Syph Medwes
Member
in this case maybe lol
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Greece to hold referendum on austerity measures 5 July
- Thread starter Coriolanus
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in this case maybe lol
EU and Euro Zone are two different things.
Windom Earle
Member
Varou himself as "source" is more than lousy. Are there still people out there trusting this wannabe politician?
Negotiator
Member
It seems that POS payments will be unrestricted. The 60 limit applies to ATMs only.
Nikodemos
Member
Sounds quite plausible. I could see the following situations as real:
Varoufakis returning to the Troika with a 'Yes' vote on the latest proposal would lock the Troika out of performing a Darth Vader and further altering the terms. This obviously enrages certain elements within it. If the Troika were to renege on a contract that the Greek public has vouched for, its credibility would crumble faster than a mudbrick castle built on waterlogged silt.
Tsipras/Varoufakis got a rather painful dose of reality when they realised those people a) really fucking hate them for being anti-austerity Socialists; b) are a bunch of parochialistic shitwads interested solely in scoring points with their respective domestic audiences rather than attempting to help Greece out of the cesspit it's currently wallowing in. They wisely decided playing by the rules is for rubes and started pulling pages out of the Yosif Djugashvili Playbook for International Negotiations (all their 'missteps' were calculated to keep the Troika on their collective backfoot).
However we now have to see whether their final bluff will actually work. Economists are really spiteful people, and the EuroGroup seems to comprise some of the worst examples. We could very well end up with front row seats to a perfect real-world exemplification of the adage "cutting one's nose to spite his face".
This sound about as wise as KingSnake helping you to form Britain. Stock market will look terrible for a long time.
Lol, afaik it depends where the placement have been made,,,, will see tomorrow
Oh and to be fair I placed the order earlier in the week before this latest development
Ether_Snake
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Sure, I have no idea how they will react if they are brought the proposal signed after a Yes vote. My guess is that there will be too much pressure on them, trying to make it clear to not make fools of themselves, and debt relief will be brought to the forefront as an necessity by outside parties because we all know this proposal is not a real solution over the long term. Of course this will be rejected, but not by everyone, divisions will form (not necessarily among the ministers mind you, but at least outside the political circles involved, in the press, financial analysts, and foreign countries). I think this is ultimately key regardless of whether Greece stays or leaves; it's all about how the tables will be set for the future, it's about the precedent.
How the Troika would handle the Yes vote will spell everything clearly to all other European countries that are facing anti-austerity movements. If they shut the doors when presented with a yes to the proposal, the closest we would have ever been to an agreement, then this does two things:
1- Completely ruins any future negotiations that would take place regarding other countries such as Spain. People will see where they are going again, and they'll elect a party to protect them against the creditors' demands once trouble starts brewing, unless economic recovery takes hold before, but this brings me to point 2.
2- Since closing the doors on a yes to the proposal would effectively force the Greek government to handle the situation on its own, which is basically Greexit (regardless of the technical details of "oh you can't leave the Euro, there's no such mechanism", that doesn't matter, any agreements or conventions can be broken or not followed by any party, they don't need any agreement to start minting drachmas or do whatever they want in their country), the Troika will have lost a lot and will go on the attack to eat someone else. There is no way in hell they'll accept another country coming to them requesting loans under more favorable terms than was offered to Greece. That means as soon as another country starts showing weaknesses, they'll get hit hard with austerity demands, but all that this will do is fuel the anti-austerity parties and we'll see the same situation unfold all over again.
The possibility that after a Greexit, the Troika would act constructively and no longer demand austerity when another country is in need of loans is basically nill unless the electorate of their respective countries magically all turned left, which won't happen in the creditors' countries.
Syriza's original goal was to push for reforms that would strengthen the nations that are facing the same outcome. It was the best of ideas really, because ultimately if any union could work it would be one of southern Europe, albeit not a monetary union, not yet. Unions work well when it's a union of the weak, not a union of the strong, because the weak want to solve their problems, problems that are often similar, and therefore which often require the same solutions. The strong, in a union, can only seek others to prey on, otherwise what's the point? Tsipras was pushing for a solution that wasn't only about Greece, but this was quickly shut down. It was the best thing that could have happened. Without this, we'll just have dominos falling.
