Lets face it, governments are weak, spineless, opportunists with zero forethought into the future. Political parties seek election at all costs and will not make the tough choices unless the people are willing to sacrifice. It's up to the people to realize that things need to change and vote for that change, othwerwise governments will continue to pass the buck or blame some minority for all the problems (rich immigrants, poor immigrants, welfare recipients, elderly, corporations, the rich, etc).
I see alot of parallels to the recent Alberta election (obviously both are completely different). The parties knew that reliance on oil revenues needs to end and paid it lip service. Every party knew taxes would need to increase, and we voted in the party that offers democratic socialism hoping for the Nordic-model, only to realize that the nordic model has everyone pitching in (high income taxes, fairly low corporate taxes) so we end up with a tax on the rich and on corporations. While they were lambasted for the comment, I think Prentice was right in saying we all needed to look into the mirror (even the PCs).
The Greeks need to do the same, look in the mirror. Yeah some political parties put you in this mess but you voted those parties in and now need to face the consequences of poor choices.
The issues with the Greece populace are extreme.
The stats are absurd. The latest stats have 24.3% of all Greek GDP being made up of under the table work, that taxes are not paid on. On top of that you have 27% of the populace employed in the public sector. So you've got a system where a huge section of the population is "self-employed" and not paying taxes and another huge section of the population that is employed by the government, who receives their money from tax revenue. Add an almost universal pension on top of that, and there simply is no way to make that work.
Instead of allowing a sensible political party come in and make the necessary difficult moves, the population votes for leftist and neo-nazi parties.
It makes my head hurt.
Edit: unemployment is also at 25%. So basically, only a small part of the populace is employed in the private sector and paying taxes.
Lets face it, governments are weak, spineless, opportunists with zero forethought into the future. Political parties seek election at all costs and will not make the tough choices unless the people are willing to sacrifice. It's up to the people to realize that things need to change and vote for that change, othwerwise governments will continue to pass the buck or blame some minority for all the problems (rich immigrants, poor immigrants, welfare recipients, elderly, corporations, the rich, etc).
I see alot of parallels to the recent Alberta election (obviously both are completely different). The parties knew that reliance on oil revenues needs to end and paid it lip service. Every party knew taxes would need to increase, and we voted in the party that offers democratic socialism hoping for the Nordic-model, only to realize that the nordic model has everyone pitching in (high income taxes, fairly low corporate taxes) so we end up with a tax on the rich and on corporations. While they were lambasted for the comment, I think Prentice was right in saying we all needed to look into the mirror (even the PCs).
The Greeks need to do the same, look in the mirror. Yeah some political parties put you in this mess but you voted those parties in and now need to face the consequences of poor choices.
There are some parallels to be sure, but have a quick browse of the article I posted in this thread. One of my pet peeves is when people here talk about entitlement and say "we're going to end up just like Greece" because it's not even close. That doesn't mean everything is perfect, but the Greeks have some significant issues to work through and it appears that they've become systematic and somewhat cultural.
We also voted for the party that wanted to raise tax and the most likely candidate to bring in PST when there were 2 big parties that said no tax increases.
I laughed at one comment where they compared different systems of government
Socialism - you have two cows. The government takes away one cow and distributes the milk to everyone else
Communism - You have two cows, the government takes both of them, gives you some milk
Facism - You have two cows, the government takes both of them and then forces you to buy the milk. When you complain they shoot you
Capitalism - You have two cows, you sell one of them and buy a bull, you breed cows, sell the herd and retire on the income
Greece - You are given two cows by France and Germany, you eat the cows. France and Germany complain when you can't deliver the milk and refuse to give you more cows. You cry to the IMF, they give you two cows. You eat the cows. The IMF gets mad when you can't deliver the milk. You hold a referendum.
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I'm going to use some quotes as starting points for correcting misunderstandings. No offense meant to anybody.
Quote:
Originally Posted by blankall
Instead of allowing a sensible political party come in and make the necessary difficult moves, the population votes for leftist and neo-nazi parties.
