Exit Stage Left: GTFO of the Eurozone ASAP?

[warpus]

I dont really see how the EU is being overly harsh on Greece though. They drove themselves into a budgetary pit, it would be utterly irrational for other EU members to bail them out but not get concessions aimed at insuring the Greek budget is manageable to the point that they wont just be bailing them out yet again in a few years.

It appears as though Greece wasn't ready for EU membership.. or rather their economy wasn't.

Were they fasttracked in or something? Some blame does rest with the EU here.. I mean, if they really did admit a member who wasn't ready...

 

[AdamCrock]

There are still some tribes of Eskimoes and they dont care if they are under this rule or another, they just do their and be done with it .... how I envy them .

 

[Azale]

Im not sure why Greece blames the EU for their troubles. Do they really think other countries will give them no strings attached bailouts?

The EU, specifically the euro, is literally the only thing preventing Greece from handling this crisis like a normal nation-state would. The EU has seen this crisis as the perfect opportunity to implement further "labor market reforms" and austerity which has been counter productive if anything.

When you got Olli Rehn saying that control over Greek fiscal policy will not end even when the bailouts end, dudes from risk consultancy groups calling the troika's program "state-building", and the IMF actually backing away from the whole thing you have to wonder WTH is going on.

I dont really see how the EU is being overly harsh on Greece though. They drove themselves into a budgetary pit, it would be utterly irrational for other EU members to bail them out but not get concessions aimed at insuring the Greek budget is manageable to the point that they wont just be bailing them out yet again in a few years.

Except the very reforms instituted means there will be more bailouts, as there was this year. The strategy has been counterproductive.

I would speak to the conditions that led to the Greek debt crisis but I'm not as brushed up on them as I was a few months ago. Maybe when I'm less swamped with other crap It's not a simple as "they drove themselves into a budgetary pit" and therefore deserve to have their economy and livelihoods destroyed.

Only a lazy fisherman would post stuff by people he has no idea about. The person you quoted (Varoufakis) is a known comedic-relief. I advise you to spend more time on reading about him though, you can only lose

Oh, you and your street thug buddies don't like him, how will I ever recover?

 

[Hygro]

If I were in charge of Greece I might just start printing and taxing in my own currency who cares if its in violation of my fiscal oppressors' dictations.

 

[Azale]

If I were in charge of Greece I might just start printing and taxing in my own currency who cares if its in violation of my fiscal oppressors' dictations.

The EU will take them to the European Court of Justice and fine them lolol

 

[Hygro]

The EU will take them to the European Court of Justice and fine them lolol

lol that'll teach em

 

[Commodore]

If I were in charge of Greece I might just start printing and taxing in my own currency who cares if its in violation of my fiscal oppressors' dictations.

That's assuming that the EU is actually fiscally oppressing Greece...which it is not.

 

[Hygro]

That's assuming that the EU is actually fiscally oppressing Greece...which it is not.

Imposed austerity is fiscal oppression. Poison is still poison when sweetened and drunk in a silver chalice. The only reason Greece is good for their loans might be because Europe is covering for Greece, but Europe is covering for Greece because they are asking Greece to do awful things (i.e. not engaging in massive fiscal stimulus) for the benefit of not-Greece.

 

[Commodore]

Imposed austerity is fiscal oppression. Poison is still poison when sweetened and drunk in a silver chalice. The only reason Greece is good for their loans might be because Europe is covering for Greece, but Europe is covering for Greece because they are asking Greece to do awful things (i.e. not engaging in massive fiscal stimulus) for the benefit of not-Greece.

No they are asking Greece to get its act together before the other members of the EU spend their money trying to bail them out. I don't think it is unreasonable to demand some sort of guarantee that your money isn't going to be wasted before you loan it to someone. I also don't find it unreasonable to expect Greece to eventually payback every last Euro of aid they received with interest.

