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Greece votes OXI/No on more Austerity measures

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P

PodcastFips

Member
Relaxed Muscle said:
I don't think creditors are everyone, and:



Dosn't seem that far from the truth, terrorism dosn't always implies the use of weapons and physical violence.
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Varoufakis repeatedly said he wanted to continue negotiations with Euro partners asap. Is it a good idea to insult your creditors to support this intention? Certainly not. It's just plain dumb.
 
C

chadskin

Member
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pigeon

Banned
Greenpaint said:
I'm from Finland, part of EU and Euro. In theory I would support a country named "Europe" or "European Union". In practice, I don't trust the current EU members enough to hand over the control. We are a tiny country in comparison to Germany, France and UK. We would simply be forgotten and our special needs ignored.
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This makes sense, but that's kind of the critical point of this whole mess.

If you're part of the euro zone, you already did hand over control. All it takes is an economic recession that hits Finland harder than its neighbors, and you'll be enacting policies drafted by the ECB just like Spain, Italy, and (maybe?) Greece.

If you really don't want other nations having control over yours, then this crisis is an important benchmark as to whether you should get out now or not.
 
H

Heartfyre

Member
Beefy said:
So who do we think will be next to have this vote?
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It depends largely on economic uncertainties in the future. The other countries that went through austerity have largely moved past those policies into growth again. Greece has been the exception to the rule, falling further into debt.

Majine said:
I guess my question was badly constructed.

What I meant was, is their fucked-ness(tm) lesser or bigger after this result?
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There's no way to tell, unfortunately. The vote, as it was constructed, failed to address any real points, but was simply a representation of the Greek public's feeling towards the European creditors. It's simply a result that will, to an unknown degree, affect dialogue during Tuesday's meeting. Short-term, though, Greece's banks are under threat until a formal agreement is reached. They probably won't be able to open as cash reserves run out.
 
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chadskin

Member
CJLevb0UAAAyHw0.png:large
 
P

pigeon

Banned
PdotMichael said:
battered wife syndrome or why does Greece still want to be part of that gang?
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One of the more tragic parts of this drama is that the countries that are suffering the most are the ones whose people actually want, presumably out of solidarity and noble ideals, to be part of the European Union. Remember that the last time the Greeks were asked, they were firm in their desire to remain in the euro and EU.
 
M

MonorailCat

Member
P

PdotMichael

Banned
Relaxed Muscle said:
Because German and the troika is not all the EU and it's inhabitants. Even if (for now) they German has a hold in the EU political power.
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Too bad that all other Euro countries are following the same policy about Greece.

Tsipras tried to etablished an opposition to Germany in Europe at the beginning of the year. He failed.
 
O

oti

Banned
What a week and what a day. It's weird being a German born and raised Greek. You see two Eurozones. The one that works and the one that doesn't. Whatever happens from now on, I can't but support my fellow Greeks in voting no. Just showing the world and the rest of Europe that the system does not work for all of us and that austerity can only help so much makes this an important day. Anyway, we'll see what happens.

One thing's for sure, family won't stop asking me for money but I'm used to that.
 
J

jakonovski

Member
Greenpaint said:
I'm from Finland, part of EU and Euro. In theory I would support a country named "Europe" or "European Union". In practice, I don't trust the current EU members enough to hand over the control. We are a tiny country in comparison to Germany, France and UK. We would simply be forgotten and our special needs ignored.

I think "European Union" as a country is possible, I clearly see that is where things have been headed. But I think that is still DECADES away.
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We are already on the way to being a victim. We can't devalue the currency, so the new government is already attempting to convert the economy to an austerity based model by eroding the basis of the welfare state. Huge cuts in public spending led to a near-fatal shock in the Greek economy, we're vulnerable to the same phenomenon because of the size of the public sector. Too bad we don't have a warm and hospitable climate.
 
K

Kuros

Member
MonorailCat said:
"The first thing we must do is take away the keys to his office. We have to restore stability to the system, with or without the help of the ECB. We have the capacity to print €20 notes," said one."

Yep, totally trustworthy government. Just printing more out of thin air will help everyone. Everybody will be a thrilled giving them more money for their threats.
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Yeah if they start printing their own Euros theyll be immediately ejected.
 
