The cool thing about the Greek crisis is, that whatever your position is, you will find an economy professor agreeing with you.
The cool thing about the Greek crisis is, that whatever your position is, you will find an economy professor agreeing with you.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Or, put another way, it may be a more complex matter than "me good u bad"
"One day, we shall die. All the other days, we shall live."
Complexity is not the problem, quantum mechanics is also complex. Testability is the problem. As alternative outcomes of the Greek problem are untestable you may suggest anything you want.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Or how he thinks that a mid-sized european industrial nation getting back on its feet after war is even remotely the same a third world economy having run up a first world debt.Originally Posted by Aimless
Whatever you do, don't mention the war
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 inflation
Basiscally, it boils down to this for me; if the Greeks want a debt reduction, they should leave the eurozone.
Congratulations America
The whole debate over debt levels is a massive diversion. Greece's problem is its broken economic system, not its debts. The latter are a symptom of the former. Without major reforms to the economy, Greece will be back in this same situation within half a decade, even if every penny of its debt is written down. Even with absolutely no debt, is any sane financial actor going to let Greece borrow money the second it starts running another massive deficit?
What's even cooler is you get to find out which economics professors care about economics and which ones are more interested in bloviating.
Hope is the denial of reality
Can we get some actual specifics on this 'broken economic system' we keep hearing about? This is what I've got so far:
* Retirement age in the 50s (even though the average age people actually retire is supposed to be much higher?)
* No one pays any taxes
* Corruption issues
* Non-specific controls on economic activity (labour market???)
Can anyone fill on those blanks with some actual details?
The light that once I thought compassion still casting shadows in your action
The words you shared were cold transactions that bring me to curse what you've done
When you're up there absorbed in greatness with such success you've grown complacent
I hope you scorch your many faces when you fly too close to the sun
To add a few to yours:
1. Massively bloated (and underperforming) public sector, many of the workers hired as a form of political patronage.
2. Guild protections for numerous industries, making them deeply noncompetitive, inefficient, and employment-killing.
3. Numerous inefficient and loss-making state firms that no one wants to privatize.
4. Huge distortions between the public and private sectors, which pushes all the top talent to gravitate towards government employment (see point 1).
5. A welfare state that is far more generous than Greece's GDP/capita would allow, especially given the point about tax collection.
Hope is the denial of reality
A war it started and was in the wrong on. The Germans have no moral high ground there whatsoever, the Greeks forgave a lot of German debt and if it needs doing then it would be just for the Germans at least to return the favour now.
How far are you going to go back here? If anyone ever did anything wrong, they have no moral right to demand their rights today?
Hope is the denial of reality
Yeah, that's all well and good but, but this week I'm concerned about commonly received wisdom passed off as fact and also received wisdom that is fact but also kinda beside the point.
So:
What guild protections on what industries exist in Greece and how do they make them non-competitive? What are the inefficient and loss making state firms and how much do they actually cost the Greek government? How big, actually, is the gap between that taxes the Greek government should theoretically correct and what they actually collect - if, tomorrow, I hypnotised everyone in Greece so that each and every last one of them paid their taxes in full and on time would that make everything alright or would they still have big problems?
etc etc
The light that once I thought compassion still casting shadows in your action
The words you shared were cold transactions that bring me to curse what you've done
When you're up there absorbed in greatness with such success you've grown complacent
I hope you scorch your many faces when you fly too close to the sun
In general I view the modern era as postwar, but it was Hazir who set the moral rectitude of "midsized European nation getting back on its feet after war" > "third world economy running a first world debt".
Greece has its problems yes, and it probably would make sense if you're doing a debt-relief package to structure it as being conditional on reforms taking place. To hear the Germans speak of the illegality of debt write-offs when Greece wrote off German debt is hypocritical though.
I call bullshit; there was no moral undertone in pointing out that a midsized industrial state is not the same as a third-world country living on credit. The two are simply not the same. The 1953 debt write down is dragged by the hairs into the present crisis as nothing more and nothing less than a means to blackmale Germany into forking out a couple of billions more. Also, it that is the norm by which we deal with eachother in Europe the people in Brussels can close shop tomorrow, because there are a few more bills outstanding than the one Germany is supposed to pay to Greece.
As for the actual situation; seems like the Greeks will not even get negotiations on the basis of their present proposals. They are going to have to put the proposals (and more) into action and that means their parliament is going to have to pass a lot of legislation over the next few days. Also they will have to agree to a control mechanism more intrusive than that of the previous Troika. Controls on the banks may very well be in place for the next two months. Unless a graccident happens in the form of the Greek parliament not delivering.
Congratulations America
http://www.lse.ac.uk/europeanInstitu...E/GreeSE28.pdf
The honest answer is no. The paramount problem is that nobody really knows how big the problems exactly are, the next biggest problem is that the Greek government isn't really interested in the quantitative analysis and even less wants others to know.
Congratulations America
Regarding the tax problem: You're running into a variant of the Dunning-Kruger-Effect here. Just like incompetent people are too incompetent to recognize their failing, an ineffective and incompetent tax system will prove equally ineffective and incompetent to estimate what it should get as taxes.
But you can see easily that the problem actually exists and that it is both huge and rampant, merely by this simple fact: People didn't pay their taxes before the last election because they expected their tax burden to be cut by the new government. The fact that this idea even exists in the first place just shows how much of work there's still to be done.
When the stars threw down their spears
And watered heaven with their tears:
Did he smile his work to see?
