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[Deleted member 231381]

Hey, you can thank John Major for that. The only extent to which Brown helped was in his desire to do literally everything he could to undermine Blair, and thus kept us out. Who knows how many more countries we'd have bombed without his heroic disregard for his leader's wishes.

I don't think I can thank Major for that, given he tried his damndest to make the peg work. Perhaps George Soros?

Spoiler

One day I'll make you concede that Gordon Brown was good PM, Cyclops.

One day...

 

[PdotMichael]

You are Tsipras. You have been told you must go via the ESM. You cannot accept a proposal worse than the one your people rejected by referendum.

What do you propose? Or alternatively: do you even propose at all, or do you use some of the small time remaining to hope that other countries will come to their senses and allow direct ECB intervention?

I'm Tsipras and would declare that I would rather acceot a default + new currency than any new deals based on everything before the referendum. It's really that simple.

 

[Syriel]

Technically, what he's saying is that half of the countries in the euro should leave. Which is unfortunately true! Why stick around and be colonized?

The choice is realistically to go it alone, or merge with other countries to form a larger power. The EU as it is today is trying to have its cake (standard currency) and eat it too (individual sovereignty). It really should pick one or the other.

The problem with the Euro is that a currency union requires a strong political union. The United States is a strong political union. The European Union is not. Half the countries in the Euro shouldn't be in the Euro in the first place and would have been economically better off retaining their sovereign currencies.

Pretty much this.

While i understand that that kinda reasoning is A Thing That Exists, to me it is so akin to people shitting on the idea of raising the minimum wage because "gee goly, then i'll only be making x above the minimum wage, so fuck those entitled dicks", that i can't help but abhor it.

Dudes, like. Duuuudes. If they get a haircut, it becomes that much easier for you to argue for concessions too. Help a bro out and get helped right back.

For the richer countries that analogy may apply. For the poorer countries though, it's more like "Hey, I'm here in public housing, just barely paying the bills and the guy with the beachfront house is demanding that I help him? Why isn't he helping me?"

 

[Deleted member 231381]

I'm Tsipras and would declare that I would rather acceot a default + new currency than any new deals based on everything before the referendum. It's really that simple.

Okay, sure, fine. But now your criticism is effectively just "Tsipras is being too optimistic in hoping that the Germans want their own money back", which is as much a criticism of the German position as Tsipras.

 

[Relaxed Muscle]

I'm Tsipras and would declare that I would rather acceot a default + new currency than any new deals based on everything before the referendum. It's really that simple.

And no need for that until there's time for a proper solution.

 

[Heartfyre]

Today has been an interesting day for interpretations. Many of the other sources I've been following have been rather upbeat about the chances of a deal being made. In here, some of you think they're minting drachmas.

Not saying that a Grexit isn't a probable or even a likely scenario, but nothing's decided yet. It feels as though I've had to say that five times this week, but here we are again, kicking the can down the road until Sunday. Which, in itself, isn't a good sign, but at least it's beginning to smell like finality.

 

[Coriolanus]

For the richer countries that analogy may apply. For the poorer countries though, it's more like "Hey, I'm here in public housing, just barely paying the bills and the guy with the beachfront house is demanding that I help him? Why isn't he helping me?"

Precisely. Why would you demand that the dude be put in public housing too? Back him up AND ask for more yourself. Isn't this supposed to be a baller union for baller playas? Not like you couldn't use the help. Or that you can't see that he's dealing with some massive unemployment issues. Share the love, mang.

 

[PdotMichael]

Okay, sure, fine. But now your criticism is effectively just "Tsipras is being too optimistic in hoping that the Germans want their own money back", which is as much a criticism of the German position as Tsipras.

Yes, it's his goddamn job. A great statesman would change the narration of being the poor victim of the evil EU and Nazi Merkel to Greece as active actor with a clear concept for the future.

 

[cebri.one]

We bailed out banks, which are just companies 'because they cannot be allowed to fail'. Yet Greece can be allowed to fail?

Yep, and that's why it was bailed out in 2010. And 66% of their debt to gdp was condoned in 2012.