E

Ether_Snake

安安安安安安安安安安安安安安安
pigeon said:
One of the more tragic parts of this drama is that the countries that are suffering the most are the ones whose people actually want, presumably out of solidarity and noble ideals, to be part of the European Union. Remember that the last time the Greeks were asked, they were firm in their desire to remain in the euro and EU.
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I'll say it again, unions (of various types) make sense for weaker economies, not so much for rich ones, unless the rich unite to exploit the others. So southern Europe has far more to gain from working together, than the north has of having their own union. So in a way, the EZ has more chances of surviving with the southern members than with everyone in, or than with the south out. That's why I think that over the long term, the current EZ will fall apart and we will see new agreements among the southern countries that will be in dire need of it once they've all suffered enough from the austerity and short-handed position they have in the current union.

Doesn't mean they'll have their own shared currency, since for that to work there would be too many measures necessary that wouldn't pass, but they'll end up getting out of the EZ eventually and will look for another to improve their situations, and since all of them will have strongly similar needs the solutions will involve them all working together for that end.

Over the much longer turn, this will pave the way for a more united Europe, but it will happen first with the south and north separately rather than with everyone from the start.
 
C

chadskin

Member
ElTorro said:
Would bet money that this was their plan all along. Otherwise, many of their actions just don't make any sense.
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Yeah. I liked this quote from the WSJ a couple of days ago:
The Greek Prime Minister said in a televised statement that those accusing him of having a deliberate plan to take Greece out of the eurozone were telling lies. But what is certain is that if Mr. Tsipras had set out in January to take Greece out of the eurozone, it is very hard to think of anything he would have done differently.
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http://www.wsj.com/articles/it-looks-a-perfect-exit-stage-left-for-tsipras-1435783545
 
C

Coriolanus

Banned
Heartfyre said:
It depends largely on economic uncertainties in the future. The other countries that went through austerity have largely moved past those policies into growth again. Greece has been the exception to the rule, falling further into debt.
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Which? Ireland isn't even remotely close to their pre-crisis GDP, and neither are Portugal or Spain.
The same can be said for their debt to gdp ratios, which still are way the fuck higher than pre-crisis levels.
 
N

nelsonroyale

Member
Interesting...personally, I think they did the right thing. Now brace for interesting times...My thoughts are with people in need, regarldless of their country.

Right now, I am very mixed on the EU though. As a UK citizen I think it should exist, but it needs a massive overhaul. It has become too beaurocratic, too neo-liberal and too under the thrall of Germany.
 
G

giga

Member
Five possible future currency arrangements, from the WSJ.

Greece stays in the eurozone: This is the option likely to cause the smallest short-term disruption to the Greek economy. The Greek central bank would retain access to liquidity from the European Central Bank, and the Greek banks would stay on life support. This looks increasingly likely to be accompanied by some kind of further negotiated debt relief. To get it, Greece would almost certainly have to agree to more conditions of the sort successive Greek governments have found it hard to accept.

Greece keeps the euro, but sits outside the eurozone: Jacob Funk Kierkegaard of the Peterson Institute for International Economics in Washington calls this the “Montenegro option” and argues this is the most likely outcome should Greece exit the eurozone. This would not be “a new drachma, but Montenegro—i.e. Greece becomes just another relatively poor unilaterally euroized non-EU Balkan economy,” he writes here. In some ways, this would be the worst of all worlds because Greece would lose access to the ECB. Countries using a foreign currency as legal tender have no access to a lender-of-last-resort, which means that every bank liquidity crisis becomes a solvency crisis. They therefore tend to have stunted domestic financial sectors — which almost every academic study shows is bad for growth — or have a banking system owned by foreigners, which exports the lender-of-last resort role to other countries’ central banks. (Mexico didn’t adopt the dollar after the 1994-95 financial crisis — but in order to avoid an undue shrinkage of its banking sector, it allowed most of its banks to be bought by foreigners.)

A currency board: In this case, Greece would create a new currency but lock it to the euro – as Estonia did with the German mark in 1992 after it gained independence from the Soviet Union. The amount of new drachmas in circulation would be limited by the size of Greece’s international reserves: about $5.8 billion at the last count. Advocates argue that this would impose discipline on the Greeks — poor economic policies lead to an outflow of reserves and therefore of the domestic monetary base, which pushes up drachma interest rates, while good policies have the reverse effect. The drawback is that again the central bank is limited in its lender-of-last resort powers because it cannot create money freely. It also imposes discipline that, for now, may make it look unappetizing to Greece’s current rulers. It’s not much talked about, has a few enthusiastic and long-standing cheerleaders, but is a theoretical possibility. Here’s Steve Hanke arguing in favor.

