Greece crisis: Europe on edge over snap election

[TomandJerry]

The Fund regrets ever rescuing Greece. Christine Lagarde likely won't let it happen again.


"the IMF ended up loaning about €30 billion to Greece. Some €23 billion is still owed, to be paid back until the end of 2030, starting with €5.5 billion due by the end of this year."

http://www.politico.eu/article/imf-greece-grexit-lagarde-dsk-sex-parties-eurozone/

 

[TomandJerry]

What is on the table in the Greek debt negotiations? (the link is helpful!)

http://www.theguardian.com/world/ng-interactive/2015/jun/24/greek-debt-crisis-negotiations-interactive

 

[Pavilionaire]

If the EU was a business then Greece would be the employee always throwing a sickie, now currently sunning themselves on a beach in Corfu popping olives with one hand, raising their middle finger with the other.

Wasn't this inevitable? 6 months ago Greece elected an anti-austerity government and now, surprise surprise, the lenders are unhappy that Greece isn't going far enough to repay its debts.

 

[TomandJerry]

3-way chicken:

Tsipras wants to avoid spending cuts - IMF wants spending cuts or debt relief - Merkel wants to avoid debt relief

 

[Buzzer]

I wouldn't say the creditors are even being "hard". They're just not stupid.

My opinion is that they're both being stupid. Greece cannot return to the bad old days of endemic corruption, tax evasion and borrowing on the never-never. In return the creditors have to realise that more of the same medicine is not going to fix Greece. Since 2010 over half of the money that Greece has borrowed has been on servicing previous debt - a ridiculous and cyclical situation that's been a tried and tested failure with African states for over 50 years.

It's clear that Greece needs to implement harsher measures than they are doing, they also need to stop playing brinkmanship with their creditors and they need to get rid of the inept, egotistical Varoufakis who is clearly out of his depth. But...those creditors knowingly let Greece join the Euro fraudulently in return for eye-wateringly large defence contracts that made at one point in the mid-noughties Greece the fourth largest buyer of conventional weapons in the world (all supplied by Germany and France). They continued to lend money to Greece knowing how perilous the situation was - they have behaved no better than Wonga did with their dodgy loans.

Greece can't afford to repay all of its debt, it will go bankrupt and people will starve if things continue. If the creditors insist on full repayment then they are being not only harsh but cruel. I've no problem with austerity per se but you can't impose austerity on a nation for the next 20 or 30 years which is what is being proposed. And even worse for Europe, the EU - the body set up to ensure that stability and democracy ruled forever in Europe could push Greece back to the days of military juntas and fascist governments. I read somewhere an article by an economist, sorry can't find it at the moment, where they argued for debt write-off and formal, ring-fenced repayment of the rest of the debt over 40 years with huge structural change in Greek government, its legislature and its tax system. This compromise is about the best of a very bad hand that I've read anywhere on the topic.

Yes, the Greeks need to put their hands up and admit wrong. It would help matters greatly if the creditors and in particular Merkel and Schäuble did likewise.

 

[Pavilionaire]

3-way chicken:

Tsipras wants to avoid spending cuts - IMF wants spending cuts or debt relief - Merkel wants to avoid debt relief

More Mexican stand-off than 3-way chicken.

 

[Buzzer]

Here's the article..or at least an abridged version. I've got to say that his critique of the IMF/German position is quite compelling and if he's right then doomed to failure for Greece and perversely that conclusion is reached from the IMF's own research. In short, over-indebted countries struggle to grow.

http://www.voxeu.org/article/programme-greece-follow-imf-s-research

 

[Rodney Thomas]

My opinion is that they're both being stupid. Greece cannot return to the bad old days of endemic corruption, tax evasion and borrowing on the never-never. In return the creditors have to realise that more of the same medicine is not going to fix Greece. Since 2010 over half of the money that Greece has borrowed has been on servicing previous debt - a ridiculous and cyclical situation that's been a tried and tested failure with African states for over 50 years.