I have the impression that a lot of people in this thread are making some statements without having basic knowledge of the situation in greece, and how it has been developing during the last 5 years.

 

[Coriolanus]

Yes, it's his goddamn job. A great statesman would change the narration of being the poor victim of the evil EU and Nazi Merkel to Greece as active actor with a clear concept for the future.

Which is why he kept pushing for the future of a united Yurop, stronger than ever. Fwiw

 

[CyclopsRock]

I firmly believe there's no sense of an EU without the Eurozone, basically a true economic union was the endgame of the whole political project. Otherwise it will be something in which we send our ministers for holidays every few weeks for meaningless meetings...like right now. Oh, and no need for passports...that's cool I guess.

But who cares what the "endgame" was meant to be? I'm all for vision and that, but the vision's absolute shit in this case, so junk the rubbish and keep the good stuff, no? We can maintain a trade union, free passage of people and products, legislation about, I dunno, fucking bendy bananas or whatever the Mail says today, without everyone sacrificing their ability to actually manage their economy. How's about that?

I don't think I can thank Major for that, given he tried his damndest to make the peg work. Perhaps George Soros?

Spoiler

One day I'll make you concede that Gordon Brown was good PM, Cyclops.

One day...

Ok, Major had a few misteps, but that crazy fucker sorted us out good and proper at Masstricht, praise Jesus. And I sometimes forget Brown was ever PM, that bigotted woman, amongst the fog and haze of his being immediately ejected from office as soon as the population had the opportunity to do so. He'll go down in history books as "The PM with the rugby injury" and nothing else.

 

[PdotMichael]

Which is why he kept pushing for the future of a united Yurop, stronger than ever. Fwiw

Sure, that worked out. They are completly isolated in Europe.

 

[Deleted member 231381]

Yes, it's his goddamn job. A great statesman would change the narration of being the poor victim of the evil EU and Nazi Merkel to Greece as active actor with a clear concept for the future.

This is a bizarre stance to take. There is still time left to negotiate. It seems very unlikely, but there is some small chance that Merkel will have her arm twisted by Hollande and Renzi and we get a deal on Saturday that has a partial haircut and Greece remaining in the Euro. If Tsipras defaulted now, we'd never find out. Like, you say "he just pick a decision and go with it!", but he can't do that. He is dependent on what others do. Greece will default on the 20th if it can't make a deal by Sunday, so why not wait the 5 days to see what might come up?

 

[SymbiantXenos]

Greece would still have to take drastic reforms even with an exit. It's a choice between awful and really awful.

 

[pigeon]

Today has been an interesting day for interpretations. Many of the other sources I've been following have been rather upbeat about the chances of a deal being made. In here, some of you think they're minting drachmas.

Not saying that a Grexit isn't a probable or even a likely scenario, but nothing's decided yet. It feels as though I've had to say that five times this week, but here we are again, kicking the can down the road until Sunday. Which, in itself, isn't a good sign, but at least it's beginning to smell like finality.

I'm optimistic for a deal here. The general tenor of the discussion has changed from "Greece has to take this deal and also fire Tsipras" to "Greece isn't getting a 'haircut' haircut, but let's talk more." There are lots of options for Greece to get meaningful debt relief that aren't technically haircuts, so this is a political door opening. The question is whether Europe can squeeze through it.

It does seem like Greece is going to need to accept some "reforms" along with the relief, which isn't likely to be helpful, but if the political will is there those reforms can be held to things that are least likely to destroy the economy more.

That said, I'm not sure that this is actually the right long-term solution! A political squeaker that allows everybody to claim victory means there's no public pressure on the EU to build a stronger fiscal union. That doesn't mean there's no pressure, but it arguably might be better for Greece, Spain, etc. for the crisis to precipitate now. If the EU is going to take a decade to improve, then the countries that are in depressions right now should probably bail out rather than wait.

 

[CyclopsRock]

I just imagine Osborne has spent the last week in a giant, leather office chair, smoking a cigar and just laughing madly to himself.

And writing a budget.