Greek has a multi-party system, but mostly the government has been ruled by two major centrist parties: The centrist social democrats PASOK and the conservative right wing New Democracy (ND).
While many political commentators speak as if Syriza and Golden Dawn have somehow been in power, here's the reality from June 2012 elections. (It's worth noting that there was also a 2012 May election, but no government could be formed based on those results.)
ND: 29% of the vote
Syriza: 27% of the vote
PASOK: 12%
ANEL (national-conservatives): 7.5%
Golden Dawn (neo-nazis): 7%
DIMAR (another centrist social democratic party): 6%
The 2012 government was formed by ND, PASOK and DIMAR.
In other words:
Up until January of this year, the political power in Greece has been held by the exact same parties that got them into this mess in the first place.
They also were quite ready to do "hard decisions"... up to a point. To be exact, the ND-lead government mostly went on to do exactly what the Troika (IMF, European Central Bank (ECB) and European Commission (EC)) told them to do.
What the Troika told Greece to do was strict austerity politics. Those politics turned out to be a spectacular failure. In a few years Greece has lost 25% of it's GDP, which in itself is a major reason why the Greek debt-to-GDP ratio is so incredibly bad at the moment.
It's also worth noting that the IMF has made about 2.5€ billion in profit from their Greek loans. Which of course is all money that could have been spent to actually fix the Greek economy.
A quick sidetrack on the change in Greek debt is needed here:
Spoiler!
At the start of the crisis, most of Greek debt was held by private financial institutions, or "banks" in short. At this point letting Greek fail on it's loans was a fairly popular idea around Europe, as the pain would have mostly been suffered by the people who had made the bad loans in the first place. At this point restructuring the Greek loans would mostly have been a financial issue negotiated between the Greek government and private financial institutions.
However, most of western Europe was/is controlled by right-wing parties. You can argue that perhaps their concern over the health of the private financial sector was legitimate, but in any case they did what right-wing parties always do: they bailed out the banks.
As private institutions had stopped loaning money to Greek, those governments combined to create a huge multi-country bailout plan for Greece, essentially loaning Greece European tax-payer money. (My money, for example.)
This has lead to a situation where ~80% of Greek debt is now held by other European countries or other more-or-less public institutions. In other words, European tax payers. At this point, restructuring the loans (debt relief) has gone from being a financial issue to a very political issue. Letting Greece fail now would mean the loss of taxpayer money. This is relevant when we get to what's going on with the negotiations right now.
In case you missed it, what also happened here is that the banks have already been bailed out and the taxpayers around Europe have been left with the bill.
Quote:
Originally Posted by CaptainCrunch
The Greek's elected a government because they promised to keep the spending status quo alive with no plan except "Dude, the check is totally in the mail" when dealing with their debtors.
As mentioned, the 2012 government started an extreme austerity program. Taxes were raised (mostly on the middle-class and poor), government employees were fired by the thousands and pensions were cut up to 40%.
The proverbial checks were very much not in mail anymore.
As also mentioned, this was a disaster, as predicted by many economic analysts. (Paul Krugman has written a lot on the topic.) The Greek experience has in fact been so bad, that IMF has gone on to flat out state that austerity politics are probably not something Europe should try anymore.
Quote:
Originally Posted by CaptainCrunch
Basically the head of the Euro Commission called the Greek Prime Minister a liar and a egomaniac.
Namecalling is the traditional response of people that are caught on the losing side of an argument. It's no different here.
Under Syriza the Greek government is actually turning a 2 billion surplus right now before debt payments. They don't need debt to pay for their pensions or salaries anymore.
The negotiations over the debt is really just about how much and how fast Greek needs to pay back it's debts. If this was still an actual financial negotiation, this would not be a problem. Some of the loans would be slashed and a new payment program would be put in place to enable Greece to continue down a healthier financial path and thus able to return the maximum amount of money to it's debtors.
But it's not a financial negotiation, it's all politics. There are two main parts to it.