ClosingADoor
Member
It's nice to make up stories, but all this is just speculation about things we have no information on. We'll now have to wait for next week and just see what happens.
Now you are making up some southern European union that doesn't exist? What are you even talking about...
Nikodemos
Member
Well, then I'm about as trustworthy as all the journalists peddling "tales from my ass" as "unconfirmed reports from unknown sources".
Negotiator
Member
Source?
Should have been more careful with my wording. It may/will be rationed if things get worse. Was replying to an earlier post about long gas lines. Apologies for the confusion, no ill intention. Don't want to scare anyone, just a step the govt may take.
Yeah just reward countries for having high debt.
Sounds like a great solution!
High debt also doesn't equal poor country, many poor countries have low debt.
Estonia a country far away from the german GDP per capita has by far the lowest debt (10% of GDP), while germany has 75% ...
Ether_Snake
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So? Estonia would only contribute a little bit if at all. The idea is for the bailout to be progressive, you know, based on capacity to pay, like tax rates should be.
It also goes back to the point that this isn't just a Greece problem, it's a problem of numerous countries, but Greece is just the first bump, the others will come. A solution that would have sought relief for all earlier would have been good.
So why then did Merkel refer to this non existant offer as "extremely generous, going beyond the second bailout program"?
You're essentially saying that all the lenders offered in the end was a 5 month extension and sending greece even further down the debt-slope before having to go through the same shit all over again in January? "and here is a list of all the shit we need you to do for that 5 month extention, there will be a new list in January with some more public assets we need you to sell, k thx bye"
If that's really true, then the referendum wasn't amateurish, it was pure genius.
This is the Troika being amateurs if anything. Either that, or it seriously looks as if they are preemptively back tracking on the offer just in case greece votes yes.
No, under the system u proposed it would (relatively) pay more than anybody else cause it has the lowest debt/gdp ratio.
Ether_Snake
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No since it has a smaller economy, it can't afford to pay more than Germany. It all comes down to capacity to pay. If your debt to GDP is really high, you're not in a position to make a big loan to someone whose debt to GDP is really really high. Again this shows that the Troika's bailout funding is illogical to begin with, no wonder they can't do another round.
What she said was that they had conceded to weaken the conditions of the proposal beyond of what was originally intended. If we follow the negotiations over the last week, the Institutions have moved away quite substantially from their original demands with every day that passed.
The negotiations have been from the very beginning only about unlocking the remaining funds of the 2nd program. They have said over and over again that all other issues, including a debt relief, will have to be discussed afterwards.
ClosingADoor
Member
They are contributing by capacity. The bigger economies pay more. With your proposal, you are basically asking Germany and France to pick up the tab and excusing the other nations because they are either small or already have a big dept. Going by GDP is the most logical thing.
Yes, which is why i found it funny that suddenly claims of "we offered debt reduction but the greeks turned it down" surfaced, but only after the referendum was issued.
It still doesn't make the troika look good, if they now claim that the offer they gave greece (and subsequently published on the comissions website) wasn't the entire list of concessions to be wrung out of Greece before discussing debt reduction.
And moving away from original positions seems obvious in a negotiation. Greece did the same. Privatisation seems to be the one thing where they clash and neither side will budge. And since two thirds of the troika were positive about the final greek proposition when it came i assume it's the IMF who wants to enforce privatisations at the cost of risking the entire single currency project.
CyclopsRock
Member
Futures are showing the FTSE to be down by over 3% tomorrow and the DAX by over 4%. Euro to GBP is also at it's highest rate since 2007 @ 1.42.
Negotiator
Member
Apparently capital controls don't apply to tourists...
CyclopsRock
Member
Well that makes sense, capital controls are to prevent a run on Greek banks. They don't care if people take money out of their Santander or HSBC account. The availability of physical cash also isn't a problem.
I want to know this too since this is how I get my monthly allowance and the end of the month is upon us...
