No, we don't need a referendum for that, Hazir.
I was just offering a counterargument to your position which seemed to imply that them democratically deciding to about "our" money doesn't have any consequences.
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No, we don't need a referendum for that, Hazir.
I was just offering a counterargument to your position which seemed to imply that them democratically deciding to about "our" money doesn't have any consequences.
Ok, that was a misunderstanding then. I sure as hell think there should be consequences, Grexit is totally acceptable as far as I am concerned.Quote:
Originally Posted by Khendraja'aro
I thought you wanted to be in a single country with Greece and that would entail fiscal transfers etc. One funny side effect of this crisis is you sound more sceptic every month.
One unified European country would be able to impose reforms on Greece.
Exactly. I have always been against a Europe of Nations, and I feel vindicated by the present situation; a more federal EU would not have had the problems we have today. We sure as hell would not have had to waste 5 years of trying to coax a member into putting its economy on a 21st century footing. Which is the actual problem we have to deal with, not the money that Greece owes us and which we'll probably never see back (sort of) anyway.Quote:
Originally Posted by Loki
If I would know that all memberstates can be forced to play by the same rules, I would not even have objections to a transfer union. I do now that obviously a country can decide to not like the rules and simply ignore them without punity.
Juncker has had a go at Germany's Schauble for "working to exclude Greece from the Eurozone". Yes, he's the problem :rolleyes: http://www.reuters.com/article/2015/...0P40EO20150707
Cameron was right about Juncker. Schauble is right about Greece.
Good on the Baltic leaders for holding Greece accountable for its idiocy when they had to take tough measures to get in and stay in the eurozone.
I watched the debate in the Dutch Parliament about Greece (today's summit) last night and I didn't get the idea that the Dutch government is very willing to continue this silly game the Greeks are playing much longer and that there is no way they are going to accept a situation in which Greece gets a reward for trying to vote away its debt. Also, no way we're going to accept a haircut.Quote:
Originally Posted by Loki
As things stand there only France and Cyprus are working to keep Greece in the monetary union.
WTF; I don't understand anything of what happened tonight. On the surface it looks like a final ultimatum (or what goes for final in the eurozone) but then we have this meeting of the EU leaders on sunday. Not a eurozone meeting but a full blown extra EU Council. Is this really the announcement of something entirely different? Is this the mother of all va banque's we're seeing arise under the surface?
Junker et al who are still trying to keep Greece in after saying last week that a Greek no = Grexit have no credibility left. These guys are just pathetic and what reason should Greek leaders have to NOT act like dicks when every time they ask for more the idiots like Juncker respond with "no, no, no, no but yes please don't leave" only to then ask for more.
"Officials would have little choice but to start printing IOUs to pay public sector wages and pensions, perhaps as early as next week."
Is this really different from printing drachmas while staying in the eurozone proposal?
There are already fiscal transfers to Greece, a lot actually. But a single country does not obligate the federal government to bail out its states, see USA / Puerto Rico.Quote:
Originally Posted by RandBlade
Two points. By comparing federal taxes collected in a state to the federal spending on that state, fiscal transfers in the US can exceed 10% of the receiving state's GDP. Excluding the stealth fiscal transfer caused by the bailout, no way Greece ever got close to that scale of fiscal transfers. The fact of the matter is that the 'federal' EU budget is way too small and wasted on way too much useless stuff (e.g. ag subsidies) to make a substantive difference in evening out the ridiculously large fiscal imbalances in the eurozone.Quote:
Originally Posted by earthJoker
Secondly, PR isn't a US state and has a unique situation - it isn't allowed to default on most of its debt, and owners of its debt get special tax privileges. This means PR debt has been made artificially cheap, something not quite as true of big indebted states like Illinois and California. The US doesn't have to bail out PR, but given the ridiculous rules imposed on PR, it's likely Congress will come up with some sort of fudge - possibly a managed restructuring of privately held PR debt. I would imagine that if IL or CA or some other place went bust, the feds would also manage something there. They're not obliged to do something, but it's also not in the US' interest to let one of its component states or territories go under. Hefty fiscal transfers help, of course - as a state starts to go under, anticyclical federal funds get ramped up, and help stave off disaster for a bit. There also isn't the option of a state or territory leaving the union.
Point being, they're not even remotely analogous.
