Greece crisis: Europe on edge over snap election

[Herr Tubthumper]

the German (and French) banks are upto their eyeballs in Euro debt, including the original Greek debt. the bailouts have only been loans to cover repayments and interest for a short period, the debt is still largely outstanding, and the banks that hold them have massive problem if they have to write them off following a default. so, in effect, the bailout is proping up German banks. this is why its deemed just about acceptable. the big FU to the Germans is that the Greeks is saying "we want a deal on our terms, not yours, or up yours we're off", knowing full well they cant really afford to leave the Euro*, but neither can the Euro start having people leave as its the beginning of the end.

*Euro, not EU, i dont believe Syriza has ever been anti-EU.

But it stands to reason that most of the money came from France and Germany as they were the wealthiest at the time; the money had to come from somewhere. But other countries also contributed and are "being propped up as well" if this is the term you wish to use. It's not just the German banks.

 

[Herr Tubthumper]

One other good thing is that some commentators suggested that the far-right of Greece were increasing in numbers due to the EU. This election has put paid this idea as Golden Dawn's votes are down on the last election and down on the European elections.

 

[Herr Tubthumper]

That's it from me. But I think today is a good day, there will be a meeting in the middle and most of the players will get what they want, and the EU will be better and much stronger for it. A historic day.

 

[cunning fergus]

Or (and I know this is radical) they try working until they're 65.

Allowing a member to fail isn't great, but to bail them out indefinitely, regardless of their attitude towards making an effort themselves, would be worse. They can't send the message to all the poorer countries that they can take it easy, as they'll never have to pay. Greece have simply voted to live as nicely as they can for now, to not bother paying, and to hell with the consequences. There will be consequences. The problem with socialism is that eventually you run out of other people's money.

Under the current arrangement I think the Greeks could work till they were 650 and still not be able to repay the loans.

Don't get me wrong I understand why it would appear to be the case that the Greeks are trying to get off their debts, however they have an economy that has shrunk by nearly a third and youth unemployment of nearly 50%. These are not the attributes of a healthy economy.

The demands on Greece are unsustainable, the election of a party that previously polled less than 3% tells you all you need to know about that..........this outcome was all too predictable.

As for running out of money, that has already happened, in the next few months the ECB will start up the printing presses in its €600bn QE programme. This is one of the last throws of the dice for the EZ, which is subject to plenty of risk, the biggest of which will be political.

In short the German electorates demands for Greek re payment will need to be squared with a democratically elected Greek Government explaining why it can't pay.

Another step towards collapse, but never underestimate the durability of pro EU capitalism, and their Tory supporters.

 

[Guerrero]

Crisis?
What crisis?

 

[TomandJerry]

Germany has warned the new Greek government that it must live up to its commitments to its creditors.

German government spokesman Steffan Seibert said it was important for Greece to "take measures so that the economic recovery continues".

His comments were echoed by the head of the eurozone finance ministers' group.

The far-left Syriza party, which won Sunday's poll, wants to scrap austerity measures demanded by international lenders, and renegotiate debt payments.

However Jeroen Dijsselbloem, president of the Eurogroup, said on Monday: "There is very little support for a write-off in Europe."

Speaking after a meeting of eurozone finance ministers in Brussels, he said members should "abide by the rules and commitments".

 

[spring hall convert]

Under the current arrangement I think the Greeks could work till they were 650 and still not be able to repay the loans.

Don't get me wrong I understand why it would appear to be the case that the Greeks are trying to get off their debts, however they have an economy that has shrunk by nearly a third and youth unemployment of nearly 50%. These are not the attributes of a healthy economy.

The demands on Greece are unsustainable, the election of a party that previously polled less than 3% tells you all you need to know about that..........this outcome was all too predictable.

As for running out of money, that has already happened, in the next few months the ECB will start up the printing presses in its €600bn QE programme. This is one of the last throws of the dice for the EZ, which is subject to plenty of risk, the biggest of which will be political.

In short the German electorates demands for Greek re payment will need to be squared with a democratically elected Greek Government explaining why it can't pay.

Another step towards collapse, but never underestimate the durability of pro EU capitalism, and their Tory supporters.

There's a graph doing the rounds today (which I now can't find) which is stark in its illustration of the contraction of the Greek economy. Spain, Italy, Portugal and Ireland have had their struggles but it isn't even half as bad as what the Greeks have been through. I'm shocked they made it this far.

