Greece Vs EU

[moses]

"The current government of Greece is the best shot any of us, including the Greeks, have at getting things resolved, simply because it has the popular support, and because it absolutely cannot be blamed for Greece’s current predicament. No-one else in Greece can ‘sell’ a solution to the public nearly as well as they can, so we must work with them at all costs.

Blaming Greece for its current predicament may be fun. It may even be just, but it’s of no use. Greece cannot pay. If Finanzen 100 in Germany is to be believed,Greece is the only country in the EU that has actually reduced its debt in absolute terms between 2011 and 2014! It has taken the medicine and has taken the pain that Europe has asked of it. Just go and visit and look around. But because the economy has been shrinking so much faster than its debt, the debt has nonetheless become even more unsustainable. This must stop, and this is the message on which a hitherto untested party spectacularly won the election.

So to everyone in the Eurozone, I say it’s time to get over it, get on with it, and work with these guys. It’s the best shot you have. If you want to resolve things, stop humiliating the very guys who are your best chance of doing it and who didn’t have their hands in the cookie-jar. Or just have the guts to pull the plug.

With the current tried and tested approach of squeezing Greece to the max, blaming Greeks, and then lending just enough money to survive another day, we’ll lose the will of electorates in and outside Greece to go on with the show. The public discourse in the Eurozone is becoming more and more poisonous. Friends who have one foot in Greece and one in Germany tell me that they can’t discuss the situation with anyone any more, as they get attacked from both sides. I ask: who is winning? The founding fathers of the EU thought the project would bring us closer together. Their principal assumption, the very founding idea, is being sorely tested."

http://karlstrobl.com/2015/05/28/varoufakis-and-game-theory/

 

[moses]

Is that really what they are a reaction to? The endemic corruption and negligence within Greece?

I think their platform was a bit more populist than that. Demonise the Germans and distance themselves from the previous Greek governments. Like I said, I like the cut of their jib but they haven't actually been vocal about whatever plans they might have to fix the Greek economy. I sense that might be because they're as baffled as the rest of us about exactly what that might entail.

That's not true though, nobody would get elected with a populist one liner. I think that's a bit of an insult to the Greeks as a whole. Syriza have vowed to combat the corruption and overhaul the tax system.

 

[moses]

"Short-term Goals

1. Restitution of the minimum wage of 75o euro in the private sector;

2. Restitution of collective agreements in the labour market;

3. Introduction of bill protecting these vulnerable parts of the population having overdue debts (i.e. mortgage loans for first home/propriety), along with the establishment of regional / peripheral resolution committees dealing with fiscal claims;

4. Reinstatement of legislation that protects employees from being subject to massive layoffs;

5. Reinstatement of the minimum pension wage of 36o euro for those not being covered by social security nets;

6. Resolution of social security burdens for the self-employed and people with disabilities;

7. Re-issuance of licensing for media corporations from zero basis to combat against corruption, bribery, nepotism and bring about financial and administrative transparency and capacity;

8. Granting of free electricity for 300,000 households that cannot afford the relevant bills.

Mid-term Goals

1. Introduction of growth clause as prerequisite for debt repayments and public debt cut on its biggest part (i.e. provision aligned with the Maastricht Treaty’s limit of 60% debt on GDP);

2. A 5 billion public-led investment program to soar and invigorate the domestic economy and create 200,000-300,000 new job positions;

3. Combat of corruption and tax evasion, while increasing taxation for highest incomes and pushing-up minimum non-taxed annual income to 12,000;

4. Re-evaluation and rationalization of property taxes to address the real capacity of tax payers.

The broader aim of the party is to re-balance wealth distribution, create conditions that will increase consumption, facilitate state’s income burdens in order to financially support the most vulnerable parts of the population, and bring liquidity in the state’s social security funds."


Dimitris Rapidis is Strategic Analyst, Founder & Director of Bridging Europe, the Athens-based think-tank on EU Affairs.