Might I remind you that the Greek government asked for this aid, it is not being forced upon them. Hell, I think if Germany had its way it would cut off all aid to Greece and let them drown in the sea of fiscal irresponsibility they themselves created.

The terms attached to the aid are not fiscal oppression, those terms are there to ensure the Greek government is held accountable for every last Euro of aid they are given and they don't waste it on stupid crap (i.e. purchasing 400 M1 Abrams tanks from the US AFTER their economy collapsed with money the EU gave them to fix their economy).

 

[Azale]

That's assuming that the EU is actually fiscally oppressing Greece...which it is not.

http://www.nytimes.com/2013/11/27/b...or-next-crisis-would-split-the-bill.html?_r=0

That's a small sample, a starter dish.

No they are asking Greece to get its act together before the other members of the EU spend their money trying to bail them out. I don't think it is unreasonable to demand some sort of guarantee that your money isn't going to be wasted before you loan it to someone. I also don't find it unreasonable to expect Greece to eventually payback every last Euro of aid they received with interest.

The money has already been wasted. There has been no Greek recovery and won't be one in any recognizable form for a while yet.

It is fairly unreasonable as Greece remains mired in debt and (additional) millions will be thrown in poverty because of the flagrant spending habits of centrist & rightwing parties who couldn't be arsed to pare down the clientelistic state apparatus, which they constructed on-top of a functioning welfare state after the fall of the dictatorship.

In addition, the big cats in the EU knew exactly what kind of financial structure they were constructing in the European periphery before the crisis. The periphery takes on massive debt, they can provide extra demand for German exports, extra important since the German economic structure suppresses demand in order to make itself more export competitive. And t's not like German banks, for instance, where any less profligate. This is not a special Greek phenomenon, but we're supposed to believe that they're so evil that the EU is completely justified in squeezing every last ounce from the Greek people.

Inspect the situation closely before you align yourself with the EU ruling class, they're innately undemocratic political actors who have seized on this crisis situation with gusto.

Might I remind you that the Greek government asked for this aid, it is not being forced upon them. Hell, I think if Germany had its way it would cut off all aid to Greece and let them drown in the sea of fiscal irresponsibility they themselves created.

There you go with the Brussels talk again. Do you also blame the financial crisis on poor people not paying their subprime mortgages?

The terms attached to the aid are not fiscal oppression, those terms are there to ensure the Greek government is held accountable for every last Euro of aid they are given and they don't waste it on stupid crap (i.e. purchasing 400 M1 Abrams tanks from the US AFTER their economy collapsed with money the EU gave them to fix their economy).

http://www.reuters.com/article/2010/03/23/us-eurozone-greece-warships-analysis-idUSTRE62M1Q520100323
http://www.theguardian.com/world/2012/apr/19/greece-military-spending-debt-crisis

That's from a quick google search. Don't defend the ruling Greek political class, but don't defend the EU either or you quickly end up with egg on your face.

Since the only group I care about in this mess are the Greek people (except for Kyriakos and his fascist funtimes gang), it is interesting to think about whether it might cause less damage in the long run just to leave and bring back the drachma. The arguments against exit were that it would prolong the crisis and bring misery on Greece, but hey, that's happened and is happening already, and public statements from EU officials, economists, etc confirm that it's part incompetence from Brussels (austerity lol) and part actual strategy. So why not leave? Literally, what is there to lose at this point?

 

[hobbsyoyo]

It appears as though Greece wasn't ready for EU membership.. or rather their economy wasn't.

Were they fasttracked in or something? Some blame does rest with the EU here.. I mean, if they really did admit a member who wasn't ready...

Greek politicians essentially cooked their financial books to get in and to maintain good standing with everyone involved once they were in.

Imposed austerity is fiscal oppression. Poison is still poison when sweetened and drunk in a silver chalice. The only reason Greece is good for their loans might be because Europe is covering for Greece, but Europe is covering for Greece because they are asking Greece to do awful things (i.e. not engaging in massive fiscal stimulus) for the benefit of not-Greece.