1) Blame game
When the first bailout packages were negotiated, governments around Europe promised that they were just loans that Greece would eventually pay back. They have ever since been trying to push back the breaking point as far as they can in hopes that people would forget, giving loan after loan to Greece instead of debt relief and restructuring. The previous government in Greece was ready to play along, as they shared most of the blame.
Syriza on the other hand has no blame in this game, at least not yet, as they only came to power in January of this year. If a breaking point must come, it's better for Syriza that it happens quickly, while they can still pass the blame to their main political opponent, the previous governing party ND.
Other European governments, having to come up with an explanation to their own voters about what's happening to the taxpayer money that was lent to Greece also need a scapegoat. The scapegoat is obviously going to be the Greeks, who voted a "totally unreasonable extreme left wing" party into power.
This isn't true of course, as Syriza like most popular parties is quite moderate, and they really have been quite accommodating in the negotiations for the most part (not to mention fairly succesful in increasing government revenues). But if the option is to take the blame or to put everything on Syriza, you know how this will go.
Syriza of course wants to push the blame for any painful decisions to someone else. Which is why they like to publicly say to the Greeks they oppose any further spending cuts and tax raises, even though in actual negotiations they can be quite accommodating when the spending cuts and tax raises suit them.
Which brings us to another point on how this is so not about finances.
2) Left vs. Right political theater
Ever since WW2 (western) Europe has been for the most part governed by one of two main political affiliations: social democrats / labour, or the conservative right. Since the collapse of the soviet system, the social democrats adopted economic policies that were extremely close to those of the conservatives. (Tony Blairs New Labour being the prime example.)
So for about two decades, Europe has a had a fairly stable center-right status quo in terms of economic politics. (This has for example made the creation and continual expansion of EU possible, as governments around Europe have ultimately largely shared the same political ideologies.) The far right has been making gains here and there, but as they mostly share the same economic policies as the center-right, this has mostly affected things such as immigration policies. If there has been pressure to move, it's mostly been further to the neoliberal right.
Syriza is not part of the status quo. They represent a rising left that is a threat to the current ruling parties around Europe. (Spain just saw the conservative right get crushed in 2015 municipal elections.)
Syriza did what was considered unthinkable in a post-soviet world by making the left relevant again. What's worse they did so by openly attacking the status quo financial politics. Even "worse", they have been doing fairly well in governing Greece, for example making notable gains already in stamping down on tax evation.
The blame game and the threat the rising left poses to the status quo politicianshas turned everything about Greece into political theater. It's not about success or failure, it's about perceived success or failure of left wing politics, as represented by Syriza/Greece.
This political theater is largely played out in European media, which makes the news coverage on Greeks an absolute mess, as fact-free accusations, misrepresentations and outright lies fly from every side.
For example, the Troika would have you believe that the problem is that of Greeks refusing to bend to spending cuts and tax raises. In fact the opposite is true, they have made huge spending cuts, have already made tax raises and are willing to do more tax raises.
In the negotiating table Syriza has for example stated it wants to raise taxes on the corporations and the rich. This however is unacceptable to the right-wing European governments, who use the Troika as their mouthpiece. Not only do they not like it, if this succeeded it could create a demand for the same elsewehere. So as a part of the negotiations, the Troika has demanded that Greece does NOT raise taxes on corporations and the richs.
Yes, you read that right. Despite the fact that it would help them get their money, other European countries have actually been trying to stop Greeks from raising taxes on the Greeks, because politics.
Quote:
...if the Greeks vote in favor of basically leaving he Euro, we're going to have to define a new term around 4th world countries.
Hardly. It's not like this would be the first time a country has defaulted. In fact Paul Krugman argued that most of the damage is probably done already.
It's also worth noting that nobody really knows what's going to happen with Greece, and whether or not there's going to be a "Grexit".
If there's one thing that's certain about the Greek economic future, it's that nobody knows what will happen and what they should do. Analysts generally agree on few points:
(Here's also the TL: DR:
- It's bad
- It'll get worse before it gets better
- The negotiations are not about finances. They're about politics.