It's clear that Greece needs to implement harsher measures than they are doing, they also need to stop playing brinkmanship with their creditors and they need to get rid of the inept, egotistical Varoufakis who is clearly out of his depth. But...those creditors knowingly let Greece join the Euro fraudulently in return for eye-wateringly large defence contracts that made at one point in the mid-noughties Greece the fourth largest buyer of conventional weapons in the world (all supplied by Germany and France). They continued to lend money to Greece knowing how perilous the situation was - they have behaved no better than Wonga did with their dodgy loans.

Greece can't afford to repay all of its debt, it will go bankrupt and people will starve if things continue. If the creditors insist on full repayment then they are being not only harsh but cruel. I've no problem with austerity per se but you can't impose austerity on a nation for the next 20 or 30 years which is what is being proposed. And even worse for Europe, the EU - the body set up to ensure that stability and democracy ruled forever in Europe could push Greece back to the days of military juntas and fascist governments. I read somewhere an article by an economist, sorry can't find it at the moment, where they argued for debt write-off and formal, ring-fenced repayment of the rest of the debt over 40 years with huge structural change in Greek government, its legislature and its tax system. This compromise is about the best of a very bad hand that I've read anywhere on the topic.

Yes, the Greeks need to put their hands up and admit wrong. It would help matters greatly if the creditors and in particular Merkel and Schäuble did likewise.

Buzzer - This a great post and I agree with it almost entirely.

To add to the point about military spending. Even when Greece required bailing out, both Germany and France put clauses in the contracts that some of the money needed to be spent buying military equipment from manufacturers based in these two countries. This led to the situation where Greece used part of its bail out money buying two submarines from the Germans and not spending it on humanitarian aid or trying to rebuild the economy.

 

[yxee]

you can't impose austerity on a nation for the next 20 or 30 years which is what is being proposed.

My response would be that the Greeks have imposed this on themselves. Nobody has a right to be bailed-out.

If their debt is written off, moral hazard will spread across international politics.

 

[TomandJerry]

"Even if a deal is reached tonight in Brussels (or on Thursday morning), Alexis Tsipras will face a real fight to get it through the Athens parliament."

Any deal agreed today will have to be supported by the members of parliament in Greece

"If Greece and the creditors agree something by tomorrow (still not a given), the immediate challenge for Tsipras will be at home, where he’ll have to get the Greek parliament to back it. Despite Syriza’s election promises, what’s on the table now means that Tsipras has more or less capitulated completely to the demands of the creditors. It’s not likely to go down well.

With a majority of only 11 MPs, Tsipras will seek approval from the 200 MPs that form the Central Committee of Syriza. According to Greek press reports, 10-40 Syriza MPs are likely to revolt. Syriza’s junior coalition partner, the Independent Greeks, have also indicated that they could withdraw from the government. Tsipras could be left having to rely on the support of the opposition New Democracy. This in turn would open up the question of a referendum or new elections. "

 

[yxee]

You do feel bad for the Greek citizens, but at the same time there are plenty of countries who contribute to the bail-out fund who are not by any means rich. Using that money to bail-out Greece will unfairly punish the prudent.

When thinking about long term sustainability, I think the simplest answer is the best. No defaults, no write-offs, make them pay. You can't vote your debts away, and anyone standing for election that says otherwise is a very dangerous person.

 

[Buzzer]

My response would be that the Greeks have imposed this on themselves. Nobody has a right to be bailed-out.

If their debt is written off, moral hazard will spread across international politics.

As I've explained, I believe that certain creditors - particularly the French and Germans - loaned money irresponsibly and arguably almost fraudulently in the form of defence contracts. The Greek debt is as follows:

Of course the IMF loans cannot be written off. It would set a very dangerous precedent for all sorts of shenanigans. However, I would look to France, Germany and the ECB writing off most if not all of the loans owing to them. There is a recent and very pertinent precedent - Germany had debt relief after the second world war far greater than that which this would give Greece. If those three did write the loans off - together with say 10 billion from other Eurozone countries then that would come to 126 billion write off - over 42% of the debt. And these proposed write-offs are all within a private club of which France, Germany and Greece are all members.

It's not fair on France, Germany and to a lesser extent the other Eurozone countries but if they want Greece to thrive, if they want fairness and democracy in Europe, if they don't want Europeans to starve, my goodness, we're in the 21st Century and we're debating as a very real and immediate threat Western Europeans starving! - then drastic action on both sides is needed.