I'd agree with this if Greece were not so broke that it cannot do massive fiscal stimulus. There's simply no money to do it and not enough ability to bring in creditors to finance it. The level of debt is already extreme, such that it will be long time before they can think about fiscal stimulus.

The EU could provide massive fiscal stimulus to Greece to help them through, however. I guess they think they are doing that in a roundabout way with the bailouts, but all it's done is add more debt that Greece can't pay back.

 

[metatron]

I would speak to the conditions that led to the Greek debt crisis but I'm not as brushed up on them as I was a few months ago. Maybe when I'm less swamped with other crap It's not a simple as "they drove themselves into a budgetary pit" and therefore deserve to have their economy and livelihoods destroyed.

Oh, please, do enlighten us. We have debated this in only 27 previous threads that were either RD or in the Chamber.

German exports, extra important

German trade with Greece?
Exports roughly 6 bn. Imports 1.5
Extra important!

Oh, the mere idea that they may stop buying makes me tremble in fear!
On the other hand: That trade surplus with China has evaporated. Give us a year or two and we'll trow some fit about it and there'll be more "wage depression", or as we call it: "taxes".

"Taxes" are a really fun thing by the way.
Like every year they pass, yes - actually "pass", hilarious isn't it - this thing they call a "budget".
Partly because, well, if they don't the government collapses due to certain automatisms, but that's really a minor factor. Mostly they do it, because they have all that money from the depressed wages and people ***** and complain about all sorts of things all the time, so they may as well spend it on that. You know, like the rent being to damn high or the free universities being not good enough or the bombardment of money you're exposed to if you make the highly uncharacteristic choice to, you know, breed.
But, yes, people who choose this "wage depression" over food stamps and a tent in the park must be thoroughly stupid. I can see that.

PS: You feel i'm not approaching this with the seriousness you feel you deserve? Try an OP with sources on a level above RT next time.
The fact that, as i said Münchau is very much not a "lets help the common folks" left-ish idealist but quite the opposite, just with a new shtick is really adding insult to injury.

 

[Ziggy Stardust]

Only a lazy fisherman would post stuff by people he has no idea about. The person you quoted (Varoufakis) is a known comedic-relief. I advise you to spend more time on reading about him though, you can only lose

Text book example of Ad Hominem.

 

[Hygro]

No they are asking Greece to get its act together before the other members of the EU spend their money trying to bail them out. I don't think it is unreasonable to demand some sort of guarantee that your money isn't going to be wasted before you loan it to someone. I also don't find it unreasonable to expect Greece to eventually payback every last Euro of aid they received with interest.

How? How can they possibly do it?

Remember: (labor) prices are sticky and Europe doesn't abide meaningful inflation at all.

And why should Greece, or even the world at large be down with Greek austerity? Why lose trillions of dollars in today's money of real output just to satisfy balance sheet ideology? A couple trillion of dollars worth of real labor, real product, real enjoyment of product over the next couple decades lost forever to space and time because of an artificial money constraint. Please explain why that's a good thing.

Greek politicians essentially cooked their financial books to get in and to maintain good standing with everyone involved once they were in.


I'd agree with this if Greece were not so broke that it cannot do massive fiscal stimulus. There's simply no money to do it and not enough ability to bring in creditors to finance it. The level of debt is already extreme, such that it will be long time before they can think about fiscal stimulus.

The EU could provide massive fiscal stimulus to Greece to help them through, however. I guess they think they are doing that in a roundabout way with the bailouts, but all it's done is add more debt that Greece can't pay back.

...and there's "no money" because Greece can't issue its own currency because it's stuck in the Eurozone. If your economy can produce 100x, but you only have money for 90x, and you have a free market system where if your stuff doesn't get bought you don't eat, there's a really easy simple solution.

 

[metatron]

And why should Greece, or even the world at large be down with Greek austerity? Why lose trillions of dollars in today's money of real output just to satisfy balance sheet ideology? A couple trillion of dollars worth of real labor, real product, real enjoyment of product over the next couple decades lost forever to space and time because of an artificial money constraint. Please explain why that's a good thing.