 

[Pogue Mahone]

With all due respect those policies are about as populist as they get. See how far down the list of priorities they put fixing the unpaid taxes issue? And note the way it's spun as being mainly about targetting a wealthy minority and actually reducing the tax burden on everyone else?

Those policies are an easy sell to the electorate but will do feck all to ease the many fundamental problems in the economy that have got Greece where it is today.

 

[Grinner]

You could argue that Germany is reaping what it sowed back in the 1940's. GB isn't exactly covered in glory either for it's role in facilitating the Greek Civil War. If Greece had just gone communist then it may have been easy to fix following the collapse of the USSR, like all of the other satellite nations.

 

[moses]

By the way, if anyone is interested in more stuff about the systemic flaws in Greek's economy and the Sisyphean task of fixing them, Planet Money did a bunch of really interesting podcasts on this topic over the last few years.

http://www.npr.org/sections/money/2012/01/05/144747663/how-a-computer-scientist-tried-to-save-greece

http://www.npr.org/sections/money/2...day-podcast-who-loaned-money-to-greece-anyway

This one really makes the blood boil. An honest, decent man tries to collect some accurate statistics on the reality of the Greek economy and ends up threatened with life imprisonment.

http://www.npr.org/sections/money/2...st-how-office-politics-could-take-down-europe

Recorded all the way back in 2011.

There is so much of this that is borderline tinfoil hat. I have to bite my lip a lot lest I sound (more) like a raving nutter. But at least I have a replacement for Football Weekly!

 

[Pogue Mahone]

There is so much of this that is borderline tinfoil hat. I have to bite my lip a lot lest I sound (more) like a raving nutter. But at least I have a replacement for Football Weekly!

It's a decent poscast in general. Makes economics much easier to grasp for simple souls like me.

 

[moses]

With all due respect those policies are about as populist as they get. See how far down the list of priorities they put fixing the unpaid taxes issue? And note the way it's spun as being mainly about yargetting a wealthy minority and actually reducing the tax burden on everyone else? Those policies are an easy sell to the electorate but will do feck all to ease the fundamental problem of institutionalised income tax evasion.

They didn't write that list, a journo did. They are as a party populated by communists, with a smattering of anarchists, they have a very definite plan to halt Greece's previous corrupt regimes. They are slightly preoccupied just now with austerity, but for all the criticisms they are open to, I don't think you can doubt they were major critics of previous Greek government policies.

 

[moses]

You could argue that Germany is reaping what it sowed back in the 1940's. GB isn't exactly covered in glory either for it's role in facilitating the Greek Civil War. If Greece had just gone communist then it may have been easy to fix following the collapse of the USSR, like all of the other satellite nations.

Communism in Greece is reality, which is why it's unfair to say Syriza are just a reaction to austerity.

 

[VidaRed]

Hopefully greece breaks away from the EU and puts an end to this clusterfeck.

 

[Pogue Mahone]

They didn't write that list, a journo did. They are as a party populated by communists, with a smattering of anarchists, they have a very definite plan to halt Greece's previous corrupt regimes. They are slightly preoccupied just now with austerity, but for all the criticisms they are open to, I don't think you can doubt they were major critics of pervious Greek government policies.

Aye, fair enough. I just get the impression that the hole they're in is about much more than recent government policies. It's actually cultural and Syriza don't seem to know how to fix it. Not that I've seen anyway. It's very easy to get into power on the basis of how pissed off people were at whoever was in charge when the global economy went tits up. That's how the tories got an iron grip in the UK.

 

[moses]

Slightly related CNBC discuss Greece and seem bemused there are still communists in the world

http://newsbusters.org/blogs/joseph-rossell/2015/06/30/cnbc-baffled-communist-logic-greece

 

[moses]

Aye, fair enough. I just get the impression that the hole they're in is about much more than recent government policies. It's actually cultural and Syriza don't seem to know how to fix it. Not that I've seen anyway. It's very easy to get into power on the basis of how pissed off people were at whoever was in charge when the global economy went tits up. That's how the tories got an iron grip in the UK.

