Time to burn Greece?

Scofflaw

ART6 wrote: »

Not a lot different to Ireland then?

Not dissimilar. The troika provide the money, and in return they get to set targets - but how those targets are reached is up to the government of the country, because that's who the people elected to make those decisions.

An unfashionable viewpoint, I gather, but that's the reality. That's why we're being treated to some fairly nonsensical privatisation moves here, along with the CPA - there's very little political will on the part of the government to go head to head with the unions, and the troika can't make them do it. For all the wailing, this isn't a foreign occupation, but a process which has to respect the democracies it's working with, and who are free to say no as soon as they feel they can do without the loan facility.

cordially,
Scofflaw

K-9

Scofflaw wrote: »

Not dissimilar. The troika provide the money, and in return they get to set targets - but how those targets are reached is up to the government of the country, because that's who the people elected to make those decisions.

An unfashionable viewpoint, I gather, but that's the reality. That's why we're being treated to some fairly nonsensical privatisation moves here, along with the CPA - there's very little political will on the part of the government to go head to head with the unions, and the troika can't make them do it. For all the wailing, this isn't a foreign occupation, but a process which has to respect the democracies it's working with, and who are free to say no as soon as they feel they can do without the loan facility.

cordially,
Scofflaw

Indeed, plenty of posts saying the IMF will sort out the Unions etc. 3/4 years ago and still plenty now saying the exact same thing. Croke Park as an example, will only be scrapped if there aren't many more options.

Then you have the posts blaming the IMF for policy decisions of our Government, property tax a good example. Nope, the Government could reduce tax credits and probably save far more, but it seems they see that as a no, no.

Sand

Scofflaw wrote: »

It's not a case of "someone suffers for it" - it's that if the Greek system isn't working, and it isn't, then it needs to be changed. If it can be done without anyone suffering, that's great, but if it can't, it's up to the Greeks to decide how to spread the burden. If it's being spread badly because Greek politicians don't want to challenge the unions, what can be done by anyone else?

cordially,
Scofflaw

Isnt that then a criticism of the EU/ECB plan? They extended and pretended, lacked any real ability to conceive or impose actual solutions, and the reality in 2012 is the same as it was in 2010, except the scale and impact of a Greek default is going to be even greater as its going to hit the ECB.

The EU/ECBs funding actually hinders reform because it pushes out the date when the Greek insiders need to face up to reality.

Stheno

Sand wrote: »

Isnt that then a criticism of the EU/ECB plan? They extended and pretended, lacked any real ability to conceive or impose actual solutions, and the reality in 2012 is the same as it was in 2010, except the scale and impact of a Greek default is going to be even greater as its going to hit the ECB.

The EU/ECBs funding actually hinders reform because it pushes out the date when the Greek insiders need to face up to reality.

But isn't a key difference between ourselves and the Greece that we are meeting the targets they set?

McDave

packiec50 wrote: »

I watched the video also, I presume it was trying to tug the heartstrings but for me it worked.

Greece is in Debt, but, parents bringing their children to Orphanages? pensions of 345 euros p/m while paying rent of 250 euros p/m?

I don't have a solution either, but is the solution to say Greece you owe us X, you will pay it, here's a loan to help you pay it, but we will only give it to you if you make sure somone suffers for it.

It's awful. But it's effectively their problem. Their wealthy have drained money abroad. They don't have a functioning economy with what's left. They don't raise much taxes yet have a large civil service.

Too many of Greece's problems are of their own making, and it's not right to expect others to solve them. I really fear that the way things look right now, they're going to be cut loose.

Sponge Bob

Rojomcdojo wrote: »

Anyone who has actually read up on the Greek situation will understand, though. The problem, as I understand it, is that SOMEONE has to pay. Who that is depends on the internal politics of Greece itself. From what I have seen from their trade unions, corrupt public service practices etc, it's like Ireland's problems on megasteroids. .

We had exactly the same problems here especially when a certain Charlie Haughey was Taoiseach. It is just that we managed to sort of learn from that experience.

Greece has been generally run by only 3 or 4 political dynastic familes, each headed by a Charlie Haughey type figure, for the last 40 years.

Sand

Stheno wrote: »

But isn't a key difference between ourselves and the Greece that we are meeting the targets they set?