A dual system: Here the drachma and the euro would circulate side-by-side. This has many historical precedents going back centuries. In practice, a dual system is likely to emerge when the Greek government runs out of euros and has to pay its domestic bills in government IOUs. The IOUs could at some future date be redeemed in euros, or could be eventually redeemed in drachmas, but they would initially be euro-denominated obligations of the government that would have a lesser value in the public mind than euro notes or coins. This state of affairs could continue for a long time, but there is an economic tendency called Gresham’s Law: ”Bad money chases out good.” Over time, euros would disappear from circulation because people would hoard them as a store of value – and people would spend the government IOUs. De facto, the drachma, whether or not it would so be called, would become the main means of exchange.

The new drachma: The move to the new drachma may well not come with a bang, but gradually — as described in 4 above. But an eventual formal switch of the currency would give Greece control over its own monetary policy. However, a new currency — which would likely float against the euro and other major currencies — would likely create enormous short-term disruption, not least because a heavy devaluation would follow and the banks would in effect be insolvent. Longer-term, it could be a motor for future growth of the Greek economy — because it would stimulate demand for Greek exports by lowering in real-terms the price of goods and services produced in Greece. The long-term effects of a devaluation depend on the quality of economic policies that accompany it. It will create inflation, by increasing the costs of imports. One important issue is how much the government raises wages and pensions to compensate for higher inflation. The more domestic wages and pensions are allowed to rise, the less impact the devaluation will have in stimulating Greek exports longer term and the lower the benefits to economic growth.
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http://blogs.wsj.com/brussels/2015/06/30/greeces-five-possible-future-currency-arrangements/
 
C

CTLance

Member
Amazing result. However, now that the proverbial shit has hit the fan, who knows how things will continue. Greeks and Eurostates better strap in for a rough ride. Things were bad before, but now... ooh boy.

Can't wait to get home and watch German TV. This is terrifying, don't get me wrong, but I am also relishing the slap across our politicians' faces.
 
R

Randomizer123454444

Member
pigeon said:
This makes sense, but that's kind of the critical point of this whole mess.

If you're part of the euro zone, you already did hand over control. All it takes is an economic recession that hits Finland harder than its neighbors, and you'll be enacting policies drafted by the ECB just like Spain, Italy, and (maybe?) Greece.

If you really don't want other nations having control over yours, then this crisis is an important benchmark as to whether you should get out now or not.
Click to expand...

~sigh~
I guess, if European Union as a country came to vote right now, I would vote "YES". EU has been invaluable in certain issues that are important to me. EU has done some negotiations, deals and rulings that we as a tiny country could never have done.

chadskin said:
WOW:


http://www.telegraph.co.uk/finance/...U-demands-as-Syriza-readies-IOU-currency.html
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Wait, can someone better versed in economics explain what this means/could mean? Because this sounds like a viable solution in my ears?
 
S

SymbiantXenos

Member
The Greek Analyst ‏@GreekAnalyst 3m3 minutes ago

#Greece Alt MinEcon Mardas: "Tomorrow banks will open normally; they will open in the exact way they operated on Friday"

closed then
 
Z

zou

Member
Coriolanus said:
Which? Ireland isn't even remotely close to their pre-crisis GDP, and neither are Portugal or Spain.
The same can be said for their debt to gdp ratios, which still are way the fuck higher than pre-crisis levels.
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austerity proponents tend to feel vindicated once there's positive growth, no matter how minuscule or whether total output is still way below historical levels. otherwise they might have to acknowledge how utterly wrong they are.
 
H

Heartfyre

Member
Coriolanus said:
Which? Ireland isn't even remotely close to their pre-crisis GDP, and neither are Portugal or Spain.
The same can be said for their debt to gdp ratios, which still are way the fuck higher than pre-crisis levels.
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I'm not comparing their economies to pre-crisis GDP. I'm saying that their economies have grown from their lowest points during the crisis. Ireland is the fastest-growing economy in the EU, for instance. Growing the economies of these countries to pre-crisis levels isn't in their interest anyway, as those levels proved unsustainable.
 