 

[The Spanish]

One other good thing is that some commentators suggested that the far-right of Greece were increasing in numbers due to the EU. This election has put paid this idea as Golden Dawn's votes are down on the last election and down on the European elections.

If golden dawn got a prime minister would they call themselves pm dawn? That's the question no one can yet answer for me.

 

[Triggaaar]

Under the current arrangement I think the Greeks could work till they were 650 and still not be able to repay the loans.

Don't get me wrong I understand why it would appear to be the case that the Greeks are trying to get off their debts, however they have an economy that has shrunk by nearly a third and youth unemployment of nearly 50%. These are not the attributes of a healthy economy.

So maybe they should change their economy - possibly do something, other than tourism. Introduce manufacturing with low wages.

As for running out of money, that has already happened

So what's the solution? It's not to tell them not to worry about their debts.

In short the German electorates demands for Greek re payment will need to be squared with a democratically elected Greek Government explaining why it can't pay.

Not being able to pay is ok when it looks like you're doing all you can to pay as much as you can, but when you're sticking your fingers up and telling your creditors to stick it, while you have a party, then it's a bit rich to ask for some more the next week.

 

[cunning fergus]

So maybe they should change their economy - possibly do something, other than tourism. Introduce manufacturing with low wages.

So what's the solution? It's not to tell them not to worry about their debts.

Not being able to pay is ok when it looks like you're doing all you can to pay as much as you can, but when you're sticking your fingers up and telling your creditors to stick it, while you have a party, then it's a bit rich to ask for some more the next week.

I think it's too late to do that, but even if it was possible its unlikely to make any credible difference. In short the development of a low wage economy is the last thing the Greeks need if they want to repay their debt; if they could expand their economy this way it would not generate enough income from tax or exports (I am generalising here).

I think the credible solution would be far too radical for the politicians, capitalists and electorates to stomach. Until (or unless) the EZ goes for a full debt sharing construct (as would exist in a national state with rich and poor regions) the debt stands. Until this happens the creditors of Greece, cannot afford to take another haircut and the Greeks simply can't repay the debt.

The QE programme will definitely help the other poorer EU counties, however it's a short term solution, and one that will increase inequality and depress the euro further, this will help the exporting countries and counties tourism, it won't increase the wealth of the poor.

I get your last point, I am not defending the Greeks, however the prevailing position is a consequence of muddled economic thinking connected with all countries who tied themselves up in the EZ. The Greeks are a symptom of this problem they are not the cause.

 

[Herr Tubthumper]

If golden dawn got a prime minister would they call themselves pm dawn? That's the question no one can yet answer for me.

Maybe Marine Le Pen should rename her outfit Dawn French? On second thoughts, that would not be very funny.

 

[Iggle Piggle]

I'd be more likely to go to Greece on holiday and help their economy if I didn't have to put my shit paper in the bin. Until they sort that out I'm going to Spain.

 

[sten_super]

Not being able to pay is ok when it looks like you're doing all you can to pay as much as you can, but when you're sticking your fingers up and telling your creditors to stick it, while you have a party, then it's a bit rich to ask for some more the next week.

Have you seen the news from Greece recently? Can you point out exactly where this 'party' is? I'm sure the 26% of the active population that are unemployed would like to know, including the 58% of people under 25.

I think you're being far too simplistic. There most definitely are are problems in Greece - fundamentally, no-one feels responsible for the problem, despite a history of under-reporting of income and other assorted tax evasion. There's a "my neighbour's worse than me" attitude. And it's right to say that the Greeks wanted to join the Euro to access cheap money. But there's a flip-side to that as well. The Germans wanted Greece and other weaker peripheral countries in to weight down the Eurozone, leading to an undervaluation of the currency for Germany and helping them to run a major positive trade balance. They also pressed for political, without economic, union. The Germans accuse the Greeks of being lead by history, when more-or-less this precise situation has arisen due to the irrational German fear of inflation bought on by the experiences during the days of the Weimar Republic 80+ years ago. The Germans were also at the forefront of the Eurozone banking bailouts, partly because German banks had the most to lose during the liquidity crisis. Fault lies on both sides.

As many commentators have noted in recent days, the Germans have themselves benefited from debt forgiveness in the not-too-distant past. What has being undertaken so far is in effect a form of debt forgiveness (bond lengths have been extended and interest payments cut, including interest holidays) - it just doesn't show up on the balance sheets due to the Maastricht definition of debt (which uses the 'face' value, rather than the costs of servicing). It's clear that the other EZ members hope that more of the same will appease Syriza, and give them enough wiggle room to attempt some expansionary policy, and I don't see much wrong with that - it's not as if austerity has benefited the economy is it?!