 

[cebri.one]

Let's not forget some facts

Greece was in a much better situation from a macroeconomical point of view last december than now.

 

[Coriolanus]

Sure, that worked out. They are completly isolated in Europe.

Being united in their hate still counts, mate.

 

[Deleted member 231381]

I'm optimistic for a deal here. The general tenor of the discussion has changed from "Greece has to take this deal and also fire Tsipras" to "Greece isn't getting a 'haircut' haircut, but let's talk more." There are lots of options for Greece to get meaningful debt relief that aren't technically haircuts, so this is a political door opening. The question is whether Europe can squeeze through it.

It does seem like Greece is going to need to accept some "reforms" along with the relief, which isn't likely to be helpful, but if the political will is there those reforms can be held to things that are least likely to destroy the economy more.

That said, I'm not sure that this is actually the right long-term solution! A political squeaker that allows everybody to claim victory means there's no public pressure on the EU to build a stronger fiscal union. That doesn't mean there's no pressure, but it arguably might be better for Greece, Spain, etc. for the crisis to precipitate now. If the EU is going to take a decade to improve, then the countries that are in depressions right now should probably bail out rather than wait.

I'm less pessimistic after Hollande's statements, but if the deal is reached, I basically agree with the last paragraph. It will be a fudge.

 

[PJV3]

Really, though? I mean, is there any positive version of the future in which you can see the Greek Economy and the German Economy happilly sharing the same central bank and same currency, given their wildly different needs when it comes to fiscal policy? Sure, you can avoid Greece going "belly up" in the short term, but does anyone in this thread genuinely think that it's in Greece's best interests in the medium to long term to stay in the Euro?

I'm not going to pretend to know the future and in the long run leaving the euro may be for the best.

But somehow the EU has made the IMF look more reasonable. I have gone from being fairly pro EU to Anti over the last few years.

 

[Vlodril]

You cannot have a proposal in on time if there is no proposal you can feasibly make. You cannot have your communications fully clear if there is a huge incentive by a number of other actors to have your statements muddied as much as possible.



The people of other European nations have a choice between a haircut, in which they only get some money back, and a default, in which they get no money back. Pretending there is a third option (Greece rolls over and accepts the fact its economy is going to pillaged and its youth crushed to pay back some hopeless debt mountain it will never reach) is never going to happen unless Tsipras is more of a coward than he has appeared so far.

Doesnt help that all the previous greek leaders in this crisis were actually cowards and backed off every single time thus creating a precedent for that kind of thing.

In the end i think looking for a scapegoat (from both sides supporters) is the easy and wrong thing to do. No it is not greece's fault that the euro is set up wrongly and we never reached even the proposed level of union (euro constitution,army let alone a better fiscal union). It is not europe's fault that greece has been unable to do crucial changes it needs (although we did make changes just the wrong or incomplete ones).

And last but least its not greece's fault that germany and all the other countries must think of their electorate first and visa versa. Both sides are unable to reach a compromise (at least so far) exactly because europe is not a single entity but 19 (or 28) countries and all of those countries have failed in actually fostering a common ground (we as in we europe and not we X country).

Also people that think that greece leaving the euro will magically fix europe's problems and that the rest of the pigs wont be next are deluded as hell.

 

[le-seb]

Which is why he kept pushing for the future of a united Yurop, stronger than ever. Fwiw

"Hey guys, we can't follow the rules of the game.
What about changing them?"

 

[Deleted member 231381]

Also people that think that greece leaving the euro will magically fix europe's problems and that the rest of the pigs wont be next are deluded as hell.

This is the worst part. I'm glad I'm not Portuguese right now.

 

[Relaxed Muscle]

But who cares what the "endgame" was meant to be? I'm all for vision and that, but the vision's absolute shit in this case, so junk the rubbish and keep the good stuff, no? We can maintain a trade union, free passage of people and products, legislation about, I dunno, fucking bendy bananas or whatever the Mail says today, without everyone sacrificing their ability to actually manage their economy. How's about that?

IMO
It's not worth it then.

