The Greeks are small fry, wait til deutschebank goes wallop
Don’t make such idiotic comments so. You’re smarter than that.
It’s not about history of default, it’s about ability to pay it back. No shortage of lenders if there’s a likelihood of collecting. Argentina have no bother getting loans. Read up on the history of default. Pretty much always has positive consequences.
Depends. View that tourism is operating at full capacity or close to it. Little scope for growth there. What else does Greece sell to outside?
How do I use italics ?
‘Those nations that have thrived post devaluations (Argentina, Canada, Sweden) have been fortunate in that their trading neighbours had been growing strongly at the time. Greece does not have that luxury, nor an economy that can respond quickly to increased export competitiveness,’ he said.
‘We should also remember that whilst Argentina grew strongly post devaluation and debt restructuring, its current real GDP rate is just 0.5% and hard currency government bond yields are around 8%.’
Bringing the original yes voters Greece into the euro or old deutsch mark currency was always going to bit the Germans in the hole haha.
I don’t think they will let Greece leave, I can’t see it myself, Syriza putting up a referendum is genius as ultimately they can point to that if shit hits the fan even though the cunts have a mandate.
Excellent article from Gene Kerrigan today, best piece I’ve read on austerity and the EU/IMF in a long time.
#Soapbox: Greeks, beware of ‘adults in the room’
Enda Kenny lectures the Greeks on how to love austerity, while the IMF tries a coup
What’s been going on in recent weeks looks like a silent coup against the Greek government. It could be EU and IMF arrogance and incompetence, but it smells more like an attempt at regime change. It’s hard to know what role the Irish government is playing in this.
The media presents the Greek crisis as an austerity drama (‘Is time running out for Greece?’). The picture is one of a stubborn, inexperienced Greek government refusing - for ideological reasons - to accept an austerity programme that will allow it repay its debts.
In the face of this irresponsibility, hardworking IMF and EU officials try desperately to convince the feckless Greeks to see sense.
We could have real negotiations, moans Christine Lagarde of the IMF, if only there were “adults in the room”.
That’s the fairytale. But, given our own experience of how these “bailouts” work, we can see there’s something very different going on between the Troika and Greece.
The question for us is: Is the Irish Government complicit in this attempted coup, along with the EU ministers, the IMF and the ECB apparatchiks?
Or is it merely trotting alongside, trying to impress the others by giving the Greeks the odd kick?
We know that the Greeks got into debt because they’re lazy, compared with the hard-working Germans. And they haven’t had a glorious recovery because they refused to listen to Enda Kenny and implement austerity, unlike the sensible Irish.
The problem with this fairytale is that, according to OECD figures, the Greeks work 42.5 hours a week, on average, compared with 35.7 hours for the Germans.
As for austerity, they Greeks have cut 25pc of the public service. They pushed back retirement age. State assets have been sold off cheap to the usual suspects. The Troika has cut incomes so drastically that adult children have to move back to the family home, as they can’t afford to keep separate households.
The severity of the austerity forced on the Greeks exceeds that forced on the Irish. The Greek deficit in 2009 was 15.6pc. And by 2014 it was 2.5pc, an unprecedented and brutal “adjustment”.
From the beginning, the “adults in the room” have - even by their own standards - made a terrible mess of Greece. In 2010, the Troika ensured that private gamblers would be bailed out - with the private debt passed to the Greek people.
The IMF knew that applying severe austerity would cause the Greek economy to contract, but by a low single figure percentage. It contracted by 26pc.
The IMF knew that applying severe austerity would cause unemployment to soar to 15pc. It soared to 25pc.
With unemployment up to 50pc for young people, those with qualifications and skills the country needed just walked away. The growth that could have eased the recession was squashed out of existence.
By 2011, it was obvious that the Greek debt was unsustainable. The billions owed will not be paid because they cannot be paid. The IMF’s rules say it must not loan money to such a debtor - as the money will not be recovered.
A debt writedown, allowing the debtor to recover and become productive again, is required. But Merkel and the ECB said no.
The IMF broke its own rules. What mattered, first under Dominique Strauss-Kahn, now under Christine Lagarde, was saving the euro.
The Greek debt was continually rolled over - economic madness, but it allowed the Troika maintain political control.
And, so, the austerity hawks hammered the Greek people. It wasn’t just that their policies weren’t working, they were plainly making things worse. But the “adults in the room” kept hammering.
The Irish media, and particularly RTE, hardly ever mentions the Tsipras government without referring to it as “hard left”, “far left” or “radical left”. And that’s fair enough.
Never, ever, is Michael Noonan described as “hard right”, though he is. Never once is that label applied to Merkel, Draghi or the flint-eyed hitmen of the ECB, though that is their political position.
Never once have I heard a report explain that austerity, privatisation, protection of bondholders, deregulation, opposition to writedowns, the religious belief in austerity, are all aspects of a hard right wing position, one shared by Merkel, the ECB hitmen, the IMF and Fine Gael.