Did he who made the lamb make thee?
Can't comprehend now this roller coaster week of it being leaked a deal is accepted only to be further apart than ever etc. I've always operated on a general philosophy that if trust is gone then it is time to part company. It is clear trust has been broken here.
One had to wonder why the Greek side is so dead set against the €50 bn collateral; it has precedent in the second bail out and actually privatizing to the tune of €50 bn is what they have been promising for 5 years now.
Congratulations America
Seems like the Greek parliament has to make a choice now. In Brussels they clinched a deal.
Congratulations America
Looks like total capitulation by the Greeks, turn out being bankrupt doesn't leave you much to discuss in negotiations, who would have thought it. What a group of idiots.
I have no confidence that this is the last of this matter. The can has been kicked down the road once more but why expect this to be the end of it. We'll be back.
Actually, what happened is something a lot more fundamental than kicking the can down the road. If implemented this accord puts an end to the Greek reflex of tackling the problem with fiscal consolidation only. Also, it has made clear that there is no such thing as national sovereignty in a monetary union.
Congratulations America
You have confidence that the Greeks won't backtrack in a few months time? I don't.
As for your sovereignty point, I take it then you're now saying that British Eurosceptics who were making that claim (of which I wasn't one) were correct afterall?
Last edited by RandBlade; 07-13-2015 at 12:28 PM.
I don't have any confidence, but we'll have €50 bn in collateral, whereas we didn't have any security.
I never said they were incorrect on that; I said that the biggest problem of Europe today (and then) is politicians harping on their national sovereignty. I think the Greeks should rejoice in their government being shredded.
Congratulations America
I added the following as an edit but you've already responded so edited back out and putting into into a new post to avoid confusion:
Incidentally I don't think its 100% the monetary union that's responsible. Realistically its about money - if Greeks were able to self-finance then they wouldn't be in this mess. If the Greeks didn't owe hundreds of billions to the other European states then they may be more willing to cut Greece loose. Its clear that Germany and Finland were at least willing to contemplate a Grexit - despite the fact that Grexit would have meant Greece defaulting on €68.2bn it owes to Germany and €3.7bn it owes to Finland. Finland has €3.7bn reasons not to want a Grexit. To give a counter-example the French and Germans have long wanted Ireland to raise its corporation tax rate (for purely selfish reasons) - although Ireland got into some difficulties, they were not so terminal as to need to fold on that demand. Had they got into the same trouble as Greece then that tax rate would definitely have had to go up even if it was counter-productive. Money and not just monetary union is what matters.
Now, imagine a monetary union with a federal treasury.
As for the why the hell would they want to push Greece out when it would cost them billions? The answer to that is that the billions lost are a more or less fixed number. With zero trust in the ability or desire of Greece to reform and get itself out of this mess the cost of muddling through had become totally unpredictable. You should not underestimate the psychological effect of the 'problem' balooning in the news from €1.7 bn, to €7.2bn, to €29bn to reach €80+ billion last night.
Now that the present deal contains hard demands for prior actions, Greece putting up €50 billion in collateral and stricter oversight at least hope for getting a grip on the situation is back.
This is definately not about the money.
Congratulations America
Well this can-kicking exercise is falling apart within a week. Quelle surprise.
Now the IMF are threatening to walk away unsurprisingly: http://www.bbc.co.uk/news/business-33531845
Gosh, the parties which will be involved in talks IF they will take place are making their position clear and you already start about deals falling apart ?
It must be difficult for you to keep up; the deal struck last weekend and the deal to be struck and then to remember they are not the same.
Congratulations America
Actually you need to keep up. The IMF publicly said during the the Greek referendum that a major restructuring of debt or relief would be needed. Today's story shows they privately wrote to the EZ creditors during the negotiations and made it clear they would only support a new arrangement under those circumstances. The Germans and Finns etc wouldn't accept a restructure or relief so signed a deal without it signing up IMF billions in the process without bothering to sign the IMF into the deal. Now the IMF are saying publicly what they've already said privately.
If you're going to make a deal involving the IMF maybe it would be a good idea to check the IMF are OK with what you're negotiating. Especially when they've already expressed strong reservations
Given that so far nothing more has happened than that the impediments for starting to talk have been named I find it very funny that you think there already is a new deal being discussed.Actually you need to keep up. The IMF publicly said during the the Greek referendum that a major restructuring of debt or relief would be needed. Today's story shows they privately wrote to the EZ creditors during the negotiations and made it clear they would only support a new arrangement under those circumstances. The Germans and Finns etc wouldn't accept a restructure or relief so signed a deal without it signing up IMF billions in the process without bothering to sign the IMF into the deal. Now the IMF are saying publicly what they've already said privately.
If you're going to make a deal involving the IMF maybe it would be a good idea to check the IMF are OK with what you're negotiating. Especially when they've already expressed strong reservations
Congratulations America
My impression is that Greece operates like a third world agrarian economy, where most transactions operate on a cash or barter (bribe) system. I don't know if that means Greeks distrust government in general, or their current government, but it's a problem when taxes owed aren't collected.
If Greece modernized their economy on par with other European nations, maybe the cash/bribe system wouldn't continue to be seen as a "profitable" option?
That's pretty close to a tautology what you wrote there. Of course the corruption and tax evasion would have to get down on "normal" level if Greece want's to get on par with other European nations. But so far I don't see the will to change. They want to get washed but they don't want to get wet.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
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