 

[chadskin]

The ELA is effectively a short-term version of what could be an ECB-programme - effectively ELA in perpetuity, or at least until the Greek economy recovers. Draghi has covered a few times why he won't do it (e.g., in March here: http://www.reuters.com/article/2015/03/26/us-ecb-draghi-greece-idUSKBN0MM22820150326) - note especially that these are not legal restrictions on doing it just opinions as to why he wouldn't currently do it. ECB options *were* discussed months ago but dropped because it wasn't politically feasible then - presumably because creditors thought Greece would accept any offer and therefore weren't willing to accept what was tantamount to a currency devaluation given that would reduce the eventual return on their investment. Following the referendum, it should have been discussed again - especially as Varoufakis has displayed key interest in the programme (e.g., here: http://yanisvaroufakis.eu/2015/01/15/on-the-ecbs-great-contradiction-and-how-it-helps-greece/). The fact it hasn't is because Germany has made clear in repeated public statement after public statement they expect things to go through the ESM - probably because that requires assent from national parliaments and thus gives e.g. Merkel (plus other sceptical heads of state) greater leverage.

It's not a conspiracy, it's a an open decision. Nobody is hiding it.

The ECB does not have the mechanisms in place like the ESM which was founded precisely for the situation Greece is in. No one really knows what would happen if Greece were to default on the ECB bonds and what kind of an impact it would have on the ECB as well as the EU member states.

It'd be a risky gamble to take, hence I'm not surprised that Varoufakis played with the idea at some point, but one that doesn't need to be taken given the existence of the ESM.

 

[Peyotl]

A country is going belly up and it can be avoided, I'm dumbstruck by it.

The people in Europe should be better than this, we're making the tea party look sensible.

When you look at how media in German speaking countries reports on this issue (i am not familiar with other countries' media), its hardly a surprise.
Internet is not helping either.

There is a serious need for a media that can actually function as a public sphere.

 

[Theonik]

Sure, that worked out. They are completly isolated in Europe.

That says more about the priorities of the Eurozone than Tsipras.

"Hey guys, we can't follow the rules of the game.
What about changing them?"

Nein we do what is written in ze paper until we die.

 

[spwolf]

Y'all looking at this the wrong way.

This is masterplanning on both sides.

Tsipras doesn't want to take a shit deal, both because a) it would be a shit deal and b) because it would be political suicide, probably not even managing to clear parliament. He considers grexit a better option than a shit deal/political suicide.

Merkel doesn't want to offer a proper deal, both because a) it would be political suicide and b) it would be political suicide. Also because it wouldn't clear the bundestag. She considers grexit a better option than political suicide. What applies to Germany goes for everybody that ever took (or let their party take) advantage of lazy greek rethoric, obv.

Thus we come to an impasse where Greece will refuse any deal that won't have debt relief from moment zero, since it is fucking delusional, and Germany will refuse any deal that has, because fuck trusting those syriza cunts that will probably end up having to ask for another handout again in the medium term. At which point we proceed with the god damned Grexit.

Greece gets to blame Germany.
Germany gets to blame Greece.
German voters are happy that they won't be funnelling more money to their banks via Greece. Greek voters go through hell with possibility of improvement.

Default and que sera sera.

indeed... but the main problem is that whatever happens, Greece wont get out of it without proper reform of public sector.

I was reading over Greek government proposals from last week or so... I mean with such rampant tax evasion, they are "proposing" new independent "tax police" unit.

What is there to "propose"? Most of their "proposal" is common sense that they should have implemented back in 2009, or 6 months ago when new guys came into power. They should seek to improve efficiency of public sector, stop tax evasion and remove much of the bureaucracy on their own - not wait as if it is concession to the creditors.

Of course, it is silly to believe that Greece can go back to Drahma anyway... that requires fiscal responsibility that they dont have... they would just keep printing it to pay for government expenses and then they would end up with crazy inflation and worthless currency.

 

[Coriolanus]

"Hey guys, we can't follow the rules of the game.
What about changing them?"

