dre Posted July 13, 2015 Report Share Posted July 13, 2015 The problem is that Greece never adopted any reforms and still hasn't fixed it tax collecting problems. Thats a problem but the biggest problem is that a small agrarian economy has shackled itself to a currency and interest rates that are meant for a high productivity manufacturing economy like Germany. Quote Link to comment Share on other sites More sharing options...
GostHacked Posted July 14, 2015 Report Share Posted July 14, 2015 . Tear gas will be flying in Athens before long. Already happened in 2010.Replay Quote Link to comment Share on other sites More sharing options...
TimG Posted July 14, 2015 Report Share Posted July 14, 2015 Greece needs to take control of their own currency, allow for it to devalue on the floating exchange rate system.It is mystery to me why Tsipras caved. With the referendum he could argue he had a popular mandate to leave the euro but he seems desperate to stay. I can only assume it is because he was convinced that leaving would be worse than more futile austerity. Quote Link to comment Share on other sites More sharing options...
TimG Posted July 14, 2015 Report Share Posted July 14, 2015 (edited) Ummm basic research is good.I am aware that some people think that governments should never be held responsible for spending more than they collect in taxes and will construct convoluted rationalizations for why it is 'all the fault of the bankers' instead of the politicians. However, such arguments don't stand up to any serious analysis. Edited July 14, 2015 by TimG Quote Link to comment Share on other sites More sharing options...
msj Posted July 14, 2015 Report Share Posted July 14, 2015 Some of us actually think governments should be held responsible when they bail out their own banks for lending bad money after good money to Greece. This is all about the foolish German and French taxpayer who doesn't want to take a haircut. Well, then don't allow your own governments to buy overpriced loans off your stupid banks in the first place and then you don't have to deal with more crony capitalism (socialize losses, privatize profits). Quote Link to comment Share on other sites More sharing options...
Michael Hardner Posted July 14, 2015 Report Share Posted July 14, 2015 It is mystery to me why Tsipras caved. With the referendum he could argue he had a popular mandate to leave the euro but he seems desperate to stay. I can only assume it is because he was convinced that leaving would be worse than more futile austerity. I looked at his background, and he's both young and hard-left. It seems that he is, ultimately, pragmatic about the options Greece has. Quote Link to comment Share on other sites More sharing options...
TimG Posted July 14, 2015 Report Share Posted July 14, 2015 (edited) Some of us actually think governments should be held responsible when they bail out their own banks for lending bad money after good money to Greece.Except it was the ECB who gave Greek bonds the official seal of approval by allowing them to be counted as part of the banks reserve. This meant defaults on these bonds would result in banks not having enough capital to operate. If the ECB had performed a proper risk assessment then it would not have allowed this and would not have created the potential for systematic default as a result of a Greek default. IOW, the bail outs where needed because of decisions made by politicians - not because of bad decisions by private sector operators. Well, then don't allow your own governments to buy overpriced loans off your stupid banks in the first place and then you don't have to deal with more crony capitalism (socialize losses, privatize profits).Again, this problem was caused by government regulations designed to manipulate the market to keep Greece in the Eurozone. If the ECB had not sanctioned Greek bonds banks likely would not have bought them in the same quantity and the Greek debt crisis would have started years earlier. The result would have been the same: French and German taxpayers would have been asked to pay for the irresponsible Greek voter. Edited July 14, 2015 by TimG Quote Link to comment Share on other sites More sharing options...
Argus Posted July 14, 2015 Report Share Posted July 14, 2015 It is mystery to me why Tsipras caved. With the referendum he could argue he had a popular mandate to leave the euro but he seems desperate to stay. I can only assume it is because he was convinced that leaving would be worse than more futile austerity. I think he had no backup. They were literally running out of money, and you don't just suddenly throw a switch and print up billions of drachmas overnight. What he might do is accept the money, go along with things, while at the same time instructing officials to prepare for the return of the drachma and start designing, printing, and building up reserves of that money. That would take some months. When they have enough, then he would have the option of telling the EU to screw off, and going it alone. Quote Link to comment Share on other sites More sharing options...
