecking their whole economy.

Forcing austerity on top of that made it worse; that's not Greece's fault either. That's the fault of shortsighted and wrong economic policy by leaders of other Eurpoean counties and financial bodies. This austerity ignores decades of hard-earned economic insight in favor of a fantasy on how recession economics should work.

What is Greece's fault is years of corruption, tax evasion, and taking excessive advantage of unnaturally low bond rates. None of that will be fixed by "hard medicine" that just makes the whole mess worse.

That's really not Greece's fault either. I mean the market sets the rates at auction, no demand, higher rates. Problem is rates converged, risk premium disappeared. Investors didn't take default risk into account, they treated EMU countries as if they were all the same, they never were. Yes, they shared the same currency, but they were not one and the same. Money just poured in, investors didn't care.

Most sovereign debt problems have the same characteristics, pegged currencies, hot money flows, asset inflation/bubbles/speculation, ballooning debt, until it eventually all goes bust. Go back over the last 150 years, and you'll see this repeated over and over.

Edit: Large current account deficits as well.

 

[Wafflecakes]

But isn't Greece part of the EU? Isn't the EU a political and economic union that has to some degree involved individual countries giving up their sole power over economic policy to the collective? Greece could have theoretically solved its problems if it wasn't part of the EU and had control over its own currency, but the very way the Euro works has tied their hands on a lot of economic tools. In an economic union like the Eurozone, the various countries should be making concessions to each other to solve those problems. In that regard, a haircut on Greece's debt is perfectly reasonable. Instead though, the various Eurozone countries are refusing to help each other unless they get some sort of benefit out of it. That kind of thinking is going to doom the whole experiment.

Greece decided to join the Euro.

No matter how hard people try, you can't change the fact that Greece caused its problems.



I honestly don't know the answer to the problem. Stay or leave?

Either way, it is the refusal to take any responsibility that rubs me the wrong way.

 

[Windom Earle]

Someone said it in the previous thread.

Syriza went for broke and have apparently succeeded.

Personally I think Syriza thought to get their way with the referundum and expected the public to vote YES (as Varou even said), so they could quietly bail out of the government and put the responsibility into more capable hands. I think they are done.

Syriza was always a populist opposition party, they can't handle power and responsibility. The worst thing the Greek people could have voted for.

 

[East Lake]

The European Central Bank has kept the local banking industry in Greece alive for several months via constantly raising the limit of emergency financing.

At the same time these Syriza clowns have done their utmost to alienate all other Member States from any negotiations with all these shenanigans. One day we might receive positive signals and the next they are prancing around proclaiming how they will never surrender to Troika.



And Krugman is quite frankly embarrassing himself with these comments. The reason why we are here is not, because EU does not have transparent governance or because the existing institutions are somehow monstrous. Other partners are simply fed up with Syriza and their little circus.

The people negotiating are probably a lot more cordial toward Syriza than most in this thread are. They recognize theater for what it is.

 

[old]

THAT has been the goal of the Troika since Syriza won: to make them lose face, and send a clear message to the rest of Europe that austerity is not a choice, and that any party that is anti-austerity won't survive being elected.
.

The ideological agenda of the creditors was laid bare when they objected to the Greece's proposed tax hike on businesses. The creditors want to cut spending by cutting pensions, cutting support for the poor, while also raising retirement age, privatizing public wealth into private hands, and raising taxes on the poor and middle class...but leave businesses alone.

They want Greece to raise revenue by raising taxes...but not by increasing taxes on businesses too much. That might "impede economic growth". But massive layoffs and poverty caused by spending cuts are just fine. That won't hurt the economy...

Nope, no ideologically driven agenda here. No pro-austerity agenda trying to make an example out of Greece here at all.

 

[A More Normal Bird]

I see. It's quite the conundrum. All I know is that I know fuck-all about economics, which is why I would find it weird if a referendum was held to determine the fate of a country based on what I think. But then again, maybe the outcome wouldn't be worse than what follows listening to economists who are either incompetent or have an agenda.