N

Negotiator

Member
Greenpaint said:
~sigh~
I guess, if European Union as a country came to vote right now, I would vote "YES". EU has been invaluable in certain issues that are important to me. EU has done some negotiations, deals and rulings that we as a tiny country could never have done.
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Agreed. A paneuropean referendum about the United States of Europe (fiscal/political union) wouldn't hurt. More democracy/power to the people!
 
C

Coriolanus

Banned
Heartfyre said:
I'm not comparing their economies to pre-crisis GDP. I'm saying that their economies have grown from their lowest points during the crisis. Ireland is the fastest-growing economy in the EU, for instance. Growing the economies of these countries to pre-crisis levels isn't in their interest anyway, as those levels proved unsustainable.
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united-states-gdp.png
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k.

A few quarters of tepid growth during a deflation does not sustainable growth make, mate.
 
P

persongr

Member
Could someone please explain how these IOUs would work? Varoufakis just states things here and there and it's rather hard to follow
 
B

bigmit3737

Member
Do all the countries in the Eurozone borrow the same amount of money? I'm trying to understand why Germany is doing well and Greece isn't. Does Germany have some rare natural resources? How are Spain, Italy and the rest of the countries doing and will they run into a similar problem in the future ?

Thanks.
 
W

Walshicus

Member
Heartfyre said:
I'm not comparing their economies to pre-crisis GDP. I'm saying that their economies have grown from their lowest points during the crisis. Ireland is the fastest-growing economy in the EU, for instance. Growing the economies of these countries to pre-crisis levels isn't in their interest anyway, as those levels proved unsustainable.
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That makes not one bit of sense.
 
D

Deleted member 231381

Unconfirmed Member
persongr said:
Could someone please explain how these IOUs would work? Varoufakis just states things here and there and it's rather hard to follow
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Currently, there are not many physical Euros, coins or notes, left in Greece, as the Greek government is/has used all of them to pay debts. This makes transactions difficult - how do you go down to the grocers and buy some food if you have nothing to exchange that food for? The Greek government wants to make sure economic business continues as normally as possible, so they need to introduce more notes - but they're not allowed to print Euros. Therefore, Greek government issues IOUs which it promises will be redeemable for Euros in the future - i.e., a note that says "In 10 years, the Greek government will pay you a Euro for this note".
 
C

Coriolanus

Banned
Crab said:
Currently, there are not many physical Euros, coins or notes, left in Greece, as the Greek government is/has used all of them to pay debts. This makes transactions difficult - how do you go down to the grocers and buy some food if you have nothing to exchange that food for? The Greek government wants to make sure economic business continues as normally as possible, so they need to introduce more notes - but they're not allowed to print Euros. Therefore, Greek government issues IOUs which it promises will be redeemable for Euros in the future - i.e., a note that says "In 10 years, the Greek government will pay you a Euro for this note".
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So... a fiat currency?

Real talk: i'm feeling all "brace your butts, keynesianism inc".
 
P

persongr

Member
Crab said:
Currently, there are not many physical Euros, coins or notes, left in Greece, as the Greek government is/has used all of them to pay debts. This makes transactions difficult - how do you go down to the grocers and buy some food if you have nothing to exchange that food for? The Greek government wants to make sure economic business continues as normally as possible, so they need to introduce more notes - but they're not allowed to print Euros. Therefore, Greek government issues IOUs which it promises will be redeemable for Euros in the future - i.e., a note that says "In 10 years, the Greek government will pay you a Euro for this note".
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This is going to be tricky with the percentage of technological illiteracy over here (rumors state this virtual currency will be all digital).

Thanks, btw.
 
F

Frankfurter

Member
Crab said:
Currently, there are not many physical Euros, coins or notes, left in Greece, as the Greek government is/has used all of them to pay debts. This makes transactions difficult - how do you go down to the grocers and buy some food if you have nothing to exchange that food for? The Greek government wants to make sure economic business continues as normally as possible, so they need to introduce more notes - but they're not allowed to print Euros. Therefore, Greek government issues IOUs which it promises will be redeemable for Euros in the future - i.e., a note that says "In 10 years, the Greek government will pay you a Euro for this note".
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And for good reason no one is gonna believe that promise.
 
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