Theres a lot of differences between us and Greece - but in this case the main one is that the EU/ECB and ourselves can pretend and extend for longer. You have to remember that neither the EU nor Ireland want to announce that we're missing targets so its not news that they claim we are. Growth projections are being cut, unemployment is stubbornly high, and theres a dawning realisation that the savings marked up to "reforms" in the public sector exist only in the imagination of the social partners.

The ECB/EU still dont have any real solutions - instead we'll spend the next 5-6 years trying to drag out the balancing of the budget over the longest possible time period whilst building up the greatest possible debt overhang. But as it stands the maths remains the same - ECB doesnt want to run 3-4% inflation, the Germans dont want transfers. That leaves one destination. The Greeks are just ahead of the pack.

ART6

Scofflaw wrote: »

Not dissimilar. The troika provide the money, and in return they get to set targets - but how those targets are reached is up to the government of the country, because that's who the people elected to make those decisions.

An unfashionable viewpoint, I gather, but that's the reality. That's why we're being treated to some fairly nonsensical privatisation moves here, along with the CPA - there's very little political will on the part of the government to go head to head with the unions, and the troika can't make them do it. For all the wailing, this isn't a foreign occupation, but a process which has to respect the democracies it's working with, and who are free to say no as soon as they feel they can do without the loan facility.

cordially,
Scofflaw

I agree. I see this situation as rather like going to a bank for a loan when one hasn't the money to fund an essential requirement. The bank sets out the terms of the loan and how and when it should be repaid. When is is, then there is no longer any relationship with the bank.

The only question is, does the bank set terms that require one to, for example, give up smoking? No, and I don't believe that the troika did either. I suspect that the claim that they insisted on property taxes etc. is a lie told by cowards who daren't accept responsibility for their own decisions.

steve9859

McDave wrote: »

It's awful. But it's effectively their problem. Their wealthy have drained money abroad. They don't have a functioning economy with what's left. They don't raise much taxes yet have a large civil service.

Too many of Greece's problems are of their own making, and it's not right to expect others to solve them. I really fear that the way things look right now, they're going to be cut loose.

I think it is looking likely now that Greece will be cut loose, and tbh, if I were a Greek worker, I would rather take my chances with a Drachma than face the certain destruction of the country (or at least a certain demographic within the country) through a generation of austerity. The only difference is how long the pain is drawn out.

But I also think that will be the end of it, and that the rest of Europe, portugal included, will be flooded with cash to show that no-one else will go. And for sure, my next holiday will be to Greece - it will be as cheap as chips.

Damian_ir

steve9859 wrote: »

I think it is looking likely now that Greece will be cut loose, and tbh, if I were a Greek worker, I would rather take my chances with a Drachma than face the certain destruction of the country (or at least a certain demographic within the country) through a generation of austerity.

This is true. Unfortunately Mafia(aka Papademos-Papandreou-Samaras-Karatzaferis) in Athens playing the role of Realty Agents. A few people here in Greece think that the last trip of George Devastator Papandreou to Costa Rica was actually for a new home deal. Perhaps this is the place that he wants to live for the rest of his life. Back door of his home in Athens is constantly unlocked.

Scofflaw

Sand wrote: »

Isnt that then a criticism of the EU/ECB plan? They extended and pretended, lacked any real ability to conceive or impose actual solutions, and the reality in 2012 is the same as it was in 2010, except the scale and impact of a Greek default is going to be even greater as its going to hit the ECB.

The EU/ECBs funding actually hinders reform because it pushes out the date when the Greek insiders need to face up to reality.

So a doctor "hinders" reform of your heart attack inducing lifestyle by giving you treatment to stave off a heart attack?

I suppose you could say that - but I don't think many people would be that impressed with a doctor who refused someone the drugs on the basis that a coronary would make them 'face up to reality'.

Greece does need to reform, but it also needs not to implode violently while doing so. For the good of the Greek people, that is, as opposed to some purist notion that the Greeks need to reform just because they "ought" to "face up to reality".

cordially,
Scofflaw

Sponge Bob

Greece as I said is incorrigible. It is a demagoguery not a democracy.

Your analogy about coronaries is apt for Portugal perhaps.

What other long bankrupt state maintains a massive air force for 'backing' its Socialists while its massive army backs 'New Democracy' as they are called.

Scofflaw

Sponge Bob wrote: »

Greece as I said is incorrigible. It is a demagoguery not a democracy.