Instead, the hard right wing position is presented as the norm - the natural, sensible, agenda-free position. It’s just, y’know, the way you do things. Anything else is extreme.
So, the extremist ideology that underlay the credit bubble, that undermined economies and businesses, and that now destroys families, thrives by remaining unnamed and invisible.
The success of Syriza, being lefty outsiders, created a problem.
We know from the Troika’s visits here that it’s the bottom line that matters. As long as the austerity is inflicted at an agreed level, the Government is free to decide the detail.
In recent weeks, though, nothing the Greeks offered was acceptable.
It had to be the Troika’s way or nothing. The fine detail of measures affecting chemists and bakers became holy writ.
With a bit of luck, the “adults in the room” might push Greek unemployment above 30pc.
Last weekend, there was a calculated effort to cause a panic in Greece by raising fears that the banks wouldn’t open after the weekend. The conservative commentator Ambrose Evans-Pritchard, writing in The Telegraph, accused the Troika of “deliberately provoking a bank run . . . to force Greece to its knees”; and “consciously and deliberately accelerating a financial crisis . . . as a negotiating tactic”, while seeking “ritual capitulation for the sake of it”.
One of the remarkable things about the current crisis is that it isn’t just the left that sees the madness of the Troika’s plotting. Natural opponents of Syriza are disturbed by the contempt for democracy.
A silent coup is achieved by forcing a government to accept measures that will undermine its stability.
If Syriza accepts more rampant austerity, its own support may split, the measures may not get through parliament - and in the ensuing election, hard right parties may get to put a government together.
If Syriza says no, it is being manoeuvred into a position in which it can be accused of defaulting, and leaving the eurozone.
At this stage, the Troika may figure things are stable enough for the euro to survive such an exit. They might be right - they might not be.
The “adults in the room”, the EU, ECB and IMF, act as though they run Greece. They appear to see the presence of Alexis Tsipras, Yanis Varoufakis and their government as a technicality, an irritant.
Why can’t Alexis and Yanis be like that nice Enda, and his pal, Michael? They simper, they smile, they never disagree with anything the “adults in the room” decide.
It’s unlikely that Kenny and Noonan have any actual role in the silent coup.
And Enda lectured Tsipras on how he should do as Ireland did, and everything would work out fine.
“In Ireland’s case, we did not increase income tax - we did not increase Vat, we did not increase PRSI”, said Enda. And the Greeks should follow our lead.
The universal social charge, then, doesn’t exist - the various tax and Vat increases never happened - the water tax is a figment of our imagination.
I have no doubt Mr Kenny believes what he said: we’ve a paradise without tax increases. There are some consequences, of course.
Some sick people are deprived of treatment, some die prematurely; kids are robbed of the supports that could change their lives; the old dread the day they’ll need a hospital bed, But if you don’t mention the emigration, I won’t mention the suicides.
This is an appalling piece from Bloomberg on the same subject.
Apparently grandmas, taxi drivers and factory workers will be allowed to vote now. And if people if PhDs can’t figure out the economy then how could these half-wits be expected to? (No hint of recognising the odd logic in expecting the PhD graduates who caused this problem to be the only people capable of fixing it).
Economists with PhDs and hedge-fund traders can barely stay on top of the vagaries of Greece’s spiraling debt crisis. Now, try getting grandma to vote on it.
That’s what Prime Minister Alexis Tsipras is doing by calling a snap referendum for July 5 on the latest bailout package from creditors. The 68-word ballot question namechecks four international institutions and asks voters for their opinion on two highly technical documents that weren’t made public before the referendum call and were only translated into Greek on Saturday.
Worse, they may no longer be on the table. International Monetary Fund chief Christine Lagarde told the BBC late on Saturday that ``legally speaking, the referendum will relate to proposals and arrangements which are no longer valid.’’
Tsipras’s decision means everyone from fishermen to taxi-drivers and factory workers will have to form an opinion on the package, with their country’s economic future hanging in the balance. A rejection of the bailout terms could lead to an exit from the euro area and economic calamity; accepting them would probably keep Greece in the euro, but with more austerity.
“Usually in democracies, it’s the technocrats and the politicians who take care of the details, while voters are asked about broader issues and principles,” said Philip Shaw, the chief economist in London at asset manager Investec. “This is a transfer of responsibility from parliament to the voters.”
Tsipras’s surprise referendum came as lawmakers in his left-wing Syriza party voiced opposition to the bailout proposals and threatened to vote against them in parliament, potentially eroding his grip on power. Tsipras has said the proposals will add “unbearable weight” to Greece’s troubles.
Opinion polls show a majority of Greeks support retaining the euro, although further tax increases and spending cuts have few supporters in a country with 25 percent unemployment that’s seen its economy contract by a quarter since 2010.
