Greece's Debt Crisis

[John Wren]

http://thereformedbroker.com/2015/06/28/some-stuff-you-should-know-about-greece-before-you-lose-your-s/

[stui magpie]

[Mugwump]

^ David, Syriza is a populist government, elected by a people maddened by austerity who want to shake their fist at someone. I presume your left-wing friends on newsfeed (whatever that is) are cheering because Syriza wear the right tribal shirt. A lot of what passes for politics is barracking by another name.

None of us are close enough to the fine details of entitlement reforms, debt servicing timing, etc … but the practical consequences of Syriza’s conduct at the moment seem to be frozen cash points, capital controls, and an air of recrimination and mistrust. What follows will almost certainly be either capitulation (via a “Yes” in the referendum) or a chaotic exit from the Euro, limited political reform, and a long investment freeze followed by ultimate re-entry to international capital markets at high rates of interest.

If I were the Left, I’d not be claiming Syriza as a poster-child.

[Tannin]

^ But, when you consider the only alternative, Syriza does seem like a breath of fresh air. My expectation is that they will fail miserably and Greece will become a very bad place indeed, but I might be wrong, and with the other mob there was zero, repeat zero chance of a decent outcome for the ordinary people of Greece. Bugger-all chance, in other words, is at least better than no chance. But it's still bugger-all.

[stui magpie]

^

They'll really need to tip the balance of trade their way, imports are close to double imports in dollar terms, and 80% of the GDP is generated by "services".

https://www.cia.gov/library/publications/the-world-factbook/geos/gr.html

With some strong and creative leadership they have a chance.

Otherwise, could be some cheap real estate for sale in Greece soon enough.

[Dave The Man]

Must be some Idiot in Government in Greece.

To let the Country come this Bad

[HAL]

I am glad to hear that you are some Idiot in Government in Greece.

[Mugwump]

[Tannin]

An interesting post, MW, thankyou. I was not looking so much at that level, however (I don't follow EU politics in anything like the depth that you do) but on the more fundamental level of "will this government at least try to look after its people, or will they simply try squeezing more blood out of the withered stone?" Yet worse levels of austerity are not the answer. To be honest, I have long since assumed that the only real question about Greek collapse is "when". I can't see Greece reforming fast enough to suit the Eurocrats, and even if it did, I can't see any prospect of getting the debt under control as the country just doesn't have enough income to pay the interest, let alone pay the capital down. So far, the EU had spent a fortune putting off the evil day, but that can't go on forever. Sooner or later, the music has to stop. (At least this is the basis of my reasoning.)

So the only question then becomes, who would I rather have running the place when the currency collapses? The right-wing austerity-mongers won't care if people starve. The left-wing idealists and zealots in power now will care. It's doubtful that they'll be able to do all that much good, but they at least mean well and might be able to do a bit less harm.

I don't say this in any partisan political way. Tactically, as someone who mostly tends to lean more easily to the left than to the right, I should be backing the right to take back power now, coz whoever is in government over the next few years is going to preside over the most almighty shambles and is going to wind up so on the nose with the electorate that they'll have no hope of retaining or regaining power for a very long time once the recovery starts. Unless, of course, Greece reverts to type and we have a military coup. I see that as a real possibility. What will the EU do then? And what will Putin have to say about it?

[Mugwump]

^ At the risk of mutual appreciation, Tannin, I liked your post above as well.

Anyway, the news flash is that Tsipras has just sent a letter to the Troika more or less capitulating to all terms (with a few very minor quibbles). The frilled lizard has dropped the fan.

The following quote from the Financial Times, however, says much about Syriza's negative impact on the whole situation :

QUOTE
But a European official cautioned “the question now is not whether Greece agrees to certain measures. It’s the political will to reach a deal among the other eurozone partners. Ad this is very difficult to predict given all the bad will.”
UNQUOTE

(Edited to add the quote above)

[stui magpie]

[HAL]

Is that what you think?

[pietillidie]

Yes, it's far too easy to frame Syriza either way from a distance. No one can seem to put an accurate figure on risks whatever, so it's clearly a guessing game.

The quality of suit on the others side is also no proxy for serious information, especially given the only form guide we have is Troika policy overseeing a ridiculous 25% decline in GDP. That is stunning mismanagement in its own right already, so a reflexive reach for cliches of Leftist mismanagement lack any sense of irony whatsoever. Not to mention balancing world information such as Lula da Silva's recent successful Leftist government in Brazil.

Personally, I don't mind the use of a referendum in that case; if things truly are indiscernible, it can't be a bad thing to get people to put their money where their mouths are. In the longer game it could help focus the attention on the things which matter most to all parties concerned.

Play hard, and admit defeat if you try and fail (a message for you, too, Shorten).

[Mugwump]

[Woods Of Ypres]

the lazy Greeks only have themselves to blame, they don't pay tax, then retire at 50 and accept lifelong pensions from a Government that borrows billions it cannot afford. typical Greek mentality.

After lying to get into the EU, now they need to be bailed out.

At least the ones that migrate to Melbourne will be forced to work until they are 70 like the rest us. they will sulk about it too.