- There have been plenty of spending cuts in Greece despite the popular view
- Nobody knows whether staying in the Euro or leaving the Euro would be better for Greece.
- The Troika were wrong before and they are probably demanding stupid things now, they should stop trying to pretend to know what they're doing with Greece
- Syriza might be loudmouths, but they have an okay track record (considering the very short time they've been in power)
Last edited by Itse; 07-01-2015 at 10:30 AM.
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Btw, Tsipras (the Greek prime minister) has just conceded to almost everything the Troika demanded.
(The letter is available online, but unless you have been actually following the negotiations you won't get much out of it.)
The German financial ministers immediate response to this was that it "does not solve anything".
It's starting to look more and more like the only real goal of the negotiations anymore is bringing down Tsipras and Syriza.
Isn't Tsipras still going ahead with the referendum though? So while he is suddenly conceding, he still isn't completely. Its just ridiculous management of the scenario by the Greeks. They could've had a better deal negotiated a few months ago, and are now reduced to trying to get some kind of bailout to keep things from imploding.
You're completely right about the point in the prior post about this being a political argument though. The money isn't completely irrelevant, but the issue is whether the Greeks are going to comply with more austerity and get the bailout or default on the loan payments. The gamble on their end was that Europe and the developed Europeans would be so scared of contagion that they would cave to the Greek demands. Other countries look decent though, and contagion today isn't the same risk as it was in 2010...so the Europeans basically held their position and here we are.
Isn't Tsipras still going ahead with the referendum though?
Yeah I guess? It's hard to say what the gameplan is here, but if I was to guess...
The point of the referendum is to end the negotiations one way or the other. Either Tsipras resigns (he's said he'll do that if the vote is "yes"), which ends the negotiations for now, or the vote is "no", which lets Tsipras go back to the table with a stronger position.
I'm guessing the double move of making an offer for a deal while a referendum is on the way is to signal that "this is the finalfinal offer". Sign or walk away. After the referendum the deal will be off the table one way or the other.
That, or it's an attempt to call attention to Troika being unwilling to sign any kind of a deal. Essentially the blame game again.
There are questionmarks around this source, as I can't find this article on the Times.
However, it's under the name of a credible Times reporter and in a reputable Australian newspaper. Possibly a story that's too hot for Europe but printable in Australia? I don't know.
Pretty condemning stuff if true. Essentially says that not only is Germany negotiating in bad faith, they are also actively working to destroy a democratically elected European government.
Greece will not get a cent in new eurozone bailout loans while Alexis Tsipras and Yanis Varoufakis remain in power, because Germany will block any such deal, one of Europe’s most influential politicians has told The Times.
Quote:
Under the rules of the European Stability Mechanism, the euro’s bailout fund, the German parliament, or Bundestag, has a veto or blocking vote over any new program such as that requested by Greece at the 11th hour.
The senior German conservative said that Angela Merkel’s ruling Christian Democrat Union (CDU) and its Bavarian allies the Christian Social Union (CSU) would block any request made while the pair, described as “communists”, remained in power.
Quote:
“We will do everything to get a ‘yes’. Then we will need a new government, then we have to implement measures,” he said.
The politician revealed that the socialist Martin Schulz, the president of the European parliament, was involved in secret talks, possibly including Mr Tsipras — whom he sees as a moderate — to “split the Syriza movement”.
The aim was to create a “technical government” as a precondition for a new EU bailout, incorporating moderate MPs in Syriza to avoid new elections.
None of this would be THAT surprising, nor the first time major powers try to dictate who gets to govern what smaller country.
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Question though, why wouldn't the German's take this position? Its not like they're going to get paid back for the money they'd put into any further bailouts.
I don't see why Germany would see any value in basically putting money in a hobo barrel and starting it on fire as long as the current government is in place.
The mechanisms are in place in the Euro rules with the Veto. They have the ability to turn off the taps if the bailout is overly risky which it is.