It's worth remembering the aims of the EU:
1. the promotion of peace and the well-being of the Union´s citizens.
2. an area of freedom, security and justice without internal frontiers.
3. sustainable development based on balanced economic growth and social justice.

It's arguable that by allowing Greece to go to the wall that the main players (France and of course Germany) are acting against at least two of the aims of their beloved institution. If they truly believe in being good Europeans then now is the time to show it.

 

[Tom Hark Preston Park]

Meanwhile, out on the Greek islands, all the Greek hotel/apartment/taverna owners will continue to keep an up close and personal eye on the till before stuffing the season's takings under the mattress before shutting up shop early October and buggering off to Athens for the winter. Same as it ever was. Folks I feel sorry for are the public sector workers. They're nailed to the floor and their wages can be zapped at will by their government and there's not a damn thing they can do about it other than emigrate.

 

[TomandJerry]

The five-page counter-proposal made by Greece’s creditors has just leaked - in several places.

And it confirms that Athens has been pushed to raise more from VAT and also make sweeping changes to its pensions system, including raising the retirement age faster and eliminating benefits for the poorest pensioners.

The red crossings out show items which are being rejected by creditors, and the underlined red sections show the new proposals

http://www.skai.gr/files/1/aalex7/5pagedoc2462015.pdf

"Hopes of an early deal have been further dashed by the sight of the leaked counted-proposals from Greece’s creditors:"

"Basically the creditors have thrown out Greece’s proposals almost entirely. Back to Square 1."

"Learned what's meant with RED LINES in #Greece negotiations. IMF counterproposal. Looks like no deal tonight! #Grexit "

 

[Tom Hark Preston Park]

Hope that Greece's creditors will be happy when they've pushed Greece (back) into the arms of the colonels or into the welcoming arms of Putin. Either way it'll destabilise the whole of Europe and far beyond. On the plus side, it might just turn the big guns back on the global banks whose naked greed are the root cause of all this crap, in Greece and everywhere else. Still not too late to string these c*nts up by the ears from the nearest lamp post.

 

[beorhthelm]

It's arguable that by allowing Greece to go to the wall that the main players (France and of course Germany) are acting against at least two of the aims of their beloved institution. If they truly believe in being good Europeans then now is the time to show it.

that garphic misrepresents the debt, implying its all owed to countries, governments, with a tiny amount owned to foreign banks. i think this shows the story with more clarity.

the problem is those bond holders, pensions, banks etc, that will have a large hole on their balance sheets if the debt gets written off. so its not in the power of the EU members to right off the debt.

secondly even if they wrote off the direct government loans, then Portugal, Spain, Italy and Ireland would all ask for the same.

 

[TomandJerry]

"Unfortunately, beyond this month’s €1.6bn repayment due to the IMF, the €7.2bn currently on the line will not cover both July and August’s ECB payments. Thus unless we see an extension to the current bailout programme, we could see both sides back to the negotiation table this time next month."

Call it what you will but it's just crazy

 

[Buzzer]

With all due respect you've got a 100% failure rate on here with your predictions. The last thing Tsipras needs is your support. It's the kiss of death.

 

[beorhthelm]

Greece is playing this better than people are giving it credit for - it is a country with nothing to lose - it is already half the way there to being self-sufficient.

It is a country that is not going to accept anything other than an exceptional deal - and I predict that is exactly what it will get.

the real world is seeing this exactly the other way: they have everything to lose, they have no positive way out and are trying to convince themselves/their electorate they have achieved a good deal.

the other side has a lot at stake too of course, that's only reason why the negotiations continue.

 

[BLOCK F]

Hope that Greece's creditors will be happy when they've pushed Greece (back) into the arms of the colonels or into the welcoming arms of Putin. Either way it'll destabilise the whole of Europe and far beyond. On the plus side, it might just turn the big guns back on the global banks whose naked greed are the root cause of all this crap, in Greece and everywhere else. Still not too late to string these c*nts up by the ears from the nearest lamp post.

I think you will find that Greece has not been very good at running its economy and many Greeks have been rather reluctant to pay their taxes. Together with other dubious financial practices, that have been endemic in the country for God knows how long, this hasn't helped!