It may be cultural, at no point since Aristotle has Greece been a paragon of anything of note. That said I think they have a fair idea of how to try and fix it but that's not enough, you need a mandate, so the referendum will be telling. I think people in Greece also realise that there is the need for massive structural reform and usually the hardships that come with that are enough to halt the process in favour of a better the devil you know, but in this case the devil is seen as the Germans!!!!! so the idea of a self determined struggle is an easier sell than usual. Initially anyway.

 

[Grinner]

Slightly related CNBC discuss Greece and seem bemused there are still communists in the world

http://newsbusters.org/blogs/joseph-rossell/2015/06/30/cnbc-baffled-communist-logic-greece

Odd considering we supposedly have one in the White House.

 

[moses]

Odd considering we supposedly have one in the White House.

Are they still getting black folk and subversives mixed up over there?

 

[Stanley Road]

EU have a very strong hand, they moaned about the referendum and were all nice, now that it's not clear cut how it will go, it seems like the EU are waiting for a more friendly government to deal with were they will table severe plans and the govt will accept. Then in a couple of years we can all visit this thread again.

 

[Grinner]

They were complaining that the Supreme Court was making law the other day. Imagine that, judges deciding the law. The crypto-fascist, markist-leninest, Saul Alinskyite in the White House is riling up the usual crowd.

 

[711]

https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

This is interesting, just looking at taxation.
The UK is above the EU average, but less than France, Italy and Germany. Not as grossly over-taxed as some would make out, anyway.
As for Greece, the tax take there is 5% below the EU average, so maybe the lender's demands aren't too unreasonable, and the Greek government could levy some more.
Ireland's percentage tax take is nearly identical to Greece incidentally, so stop whinging Irish people and pay up with a smile.

 

[Pogue Mahone]

Presumably that's a hotch potch of everything from income tax, to corporation tax to VAT. So comparisons on the tax burden borne by individuals from the different countries won't work very well.

From an Irish perspective, the biggest dent in the wages of PAYE workers thanks to the troika is a hike in PRSI and introduction of a USC, neither of which will have been included in the figures in that table.

 

[Jippy]

EU have a very strong hand, they moaned about the referendum and were all nice, now that it's not clear cut how it will go, it seems like the EU are waiting for a more friendly government to deal with were they will table severe plans and the govt will accept. Then in a couple of years we can all visit this thread again.

The referendum is bonkers. They are asking people to vote on a complex and multi-faceted set of proposals, the details of which they aren't privy to, based on a 68-word question.

 

[711]

That's a good point about corporation tax. I think VAT gets passed from company to company, but most eventually lands on the consumer, but I could be wrong. The rest can be called income tax, council tax, national insurance, property tax, employment tax, excise (a big one) or whatever, but it still falls on the individual in the end, so I wouldn't have thought it would make that much difference.

Actually looking at this:
https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP
Greece's corporation tax is quite high, although Ireland's isn't.

 

[itso 7]

Found this interesting:
http://www.theguardian.com/commentisfree/2015/jul/01/syriza-cave-in-elites-regime-change

 

[moses]

The referendum is bonkers. They are asking people to vote on a complex and multi-faceted set of proposals, the details of which they aren't privy to, based on a 68-word question.

That's voting for you, especially in referenda.

Yanis simplirfies it here

http://yanisvaroufakis.eu/2015/07/0...o-in-the-referendum-in-6-short-bullet-points/

 

[moses]

That's a good point about corporation tax. I think VAT gets passed from company to company, but most eventually lands on the consumer, but I could be wrong. The rest can be called income tax, council tax, national insurance, property tax, employment tax, excise (a big one) or whatever, but it still falls on the individual in the end, so I wouldn't have thought it would make that much difference.

Actually looking at this:
https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP
Greece's corporation tax is quite high, although Ireland's isn't.

