Troika does what troika does. You can argue against it but ultimately it’s power politics and you play the cards you have.
What the Irish gov did was work within that program and go around Europe quietly building support for incremental improvements in loan conditions etc. They also could alter the reform program within the overall troika parameters and did so. The ATM’s kept working and all economic indicators are now rebounding. There has been a lost decade of investment, emigration etc but it’s inarguable that things are improving again.
What Greece did is go grudgingly all the way with the troika - then elect a hard left gov who said they’d stop austerity i.e. selling pipe dreams who then wasted any small amounts of political capital by grandstanding around Europe, courting Putin etc. Meanwhile, the growth that was returning nosedived and tax returns stopped again as the Greek people presumed there was an easy way out because their gov comrades told them they had it sorted. Oops. Their ATM’s don’t work and the country is screwed.
Is that the official FG narrative? Did you copy and paste it?
Didn’t the current crowd promise to do a bargain with Europe? How did they get on? Didn’t they suggest burning senior bondholders, how did that one go? Over the last three years, who paid higher interest rates on their loans, us or greece?
The problem with this narrative is that it pre-supposes a comparative rejection of austerity measures by the Greeks, which wasn’t the case. They did implement major reforms and economic conditions continued to deteriorate. I don’t think the suffering in Greece is appreciated in anything other than an abstract, chattering class way in this country. But then again, that’s how we look at our own people too.
They don’t believe in austerity, which isn’t an unreasonable position given it’s track record and near absence of empirical justification. I don’t think they should be ridiculed for rejecting an extremist philosophy that’s being imposed on them by external actors. Yes, there will be severe consequences. But there are severe consequences for acquiescence too. It’s just that they don’t fit the narrative and are ignored.
The Irish ‘success story’ is my favourite part of the fantasy.
If you gut public services and let hundreds of thousands of your own people go to the wall, or the airport, investment houses can still recover their capital.
Yes - FG/Lab argued that they were going to burn the bondholders, talk tough to Berlin. I think they learned pretty quickly that ECB/Berlin/EU had different ideas and they pretty quickly toned that down. I think Pat Leahy’s book goes into how they were slapped down too.
Were they naive to think they could achieve significant debt relief? Probably.
Should they have tried unilateral action burning bondholders against the will of the troika? Very risky with the potential for a rapid decline into a Greek-like situation.
Was the troika views on debt and bondholders unpalatable? Yes and arguably economically unsound - however when the big boys with the sticks are wielding their influence it’s as much realpolitik as it is theoretical economics that determines the outcome. The notion that economics operates in a political vacuum is fairly notional.
I completely accept the level of drop in the Greek GDP and that they have taken significant austerity. I’d argue whether their political system or citizens have ducked and dived at times in relation to implentation and taxation etc but I’d also accept that I’m getting that information through a media that itself is subject to spin.
I can understand therefore why they “reject austerity”. However, the moment you cannot finance yourself or find lenders willing to finance you without pre-conditions, you’ve surrendered part of your economic sovereignty. Vote whoever you want into government and believe whatever easy solution fairytales they tell you. Curse your creditors all you like for their unwillingness to give you their taxpayers money. However, with voting comes responsibility and in my view the current Greek government have exacerbated the crisis the Greek nation is in and ultimately the Greek electorate shoulders that one.
My understanding is that a large amount of the current outstanding debt (and likely any future debt to finance the country) is from Eurozone countries rather than from private banks.
Again, I presume that this money is largely debt from the creditor countries i.e. they pay interest on it. Although I’d imagine in some cases the interest would be quite low.
Greece had 3 elections before electing Syriza, three elections where they elected parties who were willing to do austerity deals with Europe. Let’s not claim it was entirely forced on them, they made choices just like they’ve made a choice here.
From what I gather the total Greek debt is in the region of €320bn. About €240bn of that is now owed to the troika and other EU countries though the stability fund who essentially repaid the private lenders who lent to Greece in the first place.
Can the lefties on the board tell me where the Greeks spent all the money they borrowed from the private lenders in the first instance? That’s the bit that I have yet to grasp. I’m assuming they pissed it up against the wall and that’s why I have trouble getting behind any deal that’s overly generous to them.
It should also be noted, that while private bondholders are presumed to be fat cats etc and in some case are, in fact a large amount of the private purchasers of bonds are pension funds, mutual funds etc i.e. the savings and pensions of ordinary working class and middle class people across Europe.
I presume that while answering BT’s questions, the board lefties would re-assure us that they’d be comfortable that if haircuts were applied to the assets of these funds that they’d be comfortable with the knock on downward effect on those savings and pensions? A kind of solidarity thing where we all have to take some pain but we can feel good about it ???
A great day for the conspiracy theorists. China shut down trading in 50% of stocks overnight and barred large institutions from selling stocks for the next 6 months (didn’t stop their market dropping another 6%, now down 36% from its peak a few weeks ago). United Airlines compute system went down this AM grounding all flights worldwide for hours. The NYSE, the word’s largest exchange, shut down an hour ago and is still down. The Wall Street Journals site also went down, the source of information for many investors. Nothing to worry about though, everything is awesome.