Sure. I mean, more like "hey guys... you do know that there ain't no way that this deck i've inherited can hope to compete in this thing, yes? How about we try something different? Otherwise there ain't no point in me sticking around."

But yes, of course. If you get dealt a raw hand, you fold. If you get consistently dealt a raw hand, you go all danger danger will robinson and get out.

I was reading over Greek government proposals from last week or so... I mean with such rampant tax evasion, they are "proposing" new independent "tax police" unit.

What is there to "propose"? Most of their "proposal" is common sense that they should have implemented back in 2009, or 6 months ago when new guys came into power. They should seek to improve efficiency of public sector, stop tax evasion and remove much of the bureaucracy on their own - not wait as if it is concession to the creditors.

Of course, it is silly to believe that Greece can go back to Drahma anyway... that requires fiscal responsibility that they dont have... they would just keep printing it to pay for government expenses and then they would end up with crazy inflation and worthless currency.

While i am not discounting the validity of your points, the new guys have been in power for five months, not six, and they've had quite a bit on their plates ever since.
Another really weird part is why the EU kept tolerating all the other guys and winking and nudging at their efforts to fix that mess.

Except for the last paragraph. That is straight cray.

 

[Deleted member 231381]

The ECB does not have the mechanisms in place like the ESM which was founded precisely for the situation Greece is in. No one really knows what would happen if Greece were to default on the ECB bonds and what kind of an impact it would have on the ECB as well as the EU member states.

It'd be a risky gamble to take, hence I'm not surprised that Varoufakis played with the idea at some point, but one that doesn't need to be taken given the existence of the ESM.

I mean, it clearly does, because any ESM route goes through national parliaments, which, judging by current attitudes, will reject any offer that actually offers Greece a genuine way to remain in the Euro. The ECB's primary function is to ensure the stability of the Euro, preventing Greek exit seems like a fair way of doing that.

 

[pigeon]

Of course, it is silly to believe that Greece can go back to Drahma anyway... that requires fiscal responsibility that they dont have... they would just keep printing it to pay for government expenses and then they would end up with crazy inflation and worthless currency.

Here we go again.

 

[le-seb]

Nein we do what is written in ze paper until we die.

Nobody can fix the mess in the Greek society but Greeks, though.

 

[Relaxed Muscle]

indeed... but the main problem is that whatever happens, Greece wont get out of it without proper reform of public sector.

I was reading over Greek government proposals from last week or so... I mean with such rampant tax evasion, they are "proposing" new independent "tax police" unit.

What is there to "propose"? Most of their "proposal" is common sense that they should have implemented back in 2009, or 6 months ago when new guys came into power. They should seek to improve efficiency of public sector, stop tax evasion and remove much of the bureaucracy on their own - not wait as if it is concession to the creditors.

Of course, it is silly to believe that Greece can go back to Drahma anyway... that requires fiscal responsibility that they dont have... they would just keep printing it to pay for government expenses and then they would end up with crazy inflation and worthless currency.

Let's say the independent tax police consists of...500 public workers, you have to bring high qualified people with decent salaries to avoid being "bought" by companies and individuals. You need, maybe even formation, office space, materials and equipment so they can do their job in a effective manner and probably more things I'm forgetting.

That's money dude(and time), and Greece dosn't have money when they are being cut constantly in their expenses, that's why it has to be "proposed".

 

[Coriolanus]

Let's say the independent tax police consists of...500 public workers, you have to bring high qualified people with decent salaries to avoid being "bought" by companies and individuals. You need, maybe even formation, office space, materials and equipment so they can do their job in a effective manner and probably more things I'm forgetting.

That's money dudem(and time), and Greece dosn't have money when they are being cut constantly in their expenses, that's why it has to be "proposed".

Could've just brought the german auditors though.

Sure, they'd most likely be murdered in broad daylight, sparking an international incident, but could be done.

 

[Heartfyre]

I'm optimistic for a deal here. The general tenor of the discussion has changed from "Greece has to take this deal and also fire Tsipras" to "Greece isn't getting a 'haircut' haircut, but let's talk more." There are lots of options for Greece to get meaningful debt relief that aren't technically haircuts, so this is a political door opening. The question is whether Europe can squeeze through it.