Your analogy about coronaries is apt for Portugal perhaps.

What other long bankrupt state maintains a massive air force for 'backing' its Socialists while its massive army backs 'New Democracy' as they are called.

I take your point, but doctors do give heart drugs to enormously fat alcoholic smokers. The argument for not doing so cannot realistically be solely that the person is "incorrigible", because they are still a person. Or, in this case, the Greeks are people, and Greece is part of Europe.

One could make the argument from scarcity that scarce drugs should not be given to an 'incorrigible' patient in preference to others who are willing to reform - or in this case that financial assistance should not be diverted to
Greece from countries that are more prepared to reform (Greece has undergone reform, but insufficient reform).

In that sense, Ireland is a "good patient" - we've given up the fags (although not apparently the alcohol) and we're shedding economic fat like a diet queen preparing for a marathon. But the question is whether Greece is taking up scarce financial resources which are urgently needed elsewhere, and given that the new Greek bailout is still only a fraction of a percent of the EU's GDP over the timescale involved, and is a loan rather than a handout, its hard to make that argument.

cordially,
Scofflaw

Sponge Bob

Again by analogy. The patient is not alone and is going to need a lot more drugs than the rest of the patients. It has a long history of self abuse and loud denial , along with bombastic binges, where Portugal has a history of mannerly decrepitude by comparison.

Portugal is around the same size. More co operative and much more manageable.

So does one prioritise where one deploys the drugs. I think one does.

swampgas

There is a lot of brinkmanship going on as well. According to an article in the IT recently, the Greeks may be hoping that fear of contagion will force the rest of the EU to go ahead with the bail out, regardless of whether Greece agrees to all the demands being made of it. This could be a very high risk strategy though:

The rhetoric from top Europeans suggests they are resigned to go all the way to bankruptcy if the wayward Greeks do not come to their senses quickly. Some people in Athens are still betting that the contagion risks are so great that their sponsors won’t pull the trapdoor.

In the eyes of many Europeans, however, this is the very mentality which led Greece to renege on many of its obligations under the first bailout. In diplomatic circles, questions abound as to whether Germany might let Greece go.

Patience ran out long ago – and many critical issues in the bailout remain to be settled. “We are not fully in control of the sequence of events,” says a well-placed euro zone official. No understatement there.

Interesting times.

Scofflaw

Sponge Bob wrote: »

Again by analogy. The patient is not alone and is going to need a lot more drugs than the rest of the patients. It has a long history of self abuse and loud denial , along with bombastic binges, where Portugal has a history of mannerly decrepitude by comparison.

Portugal is around the same size. More co operative and much more manageable.

So does one prioritise where one deploys the drugs. I think one does.

Tempting, but un-Hippocratic...

cordially,
Scofflaw

Sponge Bob

These drugs are finite Scofflaw.

The 'markets' consider the patient untreatable and the doctor will not lose face if it croaks. Self inflicted and all that.

swampgas

swampgas wrote: »

There is a lot of brinkmanship going on as well. According to an article in the IT recently, the Greeks may be hoping that fear of contagion will force the rest of the EU to go ahead with the bail out, regardless of whether Greece agrees to all the demands being made of it. This could be a very high risk strategy though:



Interesting times.

Definitely extremely risky, the big question being - what happens next? Does Greece devolve into some sort of socialist nut-case where they'll tell tales to children about how the big bad Troika attempted to enslave all Greek children for eternity :eek:

Scofflaw

Sponge Bob wrote: »

These drugs are finite Scofflaw.

Not in the quantities they're being used, really.

Sponge Bob wrote: »

The 'markets' consider the patient untreatable and the doctor will not lose face if it croaks. Self inflicted and all that.

Sure, but that doesn't change the ethical or solidarity arguments.

cordially,
Scofflaw

Dr Galen

Rojomcdojo wrote: »

Definitely extremely risky, the big question being - what happens next? Does Greece devolve into some sort of socialist nut-case where they'll tell tales to children about how the big bad Troika attempted to enslave all Greek children for eternity :eek:

I think the what happens next question is one that no-one really knows the answer to.

To use another analogy, There is a box on the table. I have no idea what is in it. Could be a fluffy bunny, could be a cup of coffee, could be a tiger, could be really evil dinosaur/transformer hybrid who likes to rip heads off.