Maybe there aren't maybe they are. In the Greek crisis the rules were made up as the crisis went and the way you describe how the US will solve the PR situation sounds awfully like the way the EZ solution for the Greeks started. The lesson I take home from Greece is that NO amount of fiscal transfers is going to save a member of the EZ from irresponsible politicians.Quote:
Originally Posted by wiggin
Oh, and FYI; there also is no option for a country to leave the EZ. A fact that the Syriza bunch has tried to use when they started blackmailing the rest of the EZ.
But Juncker, Hollande and others all said that a No vote last Sunday would mean Grexit. Now Grexit is impossible. Hard to take these people seriously.
I have pointed out before; according to the rules leaving the Union is possible, leaving the euro (EZ) is not.Quote:
Originally Posted by RandBlade
But that is not what they were saying last week.
No it's not of the same scale, I didn't claimed so either. Still it's in the billions.Quote:
Originally Posted by wiggin
I used PR as example because it is the most current example. There were many examples of states being in the same - sorry - similar situation.Quote:
Secondly, PR isn't a US state and has a unique situation - it isn't allowed to default on most of its debt, and owners of its debt get special tax privileges.
The situation is, the institutions isn't. The EU is lacking a democratically legitimated institution that could step in in such situation. A problem that the EU had from the start.Quote:
Point being, they're not even remotely analogous.
Given that nobody exactly knows what Grexit entails in practise I would not dare claim to know exactly what people who used the term Grexit meant when they used it.Quote:
Originally Posted by RandBlade
Actually, the ESM is, especially with the German Bundestag and other parliaments having to vote on programs.Quote:
Originally Posted by earthJoker
And stepping up to the challenge; remember when the US Congress needed apotential collapse of the markets to remind them of the fact that they really really really could not risk playing games with full faith and credit of the USA ?
Hollande and Juncker both said that the Greek referendum was a referendum on the Euro and that a Greek No meant Euro exit. To give him credit Juncker has already admitted that he's eating his words now - not heard any such humility from Hollande but he's a general idiot on everything so that's no change. The problem is that it shows anything Juncker says now to be just expedience and utterly meaningless, but again we knew that didn't we?Quote:
Originally Posted by Hazir
EDIT: As did the Greeks. If Grexit happens it won't be (despite your protestations) because the rest of Europe says no to Greece - it will be because it seems Tsipiras is deliberately engineering an exit while attempting to blame others. The Euro leaders said to the Greeks "you must vote Yes or you're out" and Syriza said "they don't mean it, vote No" - the Greeks believed Syriza and Juncker said "oops, oh well we didn't mean it so come up with a new deal". Can you possibly think that Juncker has done anything other than making himself and the EU look like mugs. No wonder the Spanish PM is pissed off.
What exactly makes you think that what Juncker says is particularly relevant? Juncker has no say in the final outcome anyway. It may or may not be so that Syriza is trying to do what you claim. The relevant voices are in the national capitals and more so in the national parliaments. The Bundestag has effectively a veto over any program, and there Merkel's party is annoyed that there are talks going on still after the Greek referendum.Quote:
Originally Posted by RandBlade
Initially from the proposals it seems like Greece have folded.
I've misplaced the link, but Krugman was saying that Greece is almost a victim of bad loans...
And there is a lot of that sentiment flying about on Facebook...
Greece is somewhat a victim here, though they have no-one to blame but their previous governments and the rest of the Eurozone. The bad loans were loaned out by Greek banks and backed by German and French banks. Rather than see the Greek banks go bust (and the German and French banks take a big hit) Greece essentially nationalised the losses taking the losses away from the German and French banks onto Greek taxpayers. It was a stupid move that went completely against moral hazard.
If there's no legal outline for exiting the EZ, but does that mean one can't be created? It's weird that such a grand experiment using currency and monetary policy -- as a unifying force -- didn't take into account that political differences between countries or 'national identity' could get in the way, and no contingency plan was made. :confused:
EJ (as wiggin said) there's no comparison or analogy to the US. We've always had states that manage public money poorly, or are in various stages of economic distress (or close to 'bankruptcy'), but we don't take away their access to borrowing federal dollars, or threaten to throw them out of the Union. ;)
This monetary union was always a case of placing politics over economics, the problem is that of course economics always win out at the end. That's why William Hague said seventeen years ago that in the event of a crisis like this within the Euro it would be like "a burning building with no exits". The problem is that Hague was scorned as a nut (including by me not just Hazir, my only Labour vote was in 2001 as I disliked Hague over this). Events have shown him to be right but hindsight is useless here an exit should be made - and as with politics in general if there was a will to make it, it would be.