Isn't that the point of having elected leaders?
Greece has been deciding on its future by the actions it took over the past two decades.
Last month Germany suggested that Greece hold a referendum and Greece said no. Now, at the very last minute (after deadlines have passed), Greece wants an extension for a referendum?
Where was Greece's love for direct democracy a month ago?
This is more of a delaying tactic than anything else.
Agreements between countries are between countries, not with specific governments. If a country decides to hold early elections, it shouldn't place extra requirements on outside parties.
Not really. On a local level maybe (city, county, parish, etc.), but not on a countrywide level. That's what elected politicians are for.
It doesn't matter which individuals are currently in power. Greece is still Greece. The government of today is responsible for the agreements and actions taken by the government of yesterday.
Just because a new party comes to power doesn't mean prior agreements "reset."
In 2009 the Greek retirement age was 57, much lower than Europe as a whole and much lower than North America. Today is it 67, which is standard across North America and Europe.
The Troika also wanted Greece to raise taxes on businesses, high income individuals and crack down on widespread tax evasion.
The US as a whole had a massive recession due to the GFC. And while the US weathered the effects, individual states had their own issues.
In 2009 CA had a US $42 BILLION deficit. By 2013 CA had a US $850 million surplus.
In the interim years, the state's debt got so bad it got to the point where it couldn't even pay tax refunds. CA literally sent out IOUs to citizens. Some government workers didn't get paid because the money wasn't there.
CA responded by cutting programs and raising taxes while encouraging businesses to invest. Other core changes were made to legislation, such as making it easier for the government to pass a budget and refusing to pay legislators their salaries for every day the budget was late (yup, if they didn't do their job, they didn't get paid). As a state we went from being compared to Detroit (there were a number of US news stories speculating on if it was possible for a state to declare bankruptcy) to once again having a strong economy.
That's just one example, but to say that the GFC didn't impact the US ignores some of the details.
Honestly it seems cowardly rather than bold.
He was elected to lead and he should lead. If he's afraid to make the necessary decisions, then he is a weak leader.
These three quotes illustrate the biggest problem with the EU. You all call yourselves European, yet you still see yourselves as citizens of individual countries (because you are) and it is only human nature to put your own self interest first.
From the American point of view, the EU is a strange beast because it seems to be a loose conglomeration rather than a strong union. The US has its own issues, but (aside from the "sovereign citizen" loonies) everyone in the US sees themselves as citizen of the US first and a resident of their current state second.
There is one Federal government. One major Federal taxing authority. One major Federal division responsible for monetary policy.
Some states continually pay more in taxes to the Fed than they get back. Other states continually get back more from the Fed than they pay in. US states are not limited to just their own budgets. Yes, each state has its own budget (and most have their own taxing authorities), but for the poorer states, that money is supplemented by Federal spending.
In the EU, since you're all still separate countries, no State wants to be subsidizing another State.
That's like credit card debt. Sure, they haven't had to pay the bill yet, but it's likely that the bill will come due. It's still an obligation. It's not fair to say that other countries shouldn't worry about it.
Greece could be the European version of Argentina.
Why should Germany subsidize other countries in the EU? If the EU were a single country with individual states, similar to the US, then it would be natural for the funds to be spread around. But EU citizens didn't want one country. They wanted individual countries with a common currency. And individual countries are always going to put their own citizens first.
That's pretty much what the Troika is doing right now with respect to Greece.
Putin will happily welcome East Germany back to Mother Russia!
From what we see in the US, Syriza is supported by the vast majority of Greeks. It doesn't seem odd that people outside of Greece would have the impression that the Greek media supports Syriza.
That sounds like something you would see in a Union negotiation here in the US. In fact, something similar happened during the last BART negotiations. One of the Union demands was that BART pay all union employees in paper checks (rather than direct deposit as most jobs pay) because it meant that people still had to be employed to print the checks and physically deliver them. Direct deposit is faster, more efficient and less prone to errors, but it would mean the loss of a handful of jobs that were no longer needed.
That was one of the Troika demands. That Greece implement an electronic banking system that was up to EU standards.