If Greece gets cut loose, and moves to drachma Nua, I don't think we have anything other than some semi-educated guesses. A lot will depend on how cut off Greece is as well. Can anyone really see a situation whereby the Euro area and indeed the Americans stand idly by while Athens burns?

Sponge Bob

Scofflaw wrote: »

Not in the quantities they're being used, really.
Sure, but that doesn't change the ethical or solidarity arguments.

But all that is required is an end to long term self destructive tendencies requiring medication.

Bit like blood transfusions. There is no point in showing solidarity and giving blood to those who objectively need it if they are continually slashing themselves as you do. :cool:

Greek politicians are busy fighting the next election instead of saving their country. none of the main parties ....least of all both of them...will wholeheartedly admit their own part in this farce/tragedy.

McDave

steve9859 wrote: »

I think it is looking likely now that Greece will be cut loose, and tbh, if I were a Greek worker, I would rather take my chances with a Drachma than face the certain destruction of the country (or at least a certain demographic within the country) through a generation of austerity. The only difference is how long the pain is drawn out.

TBH, I think austerity for the Greeks outside the Euro will be far worse. At least within the Euro they have the prospect of constructing a proper economy. Outside the Euro, it's growing olives and mending fishing nets.

McDave

steve9859 wrote: »

And for sure, my next holiday will be to Greece - it will be as cheap as chips.

:-)

In Drachmas? I'll probably join you!!

Sand

Scofflaw wrote: »

So a doctor "hinders" reform of your heart attack inducing lifestyle by giving you treatment to stave off a heart attack?

I suppose you could say that - but I don't think many people would be that impressed with a doctor who refused someone the drugs on the basis that a coronary would make them 'face up to reality'.

Greece does need to reform, but it also needs not to implode violently while doing so. For the good of the Greek people, that is, as opposed to some purist notion that the Greeks need to reform just because they "ought" to "face up to reality".

cordially,
Scofflaw

Well - if were going to go into analogy land where everything is a a lot like something entirely different - its worth noting that doctors treating morbidly obese individuals will withhold medical treatment until there is clear evidence of a lifestyle change in the patient.

But outside analogy land, the ECB/EU plan for Greece has to be judged on its merits - theyve been intervening for the best part of two years, toppling governments, demanding budgetary changes and throwing cash around and the end result is Greece is - as always - a few weeks away from default, with no clear path out of the quagmire.

Who knows, Greece may agree some last minute deal and more than likely the ECB will blink first ( The crazed threats to suicide bomb the EU banking system are hollow - without a Euro, there is no need for the ECB). But Greece simply cannot pay off the debts its taken on.

That reality ought to have been dealt with years ago. All the intervening years have accomplished is a far more bitter and poisoned Europe and allowed private banks to escape their stupid investments so that they can make more stupid investments later.

Sponge Bob

As Expected!

http://www.bbc.co.uk/news/world-europe-16958102

Greek Prime Minister Lucas Papademos has failed to secure the support of his coalition for a raft of new austerity measures, reports say.

He was meeting officials from three parties to try to secure a deal leading to a fresh bailout package.

The main stumbling block in the crunch talks were proposed cuts to supplementary pensions, reports said.

Mr Papademos was said to be going directly to discuss the problem with EU and IMF officials.

According to Sky News there's a deal secured.

Greek politicians have reached a deal over new austerity measures, the indebted country's prime minister has announced.

The office of Greek PM Lucas Papademos said the coalition partners had come to an agreement on new cuts with its creditors to secure a vital £109bn (130bn euro) bailout.
Officials have laboured since October to secure the money, needed to make up a budget deficit shortage of about £2.5bn and avoid a possible default.
European Central Bank chief Mario Draghi confirmed the deal in a news conference at lunchtime.
He said had received a phone call from Mr Papademos just minutes earlier and "he told me that agreement has been reached and has been endorsed by major parties."
European stocks rose on the news.
A spokeswoman for the prime minister's office said the agreement among the political parties will allow alternative cuts to those rejected earlier on Thursday.
Marathon talks between the socialist, conservative and far-right party leaders backing Mr Papademos' interim government had ended with agreement on most of the measures demanded by the country's creditors - the EU, IMF and the European Central Bank - to make up the budget deficit shortage.
The politicians signed up to a 22% reduction in the miniumum wage and a total of 150,000 job cuts in the public sector, of which 15,000 will go this year.
But talks faltered over plans to slice even more from pensions, leaving a £524m (625m euro) gap in the deal, raising the prospect that pensions in Greece would have to be cut in the midst of a biting recession to make up the shortfall.