FYI; fiscal policies are always politics. Which makes Hague's burning building a bit of a deadpan; because no matter what currency you use you're always in a building that has no real exit. Or will you claim you had an exit when your country was mis-managed by Labour?Quote:
Originally Posted by RandBlade
As for the proposal the Greeks have submitted; I think it falls short far of what is needed. What they offer at face value looks like what was asked before their referendum. HOWEVER; before the referendum the purpose of the negotiations was the extension of the OLD program with a to be specified period. What is on the table NOW is a new program with NEW money to the tune of €59bn again. So basically what we're looking at is that the Greeks are merely giving a promise they'll finally do what they already promised they would do at the start of the previous bail-out and get the new bail-out without any extra conditions.
It would be an outrage if this proposal is going to be considered sufficient basis for talks about an ESM program.
Did we have an exit from being mismanaged by Labour? Yes we had an election and were able to evict Labour. The government before the election and the new one afterwards have control over all aspects of the economy a government can influence and we have control over who the government is. That isn't true in the Eurozone anymore.
Seems like the Greeks are getting a third bailout with no extra strings attached so have achieved something major with this whole ludicrous farce. Great to see poor behaviour rewarded, that's going to end well ...
Whatever you do, don't mention the war :o
http://thewire.in/2015/07/08/thomas-...ecture-greece/
Excerpt:
Not sure how he expects Greece to pull off inflation while staying in the Eurozone but then again perhaps debt-relief was almost as important as inflationQuote:
Piketty: Germany is just such a state. But wait: history shows us two ways for an indebted state to leave delinquency. One was demonstrated by the British Empire in the 19th century after its expensive wars with Napoleon. It is the slow method that is now being recommended to Greece. The Empire repaid its debts through strict budgetary discipline. This worked, but it took an extremely long time. For over 100 years, the British gave up two to three percent of their economy to repay its debts, which was more than they spent on schools and education. That didn’t have to happen, and it shouldn’t happen today. The second method is much faster. Germany proved it in the 20th century. Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief.
ZEIT: So you’re telling us that the German Wirtschaftswunder [“economic miracle”] was based on the same kind of debt relief that we deny Greece today?
Piketty: Exactly. After the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.
ZEIT: That happened because people recognised that the high reparations demanded of Germany after World War I were one of the causes of the Second World War. People wanted to forgive Germany’s sins this time!
Piketty: Nonsense! This had nothing to do with moral clarity; it was a rational political and economic decision. They correctly recognized that, after large crises that created huge debt loads, at some point people need to look toward the future. We cannot demand that new generations must pay for decades for the mistakes of their parents. The Greeks have, without a doubt, made big mistakes. Until 2009, the government in Athens forged its books. But despite this, the younger generation of Greeks carries no more responsibility for the mistakes of its elders than the younger generation of Germans did in the 1950s and 1960s. We need to look ahead. Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance. We need to remember this.
[...]
Piketty: We need a conference on all of Europe’s debts, just like after World War II. A restructuring of all debt, not just in Greece but in several European countries, is inevitable. Just now, we’ve lost six months in the completely intransparent negotiations with Athens. The Eurogroup’s notion that Greece will reach a budgetary surplus of 4% of GDP and will pay back its debts within 30 to 40 years is still on the table. Allegedly, they will reach one percent surplus in 2015, then two percent in 2016, and three and a half percent in 2017. Completely ridiculous! This will never happen. Yet we keep postponing the necessary debate until the cows come home.
ZEIT: And what would happen after the major debt cuts?
Piketty: A new European institution would be required to determine the maximum allowable budget deficit in order to prevent the regrowth of debt. For example, this could be a commmittee in the European Parliament consisting of legislators from national parliaments. Budgetary decisions should not be off-limits to legislatures. To undermine European democracy, which is what Germany is doing today by insisting that states remain in penury under mechanisms that Berlin itself is muscling through, is a grievous mistake.