Well I certainly agree with Ikael's post that there is a problem with the views of the Greek population, who want several things that are incompatible with each other, but if you're a politician it's quite a big call to make. There are economists who'd advocate for exiting the EMU and others who'd advocate for austerity until the end of times, but either way they'd be making a decision that the majority of the public oppose. I agree a referendum isn't an ideal way of managing economic policy, but at least in this situation it forces a choice that the people will have to experience and judge for themselves instead of leaving them in some sort of economic limbo-land or purgatory.

The global financial crises simply exposed flaws in systems around the world, it did not cause them.

Even if it had never occurred, Greece would have collapsed eventually because of how poorly it was being run.

Funny how you say "around the world". It's not a coincidence that the PIIGS nations had sovereign debt crises in the wake of the GFC whilst non EMU nations like UK, USA, Canada, Japan, Australia etc... did not.
The GFC didn't (just) expose flaws in these economies, it exposed the fundamental flaws in the design of the EMU and the ideologies of those who make its decisions. Australia and Ireland both had government surpluses running on the back of high private debt before the crisis: guess which one collapsed and had to be bailed out and which one was able to successfully implement bank guarantees and stimulus through deficit spending? Greece and Japan both had high levels of government debt and persistent deficits prior to the crisis: guess which one collapsed and had austerity enforced on it and which one kept doing its thing and maintaining low yields on its bonds? These aren't 1:1 comparisons, but to act like the economic woes and triumphs of EMU nations are entirely of their own doing and directly comparable to any fully sovereign country is wilful ignorance.

In a world where there was no GFC and Greece stayed using its own currency (or even if only one of those occurred), there is no way it would have collapsed in the way it has now. There would have been no imposed austerity and its troubles would have been its own to sort out over time.

The economy was wrecked from the get-go. It was gone before austerity measures kicked in, given what the state of the public sector, budget deficits and debt-to-GDP ratio was. You can add endemic nepotism and tax evasion to that mix. International organizations failed to take into account how flawed the Greek administration was and underestimated all these factors. There is a reason why Baltic states have been more successful while implementing cost saving measures.

Budget deficits and debt to GDP are compositional indicators, not evidence of a poor economy in and of themselves. Austerity doesn't work. The IMF modelling using a negative fiscal multiplier was proven to be completely wrong. If Greece had more successfully implemented austerity (in terms of increasing tax take and reducing expenditure, i.e. taking money out of the economy) they only would have been more wrong. Other nations reducing their government deficits tells us nothing about what sectoral balances are appropriate for Greece in a macro-accounting sense.

Whatever the problems with Greece's economy are (and I'm not denying there are many) they were only made worse by its involvement in the EMU and the austerity imposed by the Troika. To which you could say " well they shouldn't have joined/been let in in the first place," and I'd agree, but if you think that their admittance to the EMU was an act of benevolence and of no benefit to nations like Germany then you're missing some key parts of the picture.

 

[LJ11]

For anyone with some free time and interest, check out the below post by Michael Pettis. It's making the rounds once again, I've it posted before in other threads, really worth a read. Not perfect but it does a good job explaining the Euro areas problems. It's not just about the Euro area, but how balance of payments get out of sync and cause economic blowouts.

Hope you guys read it, long but a good read.

http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/

 

[Ether_Snake]

The ideological agenda of the creditors was laid bare when they objected to the Greece's proposed tax hike on businesses. The creditors want to cut spending by cutting pensions, cutting support for the poor, while also raising retirement age, privatizing public wealth into private hands, and raising taxes on the poor and middle class...but leave businesses alone.

They want Greece to raise revenue by raising taxes...but not by increasing taxes on businesses too much. That might "impede economic growth". But massive layoffs and poverty caused by spending cuts are just fine. That won't hurt the economy...

Nope, no ideologically driven agenda here. No pro-austerity agenda trying to make an example out of Greece here at all.

Yes, because that is what they want everywhere. If some countries don't follow, it makes it more difficult to carry out those policies at home.