We lube up for corporations, and banks, and the EU. We're tarts, of that there is no doubt.

 

[moses]

Found this interesting:
http://www.theguardian.com/commentisfree/2015/jul/01/syriza-cave-in-elites-regime-change

Yep, that's why good lapdogs like us get our bellies tickled. God forbid our governement would stand by Greece, or their own people. We have been the most outspoken against Greece, it's shocking.

 

[Chorley1974]

"The current government of Greece is the best shot any of us, including the Greeks, have at getting things resolved, simply because it has the popular support, and because it absolutely cannot be blamed for Greece’s current predicament. No-one else in Greece can ‘sell’ a solution to the public nearly as well as they can, so we must work with them at all costs.

Blaming Greece for its current predicament may be fun. It may even be just, but it’s of no use. Greece cannot pay. If Finanzen 100 in Germany is to be believed,Greece is the only country in the EU that has actually reduced its debt in absolute terms between 2011 and 2014! It has taken the medicine and has taken the pain that Europe has asked of it. Just go and visit and look around. But because the economy has been shrinking so much faster than its debt, the debt has nonetheless become even more unsustainable. This must stop, and this is the message on which a hitherto untested party spectacularly won the election.

So to everyone in the Eurozone, I say it’s time to get over it, get on with it, and work with these guys. It’s the best shot you have. If you want to resolve things, stop humiliating the very guys who are your best chance of doing it and who didn’t have their hands in the cookie-jar. Or just have the guts to pull the plug.

With the current tried and tested approach of squeezing Greece to the max, blaming Greeks, and then lending just enough money to survive another day, we’ll lose the will of electorates in and outside Greece to go on with the show. The public discourse in the Eurozone is becoming more and more poisonous. Friends who have one foot in Greece and one in Germany tell me that they can’t discuss the situation with anyone any more, as they get attacked from both sides. I ask: who is winning? The founding fathers of the EU thought the project would bring us closer together. Their principal assumption, the very founding idea, is being sorely tested."

http://karlstrobl.com/2015/05/28/varoufakis-and-game-theory/

The problem is the other bailout countries, such as Ireland who took their medicine, don't get the same, it's not equitable on them to allow a different set of rules for Greece. The bottom line is that Greece need to make some major structural reforms, without that a new bailout will just end in another default, something has to give.

 

[moses]

The problem is the other bailout countries, such as Ireland who took their medicine, don't get the same, it's not equitable on them to allow a different set of rules for Greece. The bottom line is that Greece need to make some major structural reforms, without that a new bailout will just end in another default, something has to give.

That's the reality, but translates as well if we treat one lot unfairly then we have to treat everyone unfairly. Greece will have to make reforms, but that is neither here nor there.

 

[Pogue Mahone]

That's voting for you, especially in referenda.

Yanis simplirfies it here

http://yanisvaroufakis.eu/2015/07/0...o-in-the-referendum-in-6-short-bullet-points/

Emotive stuff but most definitely not a summary of what is being voted on. That's my beef with the likes of Syriza and the sinners. Lots of tub-thumping but very little detail. They appeal to emotions, not intellect.

The Greek lads do at least give the impression of being smart cookies, even if they lack plausible solutions right now. So if I was Greek I could probably convince myself to go along with them out of blind faith.

 

[moses]

Emotive stuff but most definitely not a summary of what is being voted on. That's my major beef with the likes of Syriza and the sinners. Long on emotion, short on details and any kind of plausible long term policies. The Greek lads do at least give the impression of being smart cookies, so if I was Greek I could probably convince myself to go along with them out of blind faith.

Christ Pogue, the man communcates at length, more than any of our elected reps, he has a feckin blog ... yuk ... but that is just his take on what a NO vote will do for his party. It's a personal note on why the Finance Minister of the country a NO vote. What do you want from him?

 

[Pogue Mahone]

Christ Pogue, the man communcates at length, more than any of our elected reps, he has a feckin blog ... yuk ... but that is just his take on what a NO vote will do for his party. It's a personal note on why the Finance Minister of the country a NO vote. What do you want from him?

