Greece Watch...

[snow hope]

The IMF is using its outmoded and discredited tactics and demands: hitting the poor with VAT increases, hammering pensions, emasculating unions, rampant privatisation etc etc.

I don't disagree. But the Greeks, under the previously elected Government, chose to agree to the loans and conditions associated with them.

This agreement cannot be undone willy nilly. Anybody who thinks this is simply being unrealistic. They can try to argue (as they are) to new agreements and changed conditions, but if the other party will not agree then they cannot do it unilaterally. End of story. That is the way the world works.

The Greeks need to get more real!

[Little John]

The IMF is using its outmoded and discredited tactics and demands: hitting the poor with VAT increases, hammering pensions, emasculating unions, rampant privatisation etc etc.

I don't disagree. But the Greeks, under the previously elected Government, chose to agree to the loans and conditions associated with them.

This agreement cannot be undone willy nilly. Anybody who thinks this is simply being unrealistic. They can try to argue (as they are) to new agreements and changed conditions, but if the other party will not agree then they cannot do it unilaterally. End of story. That is the way the world works.

The Greeks need to get more real!

You know as well as I do that previous government was little more than a bunch of EU Troika shills who were shoe-horned in. And what, exactly, does "get more real" mean? You do understand that in any economic area where, for whatever geographical/historical reason, once part of that area generates more money than another part, then the money get's redistributed as debt via the banking system? It is as inevitable as night follows day. Indeed, in the case of the EU, it was actively encouraged by the German central bank because of all of the restrictions on lax lending practices in Germany itself. In other words, whilst the German central bank was unhappy about the German banks taking a shit in their own back yard, they were more than happy for them to do so in their neighbours yard. Especially so given the boost it gave to German GDP as all of that Greek debt was able to pay for shiny new German BMWs, railways, and all the rest.

The only way the above get mitigated is by having absolutely identical financial regulations across the entire area, alongside wealth redistribution mechanisms via tax collection and allocation. In other words, a fully United States of Europe. Imagine, for a minute, how much worse would be the economic disparity between the south East of England and the rest of the UK if we did not have those mechanisms in play here. But we don't have that in Europe. Instead, we have the worst of all worlds. One where countries do not have the freedom to devalue their own currencies and or change their own interest rates to stimulate economic activity. But, at the same time do not have the protection of all of the wealth redistribution mechanisms that come with a fully integrated state.

This crisis was inevitable and if it hadn't been Greece it would have been somewhere else.

[johnhemming]

Whether that is true or not (and I don't think it is true) the Greek Government have to recognise that the rest of the Eurozone don't want to fund Greeks retiring at 50. Nor will they agree to reducing the debt (at this stage). If Greece defaults that does not mean that the debt either gets reduced or denominated in another currency.

The EU already pays Greece about 4bn Euros a year through its support systems. The Eurozone could take that for the interest.

I agree with the Eurozone finance ministers that humanitarian aid is likely to be needed.

However, this is not a plot it is simply reality which has to be faced up to - in the same way as fossil fuel depletion will have to be faced up to in the future.

[Little John]

Whether that is true or not (and I don't think it is true) the Greek Government have to recognise that the rest of the Eurozone don't want to fund Greeks retiring at 50. Nor will they agree to reducing the debt (at this stage). If Greece defaults that does not mean that the debt either gets reduced or denominated in another currency.

The EU already pays Greece about 4bn Euros a year through its support systems. The Eurozone could take that for the interest.

I agree with the Eurozone finance ministers that humanitarian aid is likely to be needed.

However, this is not a plot it is simply reality which has to be faced up to - in the same way as fossil fuel depletion will have to be faced up to in the future.

You are equating the "reality" of EU economic policy with that of geology?

Seriously?

If you are, then I will not be taking a single post of yours seriously from this point.

[johnhemming]

So no change there then.

[adam2]

Whilst one might doubt the validity of EU economic policy and hold differing views on this, it is beyond reasonable doubt that for many years Greece has been spending more than it earns.
The difference may be called grants, loans, subsidies or bail outs, but it is money received without earning it.