Yep. That's why Germany suggested that Greece hold a referendum a month ago and Greece said no. Those crafty Germans, they're so afraid of a Greek referendum, they actually suggested it!
Must be reverse psychology.
Maybe there would have been more details if Greece had actually submitted its proposal in April, as promised, rather than letting the deadline pass by as if it wasn't important.
Pretty much. If Greece leaves the EU, there is speculation that Russia will be its new best friend. Well, at least there was. At this point it is questionable how much Russia could invest in a Greek bailout without pissing off its own citizens and those in occupied Crimea.
The Euro might actually hit parity with the US Dollar. Haven't seen than since the Euro was first launched. Would be good for EU exports and great for US tourists wanting to go on a European vacation. US imports and US vacations would be noticeably more expensive for EU citizens though.
GDP is the only equitable way. Basing it on GDP - debt would only encourage countries to highly leverage themselves in order to lower their contribution.
I never understood the 'Greece has no leverage' thing. The potential for default and a Grexit was always leverage, no? The first major crack in the EU; showing other nations faced with austerity as enforced by the troika 'another way'; potentially trading with Russia... these were all hugely negative outcomes for Europe, yet it appears that the troika were unwilling to budge at all from an outrageous austerity program that has been absolutely killing the Greeks. All of this while dealing with a government elected with a specific mandate not to fold on these issues.
In the circumstances, can they truly be surprised that Tispras hasn't crumbled in the face of their demands? Do they finally realise what kind of face they have shown to the world?
I agree with the Guardian:
And how can you disagree with this:
Look, I'm Irish. People say we're making it through austerity, that we're a 'good example'. Sounds good in a newspaper, but those people didn't see an almost lost generation out of work, have a friend jump from a bridge, see prostitution arise in areas it never had been before, homelessness quadruple... and for this to go on for years. Those people don't understand that generations of Irish will be paying off private debts bought up in the bailout, disguised as doing us a favour. It stinks.
All of that, and we were nowhere near as bad as the Greeks are. How can Tsipras, in good human conscience, agree to a deal like that without even getting a haircut as a concession? He can't. And since there is no movement from the troika, there's nowhere to go, so he's going to the people to back him up, and if they do, it's an exit from the EMU. He needs another democratic mandate for a decision that big. It all makes logical and moral sense to me, and fuck the troika for letting it come to this in defence of parochial national political interests, multinational business interests and garbage economic theory.
In the circumstances, can they truly be surprised that Tispras hasn't crumbled in the face of their demands? Do they finally realise what kind of face they have shown to the world?
I agree with the Guardian:
And how can you disagree with this:
Look, I'm Irish. People say we're making it through austerity, that we're a 'good example'. Sounds good in a newspaper, but those people didn't see an almost lost generation out of work, have a friend jump from a bridge, see prostitution arise in areas it never had been before, homelessness quadruple... and for this to go on for years. Those people don't understand that generations of Irish will be paying off private debts bought up in the bailout, disguised as doing us a favour. It stinks.
All of that, and we were nowhere near as bad as the Greeks are. How can Tsipras, in good human conscience, agree to a deal like that without even getting a haircut as a concession? He can't. And since there is no movement from the troika, there's nowhere to go, so he's going to the people to back him up, and if they do, it's an exit from the EMU. He needs another democratic mandate for a decision that big. It all makes logical and moral sense to me, and fuck the troika for letting it come to this in defence of parochial national political interests, multinational business interests and garbage economic theory.
Ether_Snake
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Well wouldn't that be great? A country with low debt to GDP would rush to finance a bailout in order to increase its own debt, so as to reduce its future contributions? You don't want to foot the bill for a future bailout? Foot the current one. At least that would be useful debt; used to heal.
Russia won't bail out Greece, but Greece could resume trade with Russia, so that's good for both, and especially because it will incite EU members to keep pushing to be able to do the same. There are a few countries that would really like to resume trade with Russia, if they aren't a majority. If Greece is out and it does so, it will weaken the EU' popularity in those countries if they can't do the same, especially countries in financial difficulties.