If I was Greek? More than those six fecking bullet points! If that's in his blog, great. I haven't read it. I saw him give a press conference earlier and he seemed like a very smart, thoughtful bloke. I guess I should assume his press office are responsible for the dumbing down of those key points.

 

[Pogue Mahone]

Actually, he's got some very concrete solutions. I'm doing the bloke a disservice.

http://yanisvaroufakis.eu/euro-cris...he-modest-proposal-four-crises-four-policies/

I've no idea how plausible this is as I'm getting out of my depth on all the macroeconomics stuff. But yeah, my last post was unfair.

 

[Brophs]

Yep, that's why good lapdogs like us get our bellies tickled. God forbid our governement would stand by Greece, or their own people. We have been the most outspoken against Greece, it's shocking.

Yeah. I'm distinctly uncomfortable with some of their behaviour, the vague nature of what comes next and their overall attitude but, when all's said and done, I'm more morally uncomfortable with the idea of not supporting these people who so desperately need it. Even if you ignore the support we've had in the past, as long as we're part of a collective I feel like we have show compassion and behave as such.

 

[moses]

If I was Greek? More than those six fecking bullet points! If that's in his blog, great. I haven't read it. I saw him give a press conference earlier and he seemed like a very smart, thoughtful bloke. I guess I should assume his press office are responsible for the dumbing down of those key points.

No, let's compare him to any other finance minister in Europe in a similar position, most hide behind long winded and vague party lines, running the opposite direction when time comes to nailing a flag to a mast a speaking in clear terms. This is a bloke who writes and publishes essays. A finance minister who ran an econmics department in a University, he is the closest thing we have to a technocrat, and one who speaks in laymans terms. I think that's as good as it gets. We get pages of unitelligble nonsense at referenda, I crave a minister who will spell out in simple terms why he wants the people to vote one way or another. Why have a pop at him and the Shinners? Would you prefer a career politician like Noonan? Because that's where the bar is set around here.

 

[moses]

Actually, he's got some very concrete solutions. I'm doing the bloke a disservice.

http://yanisvaroufakis.eu/euro-cris...he-modest-proposal-four-crises-four-policies/

I've no idea how plausible this is as I'm getting out of my depth on all the macroeconomics stuff. But yeah, my last post was unfair.

..... and breathe ... I thought I'd lost you there.


anyway I Yanis

 

[moses]

Yeah. I'm distinctly uncomfortable with some of their behaviour, the vague nature of what comes next and their overall attitude but, when all's said and done, I'm more morally uncomfortable with the idea of not supporting these people who so desperately need it. Even if you ignore the support we've had in the past, as long as we're part of a collective I feel like we have show compassion and behave as such.

Yep, the idea that we don't help if we can because of misdeeds by the political and business classes scares me.

 

[Pogue Mahone]

..... and breathe ... I thought I'd lost you there.

I'm back with you alright. I'm a fan of technocrats and hate the politics of bluster and hot air. Which brings me back to the sinners

Some of the independents in Ireland have impressed me but - bar one or two notable exceptions - the rest of them are all cut from the same cloth. Career politicians who tell the electorate what they want to hear, rather than what they need to hear. Does my head in and cements my apathy.

 

[moses]

I'm back with you alright. I'm a fan of technocrats and hate the politics of bluster and hot air. Which brings me back to the sinners

Some of the independents in Ireland have impressed me but - bar one or two notable exceptions - the rest of them are all cut from the same cloth. Career politicians who tell the electorate what they want to hear, rather than what they need to hear. Does my head in and cements my apathy.

It's a risky career being an indpendent TD in Ireland!

I also sometimes get confused about the Shinners being accused of being populist, their lefty bleating has been pretty consistent for about 30 years. They are a party built along marxist origins. Their social message has rarely changed, it has softened, but every lefty party in Europe has. Their website is awash with their policies, in detail, and they publish alternative budgets and are the only ones who acknowledge that fisheries is a key area of potential industrial growth. They are not shy to lay their cards on the table either, never shying from saying what they don't like, for example the two tiered educational system. All of these things are consistent with their origins and past.