 

[Westdene Seagull]

Have you seen the news from Greece recently? Can you point out exactly where this 'party' is? I'm sure the 26% of the active population that are unemployed would like to know, including the 58% of people under 25.

I think you're being far too simplistic. There most definitely are are problems in Greece - fundamentally, no-one feels responsible for the problem, despite a history of under-reporting of income and other assorted tax evasion. There's a "my neighbour's worse than me" attitude. And it's right to say that the Greeks wanted to join the Euro to access cheap money. But there's a flip-side to that as well. The Germans wanted Greece and other weaker peripheral countries in to weight down the Eurozone, leading to an undervaluation of the currency for Germany and helping them to run a major positive trade balance. They also pressed for political, without economic, union. The Germans accuse the Greeks of being lead by history, when more-or-less this precise situation has arisen due to the irrational German fear of inflation bought on by the experiences during the days of the Weimar Republic 80+ years ago. The Germans were also at the forefront of the Eurozone banking bailouts, partly because German banks had the most to lose during the liquidity crisis. Fault lies on both sides.

As many commentators have noted in recent days, the Germans have themselves benefited from debt forgiveness in the not-too-distant past. What has being undertaken so far is in effect a form of debt forgiveness (bond lengths have been extended and interest payments cut, including interest holidays) - it just doesn't show up on the balance sheets due to the Maastricht definition of debt (which uses the 'face' value, rather than the costs of servicing). It's clear that the other EZ members hope that more of the same will appease Syriza, and give them enough wiggle room to attempt some expansionary policy, and I don't see much wrong with that - it's not as if austerity has benefited the economy is it?!

Wouldn't happen in Germany ..... ohhh

 

[Triggaaar]

Have you seen the news from Greece recently? Can you point out exactly where this 'party' is? I'm sure the 26% of the active population that are unemployed would like to know, including the 58% of people under 25.

I'm referring to their attitude towards work. Cushy public sector jobs and the second lowest retirement age in the world. I have no doubt that many young people in Greece would like things to change, but the Greeks don't seem to be prepared to get themselves out of the mess they've got themselves in.

I think you're being far too simplistic.

Yes, because we're having a short discussion about Greece on a football forum. I'm sure the subject warrants many days of debate among economic scholars.

There most definitely are are problems in Greece - fundamentally, no-one feels responsible for the problem, despite a history of under-reporting of income and other assorted tax evasion. There's a "my neighbour's worse than me" attitude. And it's right to say that the Greeks wanted to join the Euro to access cheap money. But there's a flip-side to that as well. The Germans wanted Greece and other weaker peripheral countries in to weight down the Eurozone, leading to an undervaluation of the currency for Germany and helping them to run a major positive trade balance. They also pressed for political, without economic, union.

Greece was in a mess before it joined the Euro, it was always heading for collapse. It's also not Germany's fault that Greece lied about it's figures in order to join. And Greece aren't some unsuspecting child, they are responsible for their decisions, just as we in the UK are responsible for ours. We often don't like some of the decisions made by Brussles - well it's our call whether we're are members or not, so we've got no one to blame but ourselves.

The Greeks are of course completely shafted now, but that's not because of some nasty neighbours, it's because they've chosen to ignore their debts for decades. It seems that many in the UK would like to ignore ours too.

As many commentators have noted in recent days, the Germans have themselves benefited from debt forgiveness in the not-too-distant past.

Yes indeed.

it's not as if austerity has benefited the economy is it?!

Austerity isn't about benefiting the economy, it's about managing debt. Obviously stimulating the economy is one way of tackling debt, but the Greeks aren't in a position to spend their way out of their mess.

 

[TomandJerry]

" Chancellor Angela Merkel has ruled out cancelling any of Greece's debt, saying banks and creditors have already made substantial cuts."

Interesting move, since the newly formed Greek goverment promised to slash Greece's debt by half

 

[TomandJerry]

Double post

 

[Seasidesage]

Surely we should be able to pick up some bargains in the Greek transfer market?

 

[TomandJerry]

No breakthrough at Greek bailout talks – live updates





Disappointment as Greece and its eurozone partners fail to even release a statement about its bailout programme
Eurogroup chief: No common ground
Greece: No deal agreed
Protests in Athens, and beyond


Greekexit looking more likely

 

[Nitram]

It was always going to end up with he Greeks leaving the euro, pity so much money has been wasted trying to save a lost cause. Spain next?