Full pensions are already in line for a 15% cut, according to reports.
The deal came ahead of a meeting in Brussels on Thursday evening of finance ministers from the 17 countries which use the euro, together with the heads of the ECB and the IMF.
The new austerity deal will come under further scrutiny at the meeting.
Some economists believe Greece is contracting at such a rate the cuts are not severe enough, and believe the ECB may have to make up the shortfall by swapping some of the Greek debt it holds for bonds issued by the temporary bailout fund, the European Financial Stability Facility.
Greece has run up total debt of about £294bn (350bn euros), roughly 160% of its gross domestic product, and the IMF has insisted that level be brought down to a maximum of 120% of GDP by 2020.

Private creditors are also negotiating a write-off of Greek debts worth at least £84bn (100bn euros), and are to meet on Thursday in Paris.
Greece is reliant on international handouts to stay solvent and it faces a £12bn (14.4bn euro) bill on March 20, when it has to pay back bondholders.
Without this second bailout, it could have forced a default, triggering a so-called credit event, which would have severe consequences for the global economy.

Will it be enough? Can Greece be saved or will this new bout of austerity lead to Athens burning?

I think it will be far easier for the leading parties to agree than it will be for the pensioner who loses yet another 15% of an already meagre pension.

Sponge Bob

This could unravel again by Monday. Lets see.

stackerman

This is not a fix, its only a bodge, and the markets will see that (but I suspect it will not be straight away). The Greek political parties, unions and the right will cause chaos over the next 6 mths (maybe sooner) and they will eventually tell the EU to stuff it.
Whats really sicking about ALL the leaders (of practically ALL the various economies across the western world) is that they are ALL making decisions based on upcoming elections, rather than whats best for it's people.

More can kicking, IMHO

ART6

Greece is by far the worst budget performer in the EU (closely followed by Italy). Its government has consistently mislead the ECB etc. since the day it joined the euro and what it is agreeing to do now will only happen if their people accept it, which they increasingly look unlikely to do. If they do accept the austerity measures, how long will they continue to do so when the measures really begin to bite and their already fragile economy collapses completely? That, surely, is what excessive austerity leads to?

What happens when unemployment reaches a level where benefits are not sustainable and when the Germans won't pay them any more, and where wage cuts have reduced domestic consumption to a point where the retail industry begins to fail (so no food in the shops and, indeed, no shops. East Germany anyone?). There is always a limit to what the masses will tolerate, and when that limit is reached their reaction is unpredictable because it is driven by emotion.

I am no economist, but the Greek situation looks to me like a "controlled" default, since they have somehow contrived a massive haircut for bond holders, and that haircut seems to be approaching a crew cut daily. Ah! but the bond holders were risk takers. "Don't invest what you can't afford to lose". No they weren't. They bought government bonds with a very low interest rate because they were supposed to be guaranteed. The same investors could put their money into a private sector project, where their rate of return would be expected to be between 25% and 30% rather than 3% to 6%, but that would not be guaranteed.

So what for Ireland? Well, our noble leader has said "Ireland pays its debts." Which, loosely translated into non-political speak, means "Our people will pay someone else's debts." We will reduce our people to penury in the faint expectation that our industry will somehow experience a resurgency and solve all of the problems that we dare not address. They will be expected to do do without any government support. In the meantime, we will get a pat on the head from the diminutive president of France, where there there is also a severe budget issue.

This is a turmoil, and I doubt if anyone knows where it's going. A new world order? Collapse of the finance industry? Return to bartering? I am an average Joe, so I have no idea. However, I do suspect that the international finance industry has become totally out of control. When that starts to really impact upon the people, then beware! There are (what) seven billion of them out there, when there are few million (at most) investors/financiers/politicians. Interesting demographic times ahead. You people in the elite financial and political circles might have some shocks coming! The people didn't create that, in Greece or anywhere else. You did!

Maura74

We are going to be fed the Olympics from now on and also the queens jubilee that should keep the public sweet for a while.:(


http://www.bbc.co.uk/news/business-16963116