 

[Jippy]

That's voting for you, especially in referenda.

Yanis simplirfies it here

http://yanisvaroufakis.eu/2015/07/0...o-in-the-referendum-in-6-short-bullet-points/

It's a load of emotive claptrap tbh.

Negotiations have stalled because Greece’s creditors (a) refused to reduce our un-payable public debt and (b) insisted that it should be repaid ‘parametrically’ by the weakest members of our society, their children and their grandchildren

This is shaped as an anti-Greek thing. It's not- who does he think is paying off the massive sovereign debt piles in the likes of the UK, US and Japan - countries with poor demographics? All debt is effectively mortgaging out future returns, he's just trying to tug the heart strings.

Deposits in Greece’s banks are safe. Creditors have chosen the strategy of blackmail based on bank closures.

The Greek authorities limited withdrawals from their banks to avert crisis, because there was going to be an obvious run on them. How is that 'creditors' blackmail'? You can equally argue that it is the last defence of the feckless debtor state.

The guy may post some good leftist soundbites, but his economics does not hold water.

 

[moses]

This is shaped as an anti-Greek thing. It's not- who does he think is paying off the massive sovereign debt piles in the likes of the UK, US and Japan - countries with poor demographics? All debt is effectively mortgaging out future returns, he's just trying to tug the heart strings.

What? He never says that, he repeats the by this stage mantra that the weak are paying for the debts of the rich, like in Ireland, the bankers still get their bonuses while health and unmarried mothers allowances are cut. The nation is on it's knees, with 60% youth unemployment, if your heart strings need any more tugging you'll never care.

There have been a few well written articles by people who understand econmics, (not me, by along stretch) who say that Syriza have no choice but to follow Yanis' economics as the EU plan is inevitable decline. So if it's claptrap it'd be great if you could debunk the Stiglitz and Krugman articles that say the opposite?

 

[Jippy]

Actually, he's got some very concrete solutions. I'm doing the bloke a disservice.

http://yanisvaroufakis.eu/euro-cris...he-modest-proposal-four-crises-four-policies/

I've no idea how plausible this is as I'm getting out of my depth on all the macroeconomics stuff. But yeah, my last post was unfair.

You were right first time, you are not doing him a disservice. His 'modest proposals' are fallacy.

The real choice is between beggar-my-neighbour deflation and an investment-led recovery combined with social stabilisation. The investment recovery will be funded by global capital, supplied principally by sovereign wealth funds and by pension funds which are seeking long-term investment outlets.

So after Greece yesterday became the first country since Mugabe's Zimbabwe to default on the IMF (and the first 'developed' country ever to do so), these canny sovereign wealth and pension funds -which are by definition cautious investors- are queueing up to fund more Greek debt? It's laughable. They have a €2bn coupon payment due on 10 July and if they miss that then it will be an actual sovereign default. Argentina has been frozen out of the debt markets for over a decade since its last default. No-one will touch it.

• By another stroke, Policy 2, the Limited Debt Conversion Programme (LDCP), the Eurozone’s mountain of debt shrinks, through an ECB-ESM conversion of Maastricht Compliant member-state Debt

This one is pushing at the boundaries of my understanding, but seems to suggest that there is a means by which all government debt can be kind of controlled by the ECB, which will cap interest rates and handle the creditors, making it manageable- basically to avoid market speculators pushing the bond yield to punitive levels I guess. If the government defaults though, it falls back on the ECB, through the ESM.

Yanis witters on about it here, but it all sounds utopian to me. Has he not noticed those hedge funds holding out to try and bleed developing countries dry of every last cent they owe?
http://yanisvaroufakis.eu/euro-cris...icy-2-limited-debt-conversion-programme-ldcp/