Why would a country finance another?
Self interest makes it more likely that if a country is going to take on debt, it is going to do so to improve itself.
Think of it like the mortgage deduction in the US. If someone is making a lot of money, getting a home loan is one way to reduce taxes. Donating money to non profits is another.
The average person is more likely to take out a bigger loan (and buy a bigger home) rather than just donate to charity because the average person will do what is most advantageous to them.
Yes, there are exceptions, but they are exceptions. Countries are no different.
It's clear that the bailout program and austerity measures have not worked. Not for sure why the troika insists on going down this path. Unfortunately back in 2010 was the opportunity to go through managed bankruptcy. Might as well go through it now and kick Greece out of the euro if need be. Keeping the large amount of debt even with some or large amounts at low interest rates is just not feasible. Half of the loans should have been written off back in 2010 and the rest converted into low interest loans. Then make the demands to raise taxes and cut frivolous spending.
Machspeed007
Member
I agree with you that the EU doesn't yet have enough financial governing power (through union institutions) to make it a true financial Union (I'm hoping that it will).
I don't agree on the idea that some countries are money sink holes, and that's that. Every country should at least try to have the minimal growth to outpace debt interest rates and this is entirely possible, even for Greece.
As an european, I have no problem with financing the greek people. I just don't want to do it indefinitely, I just want to optimize the cost and fix the situation. Is it to much to ask?
To use the US as a rough example, there is simply no getting around the fact that some states will always produce more tax income than others, and other states will always require more money than they produce in taxes. It is simply a result of demographics, infrastructure, and specialization. This isn't wrong, and it isn't because these states have failed in some way. It is something that has been going on since the start of the US, and will continue as long as this country exists. It isn't a problem to be avoided, but a normal process. I live in California, one of the wealthier states in the nation. My tax money is used to keep less prosperous states afloat. I will never begrudge them that.
This is in part due to how the US government was designed from the beginning. In the US Senate, every state has equal representation regardless of size or population. This was specifically done to make sure smaller, less-populous states would not be side-lined by the large and wealthy ones. This is one of those under-appreciated advantages of the American political system, since it makes sure that money goes to states that need it the most, and that the viewpoints of these smaller states are not drowned out by larger interests.
The EU and Eurozone, which are currently suffering from the problem that their policy is being dominated by the nations with the economic clout to control the purse-strings, might benefit from giving more actual political power to their smaller members.
Yes. It would be likely that you would have to subsidise them in perpetuity. In Australia, a federation, the richer states have been transferring money to the poorer states as an equalising mechanism for over a hundred years. This is also the case in the US. Money gets moved around, some states are perpetual beneficiaries of federal money.
No one, aside from a very few, minds that some tax money from New York goes to pay welfare receipts in North Dakota, nor do people in Queensland mind if their income tax goes towards paying infrastructure costs in Tasmania. People in Germany seem to mind if their tax dollars goes into paying for roads in Bulgaria.
Further to this, people in the US all view themselves as American, they're happy to forego some of their own self-interest in order to help out with a problem in a distant part of the country, this is what we call patriotism. It's fairly strong in countries like the US, Australia and most nation states around the world. Germany went through an arduous process of bringing East Germany up to the standard of Western Germany.
The problem is that no one in Europe feels the same patriotism as a whole, yes, you're all "European" but there's no demos, no patriotism, no shared identity. They're trying to create a new identity and it really isn't going to work. In the same way that creating a new identity in the USSR "soviet" did not work.
Machspeed007
Member
Why? I don't get it. How are the Greeks so different then their neighbours so they can't produce more than what they consume and have to be subsided into eternity?
PdotMichael
Banned
They aren't. The were just running a big budget deficit since they joined the Euro because they had suddenly access to cheap loans.
Because they don't control their own currency.
Theonik
Member
Their neighbours are not in the Eurozone so can devalue their own currency. In a common currency it is inevitable that you will have to subsidise some states to near perpetuity, in fact, that is how a monetary union should work between unequal economies.