It's not like the bulk of the "supressed" economic activity in Greece was them actually providing goods and services for themselves and the rest of us.
Most of the real economy that is lost in Greece is consumption of imported goods. I.e. it's not "lost"; it merely happens to other people now.

...and there's "no money" because Greece can't issue its own currency because it's stuck in the Eurozone. If your economy can produce 100x, but you only have money for 90x, and you have a free market system where if your stuff doesn't get bought you don't eat, there's a really easy simple solution.

Feel free to force the Greek elites to do an actual stimulus (you know with investments in public works and things like that).
Just giving them the money won't do it. They'll call China and the US and order more iPhones.
Not because ze evil Germans are forciong their hand (sure, the Euro "helps", granted), but because the upper strata of Greek society like it.

 

[Commodore]

How? How can they possibly do it?

Remember: (labor) prices are sticky and Europe doesn't abide meaningful inflation at all.

And why should Greece, or even the world at large be down with Greek austerity? Why lose trillions of dollars in today's money of real output just to satisfy balance sheet ideology? A couple trillion of dollars worth of real labor, real product, real enjoyment of product over the next couple decades lost forever to space and time because of an artificial money constraint. Please explain why that's a good thing.



...and there's "no money" because Greece can't issue its own currency because it's stuck in the Eurozone. If your economy can produce 100x, but you only have money for 90x, and you have a free market system where if your stuff doesn't get bought you don't eat, there's a really easy simple solution.

But what are you proposing? That the EU should just let Greece take their money with no accountability so they can continue to waste it like a drunken sailor on overpaid government employees and a defense budget that is waaaay too large for a nation like Greece? No, Greece needs to cut back and get their spending under control and if they won't do it on their own then the EU will do it for them. And the EU has every right to force austerity on Greece in this venture because it is EU money, not Greek money, on the line. The other member states are risking their own economic health to keep the Greek government solvent.

Answer this question for me: Why should Greece be allowed to threaten the economic stability of the entire EU with its fiscal irresponsibility and the other members of the EU are expected to just stand by and do nothing to preserve their own economic stability? Face it, the "Eurocrisis" that the EU is still pulling itself out of started with nations like Greece that can't get their act together and have their priorities all out of whack.

I'm sorry, but there is just no way that Greece is the victim here. Whether you believe it or not, the EU is trying to protect itself and its member nations, including Greece. Ask yourself this: Where would Greece be right now if the EU did decide to just kick them to the curb when their economy collapsed? I don't know, but my guess is they would be keeping Moldova company as the poorest nation in Europe.

 

[Hygro]

It's not like the bulk of the "supressed" economic activity in Greece was them actually providing goods and services for themselves and the rest of us.
Most of the real economy that is lost in Greece is consumption of imported goods. I.e. it's not "lost"; it merely happens to other people now.

Consumption isn't "lost" economy, quite the opposite, so I don't quite understand what you mean.

Feel free to force the Greek elites to do an actual stimulus (you know with investments in public works and things like that).
Just giving them the money won't do it. They'll call China and the US and order more iPhones.
Not because ze evil Germans are forciong their hand (sure, the Euro "helps", granted), but because the upper strata of Greek society like it.

When I talk about lost economic activity I am talking about unemployment of people and resources for no other reason than a bad monetary system. Seriously, if the problem is "not enough money" then make more money. If Greek elites are going to control that money and spend it in ways that don't benefit their macroeconomy (i.e. by importing only for themselves, that's a political problem within Greece that isn't an issue of fiscal oppression.

But ultimately just being able to keep taxes low (by allowing tax evasion) and redundant government employee rolls up is, during a contraction, better than not. And the elites would let that happen on their own like they had before the crash.


@Commodore, forget the morality play for a moment. I'm asking you how Greece even could "pay back every penny".