If I was generous, I would say both sides are negotiating in bad faith
BTW I couldn't read the article because it was asking me to subscribe.
__________________
My name is Ozymandias, King of Kings;
Question though, why wouldn't the German's take this position? Its not like they're going to get paid back for the money they'd put into any further bailouts.
There's a difference between not wanting to loan Greece any more money, and not doing it because they don't like Syriza as a party.
The first is a financial issue. The second is politics and blatant disregard for the democratic process of Greece. Plus it completely ignores the needs of German taxpayers.
Let's remember: the whole point of the negotiations outside of Greece should be about the debtors getting as much money back as possible. If the negotiations fail and Greek economy enters an even worse downspiral, they just start defaulting on their loans and taxpayers around Europe get nothing. If this wasn't the case nobody would care enough to negotiate with Greece.
If they are more interested in crushing a democratically elected government in Greece than protecting the financial interests of Germans, then they are not doing what they are supposed to be doing, nor what they claim to be doing.
Quote:
I don't see why Germany would see any value in basically putting money in a hobo barrel and starting it on fire as long as the current government is in place.
You have this upside down.
First of all, Germans are willing to work with ND and PASOK, the parties that created the debt crisis. They are not willing to work with Syriza that had nothing to do with it.
More importantly, the Greeks don't need more money. They need extensions on their loans and debt relief/restructuring. The Greek government would already be running a surplus if it wasn't for the debts.
If Greek economy collapses due to defaulting on loans and a banking freeze, that on the other hand will probably mean they will again be needing more money.
Quote:
If I was generous, I would say both sides are negotiating in bad faith
Care to explain why in your opinion the Greeks don't really want a deal?
Quote:
BTW I couldn't read the article because it was asking me to subscribe.
European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.
Quote:
Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.
It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.
Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.
This part is also one that is really important to understand when talking about "burning money in a barrel".
Quote:
We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.
But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable – not only austerity measures, but other regressive and punitive policies.
As for the referendum
Quote:
a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.
(Another Nobel price winner for economics Paul Krugman is also recommending that Greece should vote "no".)
Last edited by Itse; 07-02-2015 at 11:36 PM.
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“It is unacceptable that the International Monetary Fund and European policymakers have refused to work with the Greek government on a sensible plan to improve its economy and pay back its debt,”
If Syriza succeeds in rolling back the EU-mandated measures, it could encourage dissident political movements in other parts of Europe; the right-wing governments in Europe’s periphery are terrified of a Greek success at the negotiating table.
Please don't take this the wrong way, but that comment is hilarious!
Oh I'm not denying that
Still, it's actually a relevant measuring stick. (Which is one of the reasons it has it's own name, "primary budget surplus".)
Plus it's a clear sign that despite claims to the opposite the Greeks have actually done a lot to fix their own problems.
(Contrary to common view, they are also actually the hardest working people in Europe, as measured by hours of work per week per worker. The underlying economical issue is not that they're lazy, it's that they have too few people in the work force, and the productivity of the workers is low. In essence, their problems are more structural than cultural. Structural problems are tough to fix, but easier than cultural.)
The thing is things have been working in terms of austerity, and the battle has been whether they should commit to more. The Greeks don't want to, and the Europeans don't want to lend more money until they do.
I'm not saying the Greeks are lazy or anything like that, but the issues about who pays tax and how much are definitely a piece of the problem. I have heard of many loopholes and I've never even been to Greece! So it's not a question about how much work gets done or whether people are hard working, but about whether the government is collecting it's share. The only way a government can be rated for credit is on its taxation power and because the Greeks are notoriously terrible tax collectors the credit rating follows suit. It's not an attack on their character as a nation or anything like that, and it's no different than a bank not wanting to lend to people here based on these kinds of issues. It's not personal, but why would a German citizen want to send more money to Greece at this point, when clearly it's a band-aid solution and basically just kicks the can a little further down the road?
Couple that with less fear of contagion and a Greek government that has decided this is its hill to die on and you can see the issue for this referendum.