In the first place if the union is run correctly, the money should be paid, and the money is pretty much funnelled back into the larger economy. (what do you think the smaller state is buying with that money, it is essentially given money and acts as a market for the lender's goods)
If you believe otherwise, perhaps you should reconsider your stance towards the monetary union.
Machspeed007
Member
Neither is Italy or Spain but they are recovering.
Not controlling their own currency doesn't explain why would the Greeks be the only ones that have to be subsided perpetually.
Machspeed007
Member
There's one thing running a country at a loss for eternity and another making smaller gains then the rest of other countries. I have no problem in diverting the EU funding from bigger earners to smaller earners (or even countries running at a loss temporarily). That's what the 'cohesion programme' should be doing anyway.
What you are saying is that Greece cannot make any kind of economic gains while in the euro zone.
I must remind you at this point that Greece has defaulted 6 or 7 times before as well, while not in the eurozone.
Imagine you're in charge of a small island nation on a fixed currency that imports more than it exports (more euros leaving the country than going in). Do you imagine there could be a problem?
Machspeed007
Member
Well, we are getting somewhere, although 'island nation' isn't really necessary, this could be applied to any other nation in the eurozone. From Ireland, to Spain and Portugal.
So, why and what are the greeks importing that's so vital to their own survival? Why aren't they exporting enough to compensate?
Because you're a company looking to set up a new factory, are you going to set up in Greece or Germany? It costs roughly the same, and Germany has a lot of support for manufacturing, the skill base is readily available and the government makes it more favourable to set up shop there...where are you going to go?
Multiply this a thousand times. The euro makes everything in Germany cheaper, and everything in Greece more expensive. Germany gets the mountain of the benefit, while Greece gets shafted.
Theonik
Member
Because the Euro made it very difficult for them to compete. Greece was also lacking in infrastructure and needed money. Due to events after the second world war they had fallen behind their peers in this area.
You should also remember that not all countries can run with a trade surplus. For one country to do that other countries need to suffer, inevitably. Countries like Germany have benefited significantly from an undervalued currency there. They are getting theirs in the next 10 years though in the form of China ripping them a new one but they haven't properly realised it yet.
A fun anecdote is that Greece has actually managed to lose competitive advantage on their own olive oil exports to Germany. The Germans buy olives from Greece, press it into olive oil and are able to sell it cheaper than Greek exporters can.
That's interesting. Given that public transport isn't gated in Athens how would she know?!
Uncharted waters, but situation is different. Economy is growing, exports too, unemployment is back to figures from 2011 and budget deficit is predict to be below 3% this year. The main issue is still the debt, still high but at least is more or less stall.
Given the (small) reforms we did and government credibility (seen from outside), at least for now Portugal is a little more secure.
Danger is on upcoming elections in October. Opposition party leader is firing promises left and right, including some will increase expenses for sure. That's what we don't need given this turmoil. And specially if a majority is not elected, the scenario most likely.
Portugal default twice before the Euro with old currency (in a <10 years span)...
Think about what it means for everyone to export more than they import. Ireland and Portugal probably aren't great examples to hold up either. Their debts have both gone up heavily as well, while they started much lower than Greece's in the financial crisis.
Let's take the concept of bad banks and built a bad nation. Only imports, no exports.
Done.
Valkyria
Banned
Bullshit. If what is happening in my country with more homeless, increasing child poverty levels, and people needing charities to get food to eat is recovery I do not want it.
That is the problem, people are blinded and not seeing the whole picture, the EU is gonna crumble because millions of citizens in Europe are seeing it as the root of their suffering, and you can not thing about grand far away goals when you are starving.
The whole world should be grateful that form all this misery and suffering people are voting to left wing parties instead to see a full resurgence of nationalism and fascism.
Machspeed007
Member
Replace Greece with any other eurozone country and still, they manage.
Not anyone has to make exactly what Germany is producing at the exact price point.
Anyway, my feeling is that we are going slightly off-topic and I apologize for encouraging it.
My point is that Greece should be able to run in the positive gains with some smart effort, even in the eurozone. I don't buy the "it's impossible, Greece is forever doomed" rhetoric.
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