I'm also asking you how Greece leaving the Euro would cause its economy to drop from $22,000 per capita (Greece now) to $2,000 per capita (Moldova). Greece was doing fine before the Euro.

And why is keeping Greek balance-sheet solvent even a risk for other EU states? If that's the case, doesn't that mean there's something inherently flawed with the Euro itself when real economic output has to take a backseat to the useful accounting fiction and technology that is money?

 

[metatron]

Consumption isn't "lost" economy, quite the opposite, so I don't quite understand what you mean.

Sure.
I meant that a large share of the "lost" import-based consumpton are likely compensated for on international markets.
Well-of people in Malaysia or Vietnam may buy the iphones Greeks cannot afford anymore. There will be a job for an iphone vendor in HCMC for the one lost in Greece etc.

Sure, there's still a loss after that would be accounted for (wich is like impossible to actually do), but it's hardly fair to just look at the numbers-on-paper loss in Greece and claim that that is all, completely, 100% of it etc. lost.
It isn't.

But ultimately just being able to keep taxes low (by allowing tax evasion) and redundant government employee rolls up is, during a contraction, better than not. And the elites would let that happen on their own like they had before the crash.

Yeah, sure, take Greece off the Euro and do that.
It's not exactly "great" but i agree that it roughly does what you want it to do.

Northern capital flowing to the South and the South having strong purchasing power (internationally) is not a flaw of the Euro, though. That's exactly what it was supposed to do. The idea was that the capital would be used - by all three major actors in an economy - to raise southern productivity and living standards to the level of France and Germany (or closer to it or whatever).
You can call that naive in retrospect as much as you want, sure. Have at it.

I'm not super against all you (singular or plural) are saying here.
As usual i just want to insert that:
a) It's not a nefarious scheme by ze evil Germans.
b) QEing Greece out of the ditch is not exactly loads of happy fun times either (by which i don't mean that it is exactly equally bad in the same ways).

@Commodore, forget the morality play for a moment. I'm asking you how Greece even could "pay back every penny".

It can't and it will not. Most of the public debt held by the ECB will never be paid in full. Duh.

 

[innonimatu]

Northern capital flowing to the South and the South having strong purchasing power (internationally) is not a flaw of the Euro, though. That's exactly what it was supposed to do. The idea was that the capital would be used - by all three major actors in an economy - to raise southern productivity and living standards to the level of France and Germany (or closer to it or whatever).
You can call that naive in retrospect as much as you want, sure. Have at it.

No, the idea was never that. The very rules of the European Union prevented that capital from being used productively. Governments were prevented from intervening in the economy through direct investment, lest they mess with "competition". But in the absence of any government direction on how those funds were to be used, they were bound to be used in the most profitable way for the banks: consumer credit and speculation. And it paid off so far, because the banks were not allowed to go bankrupt. It was rational. The whole thing worked and is working as designed. The Euro was not a development project, it was and is the great project of the people running the financial systems - to the detriment of everyone else.

@Commodore:
This is where the "moral argument" for repaying the debt falls apart: the idea that certain obligations must be met, namely those towards creditors. Lending entails a risk for the lender, which is incorporated into the interest charged. If lenders mis-allocated their funds, they certainly should lose them.

The Greek government must default on some obligations. The issue was and is on which ones. Does it default on the leans it took from banks? On the loans from international institutions? On those by the ECB? On its obligations towards its workers? On its mission to support social services? On its commitments to run several national infrastructures?
Whatever it does, it must default on some of these. And it should choose so as to cause the least harp to the greek at large, for that is the first and foremost obligation of any government: defending the people it rules.

 

[Azale]

bla bla bla

You're acting like a jerk. I didn't quote Munchau, I quoted Varoufakis who is not "RT". He's an economist from the University of Texas, who has appeared on RT a few times. Hey look, here is his CV. Maybe it's enough to impress the Great Metatron.

I don't know why you keep talking about Munchau. Maybe your reading is as scatterbrained as your posting?