Big Guy Posted July 14, 2015 Author Report Share Posted July 14, 2015 To Michael - He may have been painted into a corner. One of the conditions of this bailout is the privatization of a number of Greek assets. They are to be done by a certain time and the money placed into a specific bank account which can be accessed only by the lenders. This amount appears to be about $60 billion. There are a number of other provisions which have timelines and checks and balances. But - this has to pass the Greek parliament - that is not yet a given. Quote Link to comment Share on other sites More sharing options...
dre Posted July 14, 2015 Report Share Posted July 14, 2015 It is mystery to me why Tsipras caved. With the referendum he could argue he had a popular mandate to leave the euro but he seems desperate to stay. I can only assume it is because he was convinced that leaving would be worse than more futile austerity. Its not a mystery to me at all. Governments are short term oriented creatures. If the government had left the Euro they would have had to deal with a couple of years of extremely tough times. A return to the drachma would see it severely devalued, and as it devalued there would likely be a run on banks. The government would have a hard time paying for its own operation, and paying its workforce. Obviously just borrowing more money is going to be the easiest and most attractive choice. Quote Link to comment Share on other sites More sharing options...
TimG Posted July 14, 2015 Report Share Posted July 14, 2015 Obviously just borrowing more money is going to be the easiest and most attractive choice.Not if it means the end of his career as a politician. Quote Link to comment Share on other sites More sharing options...
WIP Posted July 14, 2015 Report Share Posted July 14, 2015 (edited) Bankers have a lot more control over a nation than you think. You can blame the citizenry for voting in the government, but how do you explain the fact that the recently 'elected' leader end up double-crossing the Greek population into more problems? Banks and governments are corrupt and feed off each others corruption. Each time the Greeks have gone to the poles to change the government, they get shafted. So peaceful change is not happening, violent revolutions are inevitable. Name me 5 countries that are fiscally in good shape? It's probably a waste of time trying to reason with Neoconservatives and Neocapitalist deadenders...they're going to prescribe more bloodletting (a useful analogy in this instance) regardless of the harms caused to the patient! Speaking of how bankers control nations...especially central bankers...I came across an essay today by John Pilger on the situation in Greece, and the failure of Syriza to be what it presented itself as to the Greek people: For a small country such as Greece, the euro is a colonial currency: a tether to a capitalist ideology so extreme that even the Pope pronounces it "intolerable" and "the dung of the devil." The euro is to Greece what the US dollar is to remote territories in the Pacific, whose poverty and servility is guaranteed by their dependency. If John Pilger's name doesn't ring any bells, it should. About 10 years ago, he wrote a confessional biography about his lucrative career as an economist for the "strategic consulting firm" Chas. T. Main, where he was put in charge of some of the accounts loaning vast sums of money to South American dictators (with the cooperation of the CIA) Confessions Of An Economic Hitman. The key point of the story and followup writings is that nations are loaded up with debt deliberately. The over-indebted nations then become debt serfs which have to sell off public assets, including municipal services to international corporations. Mines, forests, arable lands, everything is up for sale (at low prices) as foreign experts are sent in by the US or allied powers, to manage the liquidation and introduce austerity measures on the populations. Up till now, this has been the pattern...starting first in Africa right after independence from colonial governors to Latin America and Asia, and now with Greece, Europe is devouring itself! The ravenous capitalist monster always requires more and greater profits. When their loans cannot be paid through conventional means, then people are virtually enslaved and resources confiscated to meet expected profit goals! What's different now, is that the monster has arrived at European shores, as every nation besides Germany is saddled with debtloads that they will eventually have to default on and face the same austerity and selloffs and oligarchic rule as Greece is facing right now. Since we have locked in globally to a capitalist system fueled by money creation thorough the creation of new debt; eventually the entire planet cannot be harvested for resources and real assets to pay the demands of virtual assets, and the whole psychotic system of growth-based capitalism will collapse.....hopefully before our entire planet is destroyed! Edited July 14, 2015 by WIP Quote Link to comment Share on other sites More sharing options...
GostHacked Posted July 14, 2015 Report Share Posted July 14, 2015 It is mystery to me why Tsipras caved. With the referendum he could argue he had a popular mandate to leave the euro but he seems desperate to stay. I can only assume it is because he was convinced that leaving would be worse than more futile austerity. It's not a mystery, it was the only course of action he could have taken. That is the direction the country was already heading. DOWN. Quote Link to comment Share on other sites More sharing options...
jbg Posted August 25, 2016 Report Share Posted August 25, 2016 The rescue of Greece and the immigration mess were two factors propelling Brexit. No sensible voter in a democratic country wants to subsidize this mess. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.