It does seem like Greece is going to need to accept some "reforms" along with the relief, which isn't likely to be helpful, but if the political will is there those reforms can be held to things that are least likely to destroy the economy more.

That said, I'm not sure that this is actually the right long-term solution! A political squeaker that allows everybody to claim victory means there's no public pressure on the EU to build a stronger fiscal union. That doesn't mean there's no pressure, but it arguably might be better for Greece, Spain, etc. for the crisis to precipitate now. If the EU is going to take a decade to improve, then the countries that are in depressions right now should probably bail out rather than wait.

Yeah, I agree. I'd say a deal is likely for short-term relief on capital control and the July 20 ECB debt, and maybe even the longer-term deal, but it doesn't solve the structural problems. There is that foundational flaw in the Euro: every country has a vested interest in it, but the isolation and disparate fiscal policies among all the Eurozone countries is the weak point that Greece is exposing. The easiest solution is a centrally-enforced and controlled continent-wide fiscal policy, but that is a scenario that I can't see gaining popular support nowadays, especially with the rise of the nationalist parties, such as the French National Front and the PVV in the Netherlands. If it were pre-crisis, maybe, but it's too late for that. It's a system that I think could be to the Eurozone's benefit, as it would likely ensure that such a situation never happens again, but I think the situation in Greece has soured everybody to seeing the current crop of politicians chipping away at national sovereignty. To many, the cure is worse than the disease. Perhaps a middle ground could be reached on a combined fiscal policy in future (Europe was about compromise at some point, apparently?), but any steps towards that have to wait until the current mess is cleaned up.

 

[Relaxed Muscle]

Could've just brought the german auditors though.

Sure, they'd most likely be murdered in broad daylight, sparking an international incident, but could be done.

Bild titular:

"Greece don't only want our tax money, they want our auditors too, so the can go to beach and relax while we do their job!"

 

[pigeon]

Yeah, I agree. I'd say a deal is likely for short-term relief on capital control and the July 20 ECB debt, and maybe even the longer-term deal, but it doesn't solve the structural problems. There is that foundational flaw in the Euro: every country has a vested interest in it, but the isolation and disparate fiscal policies among all the Eurozone countries is the weak point that Greece is exposing. The easiest solution is a centrally-enforced and controlled continent-wide fiscal policy, but that is a scenario that I can't see gaining popular support nowadays, especially with the rise of the nationalist parties, such as the French National Front and the PVV in the Netherlands. If it were pre-crisis, maybe, but it's too late for that. It's a system that I think could be to the Eurozone's benefit, as it would likely ensure that such a situation never happens again, but I think the situation in Greece has soured everybody to seeing the current crop of politicians chipping away at national sovereignty. To many, the cure is the worse than the disease. Perhaps a middle ground could be reached on a combined fiscal policy in future (Europe was about compromise at some point, apparently?), but any steps towards that have to wait until the current mess is cleaned up.

Kind of the sad part here is that the nationalist parties are gaining power because of the damage to the economies done by austerity-based policies -- which are intimately tied into the euro in the first place.

They can't get the reforms because not having the reforms already screwed everything up.

 

[Deleted member 231381]

Yeah, I agree. I'd say a deal is likely for short-term relief on capital control and the July 20 ECB debt, and maybe even the longer-term deal, but it doesn't solve the structural problems. There is that foundational flaw in the Euro: every country has a vested interest in it, but the isolation and disparate fiscal policies among all the Eurozone countries is the weak point that Greece is exposing. The easiest solution is a centrally-enforced and controlled continent-wide fiscal policy, but that is a scenario that I can't see gaining popular support nowadays, especially with the rise of the nationalist parties, such as the French National Front and the PVV in the Netherlands. If it were pre-crisis, maybe, but it's too late for that. It's a system that I think could be to the Eurozone's benefit, as it would likely ensure that such a situation never happens again, but I think the situation in Greece has soured everybody to seeing the current crop of politicians chipping away at national sovereignty. To many, the cure is worse than the disease. Perhaps a middle ground could be reached on a combined fiscal policy in future (Europe was about compromise at some point, apparently?), but any steps towards that have to wait until the current mess is cleaned up.