###The Question
Greece’s referendum question will read as follows:
“Greek people are hereby asked to decide whether they accept a draft agreement document submitted by the European Commission, the European Central Bank and the International Monetary Fund, at the Eurogroup meeting held on on June 25 and which consists of two documents:
‘‘The first document is called Reforms for the Completion of the Current Program and Beyond and the second document is called Preliminary Debt Sustainability Analysis.
‘‘- Those citizens who reject the institutions’ proposal vote Not Approved / NO
‘‘- Those citizens who accept the institutions’ proposal vote Approved / YES.’’
The two documents reflect the complexity of Greece’s financial predicament. The first includes sections on ‘‘parametric budgetary measures’’ and ‘‘unified wage grid reform.’’ The second has a discussion of the methodological advantages of using ‘‘gross annual financing needs’’ to assess Greece’s debt burden, rather than the more traditional debt-to-GDP ratio.
Heavy Responsibility
‘‘What the government couldn’t decide on after five months of talks, the Greek people will have to decide in five days,’’ Antigone Limberaki, a lawmaker with small centrist party To Potami and an economics professor, said during a parliamentary debate on the referendum.
There have been almost no referendums on international bailouts of a country in financial crisis. Greece came close to one in 2011, when then-Prime Minister George Papandreou proposed and then canceled a plebiscite on a debt deal.
Before that, the last time Greeks went to the polls to decide a single question was in 1974, when they voted to retire their monarchy in favor of a presidential republic.
Some Greeks are concerned that the most important question isn’t even on the ballot this time.
###Euro Exit
‘‘People will vote based on whether they want the harsh measures or not, they may not realize that they’re actually voting on whether to stay in the euro,” said Erato Spyropoulou, who waited in line at a National Bank of Greece AG cash machine in Athens to withdraw money on Saturday morning. “I don’t want the harsh measures either. I’m in debt, but I don’t want to leave Europe.”
Investors are fretting about the same thing.
The ballot question “is dangerous in as much as it doesn’t link the consequences to the question, i.e. potential [euro] exit,” Josh O’Byrne, a strategist at Citigroup in London, wrote in a note to clients.
Eurogroup finance ministers have almost universally condemned the referendum plan, which Tsipras announced late Friday night without warning Greece’s creditors.
###Added Wrinkle
It leaves a broad range of questions for them and for the European Central Bank, which is providing emergency funds to keep Greek banks afloat.
There’s another potential wrinkle in the ballot question. It’s based on the state of play as of late this week, and thus on proposals that may no longer be on offer after Greece’s bailout expires on Tuesday and if Greece misses a payment to the IMF due on the same day.
Given the lead time for printing and distributing ballot papers in a country of 10 million residents spread over 227 inhabited islands, that means voters could be asked their opinion on proposals that aren’t even still on the table when they enter the voting booth.
Greek banks and stock exchange to remain shut tomorrow…
The real disappointment is why @Julio_Geordio can’t settle on whether to use this thread or the IMF overlord one to chart the Greek issues.
A fair criticism. Greek style laziness is the only answer.
Some week ahead for Greece. Death by decapation or life of indentured servitude.
For me default is the only option, but it will be some shit show.
I wonder what feta cheese will cost tomorrow?
Good article here.
There have been scenes of panic in northern Greece where pensioners have reportedly fainted outside banks in Salonika.
From Athens, Helena Smith reports:
Reports of panic outside banks, in supermarkets and at petrol stations are now coming through thick and fast. Pensioners, waiting outside closed banks in Salonika, collapsed when it became apparent that the lenders weren’t going to open and they would not be getting their monthly allowance.
An announcement may come later today:
— Keep Talking Greece (@keeptalkingGR)
June 29, 2015
#Greece’s FinMinistry to announce at 4 pm local time, which bank branches will be open for pensioners to withdraw pensions #capital_controls
In Crete, gas stations were also forced to close after running out of petrol.
Vangelis Kotsos, president of gas station owners in Chania, said around 50% of gas stations had now run dry and described scenes of chaos as nervous Greek motorists (and presumably visiting tourists) flocked to gas stations to fill up.
“A lot have been coming in carrying cans so they have extra reserves.”
I have been getting word from friends around the capital of panic in supermarkets now being stampeded by consumers worried that stocks will run out.
“Mayhem in Carrefour Kolonaki,” said one text, referring to Greece’s upmarket district above Syntagma Square.
Panicked buyers were snapping up everything in sight, not least staple foods such as sugar and flour.
By mid-morning it has become clear that a siege mentality appears to have taken hold of Greeks following the shock announcement of the closure of banks and imposition of capital controls.
I see the lazy cunts have given themselves a week long bank holiday now.
Juncker has said the referendum is a straight forward Yes or No to stay in the eurozone.
The panzers will have to bring their own diesel. Cunning plan should slow them up a bit.
