Greece's Debt Crisis

[pietillidie]

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And so the farce escalates. Syriza has now agreed to accept an EU bailout to Greece on terms significantly worse than those which the Greek people rejected (on Syriza's recommendation) in a referendum a few weeks ago. As expectation management goes, it takes some beating.

So far, so surreal. but now this has to be accepted by a Greek parliament which is in uproar over it. If it does pass the deal, then Germany and the other creditors will have to rely on a Greek government, which vehemently opposes the package, actually implementing it. No wonder they wanted a 50 billion Euro asset sequestration as collateral.

In the midst of all this, France, which has not run a balanced budget surplus since the mid 1970s, is urging solidarity ...because "not to bail out Greece would be a retreat from Europe" . One might think that retreat is a good idea when the casulaties are so high, but France's net public debt sits at 98% of GDP and their society explodes in rage against even minor reforms. They may have a vested interest in "solidarity bailouts", eventually.

The German, Dutch, Latvians, and other peoples, who were assured that the Euro would not see them on the hook for other countries' follies, are now finding out that this is in no way the case. Their attitude to European integration is slowly being poisoned.

The coyote will pedal the air beyond the cliff's edge for a few more years, but the fall must surely come as the economies and sub-cultures continue to diverge without any appetite for fiscal transfers between them. When la chute comes, it will be deafening, and the whole world will shake.

[pietillidie]

Econoracism at its most dastardly. Let's see how cowardly the Greek parliament is now. Sadly, we already know how cowardly Merkel is when push comes to shove, and how irresponsible the fanatics at the Troika are.

Well, this is why you elected Syriza, Greece: Now, put your money where your mouth is before you embolden the moral hazard of thuggery and usurpation by allowing reckless investors to use Old Racism to destroy Europe.

[stui magpie]

[thebaldfacts]

Tsipras does a Costanza😄

[GreekLunatic]

so the referndum was a waste of time. Tsipras caved in these reforms will get voted through the greek pariliament. The greek people are seething that tsipras did oppisite to what he said befor the referendum

[pietillidie]

Some insight into the origins of the fundamentalism of the European Taliban, err European Central Bank:

[pietillidie]

[HAL]

Surely something conservative about the conditions; they're reprehensibly risky and negligent.

[pietillidie]

The rule of thumb is said to be something like one good full-time job supports four other people (is that right?).

Now, can you just imagine what the stress of five years of a 25% decline in GDP, and a 25% (?) unemployment rate on young and vulnerable people alone, is doing to people's psychiatry? And then to heap more of the same on folks without an end in sight?

Is this ISIS TV?

We know from the data that such financial stress represents a major increase in physical violence, substance abuse, child physical and sexual abuse, and the development and worsening of psychiatric disorders.

Just image there are fruitcakes in the world who feel comfortable inflicting that on young people who are not even responsible for the country's debt.

Even worse, many of the same people who crashed the global economy during the GFC will be the beneficiaries, as well as many who received large windfalls from the suffering periphery being trapped in the Euro.

Highly unsavoury stuff.

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[pietillidie]

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^The "racism" chant might simplify things for you, but it's many levels of analysis below the complex strategic and systemic issues at stake. Some of those issues are :

- A currency which makes independently governed states and peoples jointly liable for each other's maladministration ;

- The delicate balance between reforming cronyism vs allowing enough consumption spending for it to grow ;

- The fact that consumption spending funded by external debt is usually not real growth at all (it's just more of how we got here)

- The debt relief that had already been provided to Greece in the form of low interest rates and ultra-long maturity terms

- The fact that if Greece exits the Euro, its chance of ever reforming its institutions to modern European standards is probably gone for generations.

- The reckless behaviour of bankers who lent the money to the Greeks on a false premise and were allowed to transfer their liabilities to the EU Central bank, because of the nexus between bank capital and economic growth.

- The serial failure of Greek governments to implement reforms agreed in bailouts in 2010 and 2012, plus the tragic misleading of the Greek people by Syriza, who called a referendum and then completely disregarded its result to get a worse deal in the subsequent negotiations.

- The power of the Euro to tear Europe apart and create real geopolitical risk in an era of revived Russian chauvinism

Much simpler to cry racism and barrack for Syriza. Team Left, oi oi oi...

Your point about the human effects of economic failure in Greece is of course true, and important. But if Germany (et al) had not already bailed out Greece in 2010 and 2012, the liquidity crisis and economic collapse would have been far, far worse than any subsequent austerity imposed. Greek banks would have closed abruptly as external liquidity dried up.

Could the conditions attached to the 2010 and 2012 bailouts been less harsh ? Probably, though that requires a judgement about how much EU taxpayers money could be (legally) invested in Greek growth being magicked out of a profoundly uncompetitive economy by a corrupt political system which had shown a disinclination to enact reforms it had previously agreed to.

Your comments completely fail to engage with the complex geopolitical and economic issues involved, and retreat to your comfort zone of "It's all racism, innit". I've been following this crisis closely since the end of 2009, when i was based in The Hague and understood it from a Dutch perspective. Read the history of this crisis closely. Few emerge with great credit, but the horns of Northern Europe's dilemma vis-a-vis Greece are undeniable, and they are largely caused by the Euro's fatal premises mixed with very poor behaviour indeed on the part of Greece's successive governments, of which Syriza is probably the worst.