Been saying this for pages. Either the wealthier Eurozone states agree to a fiscal-transfer scheme, or the Euro is a doomed project. Greece is just the tip of the iceberg. Portugal is running a 3.5% deficit as we speak and has hit 128% of GDP in debt.

 

[chadskin]

I mean, it clearly does, because any ESM route goes through national parliaments, which, judging by current attitudes, will reject any offer that actually offers Greece a genuine way to remain in the Euro. The ECB's primary function is to ensure the stability of the Euro, preventing Greek exit seems like a fair way of doing that.

Why should it not be put up for debate at the national parliaments which represent the people of the EZ members whose money we're talking about here? The ECB route eliminates the national parliaments but if Greece were to default on the ECB bonds it would still be the taxpayer's money at stake. Doesn't sound fair to me.

The national parliaments have just as much right to reject or approve any and all offers just like the Greek had to in their referendum. For that, Greece has to actually put forward a proposal, though (which they've done now according to media reports).

 

[Deleted member 231381]

Why should it not be put up for debate at the national parliaments which represent the people of the EZ members whose money we're talking about here? The ECB route eliminates the national parliaments but if Greece were to default on the ECB bonds it would still be the taxpayer's money at stake. Doesn't sound fair to me.

No? Why would it be? If Greece defaults on what it owes the ECB, the ECB can create new money to cover it. That's the entire point of a lender of last resort, and why sovereign monetary policy is so good. It could mean some inflation... but Greece's economy is so small that it seems unlikely to affect the Eurozone.

 

[KingSnake]

Greece would still have to take drastic reforms even with an exit. It's a choice between awful and really awful.

That's clearly the case. Greece needs to reform its public spending and its economy, but doing so under the assumption that they still have to pay a debt of 118% of GDP in 2030 (15 years from now) while meanwhile they will have near 0 euro for public investments in economy means a faith worse than death, really. A default will force them to tackle the public expenses issues, as nobody will lend them money, so they must keep away from a deficit.

 

[pigeon]

Austerity in action!

 

[Fintan]

How will Ireland be affected by all of this?

 

[Heartfyre]

Kind of the sad part here is that the nationalist parties are gaining power because of the damage to the economies done by austerity-based policies -- which are intimately tied into the euro in the first place.

They can't get the reforms because not having the reforms already screwed everything up.

It's despairingly cyclical, I agree.

Been saying this for pages. Either the wealthier Eurozone states agree to a fiscal-transfer scheme, or the Euro is a doomed project. Greece is just the tip of the iceberg. Portugal is running a 3.5% deficit as we speak and has hit 128% of GDP in debt.

Oh, I've seen it! And I agree! Although I'm unsure of your own thoughts on the solution, I've been hoping to see a combined fiscal policy that would attempt to fix the foundational problem, rather than the seemingly-prevailing view that we should just scrap the currency entirely. I'm reminded of the benefits of the euro every time I visit the UK, and have to endure so much more bureaucracy and excessive charges than any visit to a Eurozone country. I've been living in the Netherlands and accessing my Irish bank at ATMs with no charges whatsoever, while I get reamed while using a bank machine in the UK. While that's simply a measure of the personal benefits I experience, it's one small part of a benefit spread among millions.

Europe and the euro have a lot of changing to do if we can ever get the house in order, but I'd much prefer we build on them rather than tear them down.

 

[Deleted member 231381]

How will Ireland be affected by all of this?

In the short-term, not very much. Things you buy from non-Euro states might become slightly more expensive.

 

[Coriolanus]

So, uh, Tusk dropped some tusk bombs:

The European Council president says:

All sides of the negotiations share responsibility for the current status quo. That is why today I called leaders to try to find a consensus which will be our common success with no losers or winners.

If that doesn’t happen, it will means the end of the negotiations with all the possible consequences including the worst case scenario where all of us will lose.

Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system. And for sure, it will be most painful for the Greek people.

I have no doubt that this will affect all of Europe, also in the geo-political sense.

If someone has any illusion that it will not be so, they are naive.

The stark reality is that only have five days to find the ultimate agreement.

Until now I have avoided talking about deadlines, but tonight I have to say it loud and clear - the final deadline ends this week. All of us are responsible for the crisis, and all of us have a responsibility to resolve it.

 

[SmoothBrain]

Nein we do what is written in ze paper until we die.

How does using german words and pronounciation help the discussion and why did you choose it in the first place?

Been saying this for pages. Either the wealthier Eurozone states agree to a fiscal-transfer scheme, or the Euro is a doomed project.

I would agree, but that doesn't even work in germany itself. You have mainly Bavaria and 3 or 4 other states paying for the rest of them. Greece, Portugal and probably Spain would be in the same position as Berlin, burning through the money without a real improvement over decades. Berlin even had a couple of social measures that Bavaria wasn't able to afford anymore. Plus, you already have a couple of transfer payments, for example for agriculture.

Transfer payments might also lead to a before-crisis mentally on spending habits and lower the will for necessary reforms and restructures. Juncker is right, there is no easy solution and if there was, it probably isn't the right one.

 

[chadskin]

No? Why would it be? If Greece defaults on what it owes the ECB, the ECB can create new money to cover it. That's the entire point of a lender of last resort, and why sovereign monetary policy is so good. It could mean some inflation... but Greece's economy is so small that it seems unlikely to affect the Eurozone.

If only it were that easy.

Among other things, the Germans fear that if, for instance, the ECB starts buying lots of Italian government bonds, it will take the pressure off Rome to reform and put its public finances in order. They reason that this could eventually put the ECB in an impossible position: keep buying the bonds of a by-then-insolvent Italy or precipitate a default in a 2.1-trillion-euro bond market — the eurozone’s biggest — that may impose hefty losses on the ECB’s shareholders, not least the German government, and doubtless shatter the euro. Moreover, Germany’s Constitutional Court objects to open-ended ECB commitments that may entail open-ended losses for German taxpayers. Since Draghi dare not offend Germany too much, any QE program will be limited and hedged with conditions.

http://foreignpolicy.com/2015/01/21/the-ecbs-damned-if-you-do-qe-moment/

 

[spwolf]

While i am not discounting the validity of your points, the new guys have been in power for five months, not six, and they've had quite a bit on their plates ever since.
Another really weird part is why the EU kept tolerating all the other guys and winking and nudging at their efforts to fix that mess.

Except for the last paragraph. That is straight cray.

6 months is a long time, they should not be proposing things like that to creditors, they should be implementing it right away - of course, results will be seen in 2 years from now BUT they should have started on it right away and not keep it as concession.

Lets forget about raising taxes, lowering pensions and benefits for a second here... if Greek government implemented proper reforms that would cut tax evasion, increase government efficiency and apply a lot of common sense to banish silly laws that curb economic development, then they would like not be in this position today.

And without these measures, Euro or Drahma does not matter... it is short term solution and we will have everything happen all over again very soon afterwards. Likely problem is that implementing these measures will not be popular in the country where tax evasion in common sense - both for small folks that vote as well as for big benefactors that pay for public campaigns.

 

[Deleted member 231381]

If only it were that easy.

http://foreignpolicy.com/2015/01/21/the-ecbs-damned-if-you-do-qe-moment/

Yes, but this goes back to what I was saying: this is a political decision by Germany. The ECB could act to do this. It is perfectly feasible for Draghi to cut Merkel out of the decision entirely, sit down, and say to Greece "if you pass reforms x, y, and z, we will buy your bonds for the next n years". Note that this is still dependent on reforms happening, but it also actually gives Greece the capacity to actually undertake those reforms. Trying to stick to the ESM is literally madness. It costs money to implement reforms - you think tax auditors are free? No, you have to hire them, train them, give them office space. Greece is paralyzed at the moment. They can't do anything even if they wanted to.