It is becoming increasingly difficult to persuade German or British workers that they should work for longer in order to pay for Greeks to retire early.

Whilst some of Greek people, and some of their supporters take the view that loans taken out by the previous Greek government are "odious" or unreasonable in some other way they are entering very dubious territory by so doing.
To say the least, it will be challenging to borrow money in future if a country expects to borrow money and then elect a new government that votes not to give it back.

If Greece DOES receive the latest bail out, what is to stop the NEXT Greek government voting to not return it ?

I expect a default, not perhaps next week as some way may be found to delay it. After the default there will be a short period of rejoicing in Greece and by the left elsewhere, at the "people having defeated the wicked fat cat bankers"
Then reality will sink in as they realise that they have to survive on what they earn, plus perhaps some charitable help to feed the hungry.

The "new Drachma" will probably inflate to worthlessness in weeks at the most. Rampant inflation will be blamed not on printing too much money, but on speculators and profiteers who keep increasing prices of essentials.

[Little John]

Either the EU is what it has always been implied (and sometimes overtly stated) to be and does whatever is necessary to allocate resources equitably across all of its regions in order to maintain social, economic and political stability. Or, it does not. In which case, all of the restrictions on individual countries to set, in their own national interests, their own monetary policies, interest rates and all the rest has been a sick joke. Given that the Germans and other Northern European countries' populations will not stand for supporting Greece (not least because they never signed up to a United-States-Of-Eupope in the first place), Greece is best of out of it, no matter what the short term costs. And there is no doubt those costs will be severe.

As it is, the current Troika terms are all about sacrificing Greece on the alter of the German and other European banking systems.

[johnhemming]

The point about a single currency is that it has a single monetary policy.

The key thing about 30th June is that for the ECB to provide ELA Greece has to be in "a programme". The programme comes to an end on 30th June and although "default" will be a problem the restriction on ELA will probably happen before an official default.

That's Tuesday folks as a deadline so one would expect the banks to shut down on Wednesday.

The noises from Germany are such that even if Greece changes tack they will not agree additional funding until Greece has passed into law the required changes (including stopping early retirement from 30th June). Then it will have to pass through the parliaments of other countries (which will also take time).

I can understand Tsipras not wanting to do a complete kolotoumbes. However, there really is no choice here.

[emordnilap]

Retiring at 50 should be optional and, as an argument, a bit of a straw person. The assertion that it 'can't be afforded' is another.

[johnhemming]

It all depends really on whether you bother about the need for governments to balance the books. If governments can simply print money then OK. That is your view. I disagree.

However, I have read the documents relating to the greek proposed bailout. At the the moment many greeks can retire at 50. At least one of Syrizia's new MPs had retired and was getting her state pension in her 50s.

The problem for the government is that the pensioners get their state pension and are not earning other money and hence not paying tax on the other earnings.

An extra 17 years of state dependency costs the government (and in the current situation the UK (through the IMF) and German/Finnish/Slovakian/French/Portuguese (through the Eurozone) taxpayers a lot of cash.

If you want to give the Greeks money for that then please do send them a cheque. I don't personally think it is reasonable to expect Britons to work to 67 in order to pay the greeks a pension at 50.

It is possible that the greek banks go on holiday before Wednesday of course.

[biffvernon]

fossil fuel depletion will have to be faced up to in the future.

Tangential to this discussion, but it turns out that global warming will have to be faced up to first, while most of the fossil fuel is kept remaining in the ground.

[emordnilap]

That is your view.

Ah. Steve was right.

[johnhemming]

I don't personally take the view that governments can simply print money to deal with funding deficits. On that basis expenditure needs to be managed. Hence the costs of having a system which allows people to retire at 50 need to be taken into account.

You said:
>Retiring at 50 should be optional and, as an argument, a bit of a straw person. The assertion that it 'can't be afforded' is another.

You are arguing that retiring at 50 as an option can be afforded (I assume by Greece). I would be interested in seeing your calculations for this.

[Little John]

I don't personally take the view that governments can simply print money to deal with funding deficits. On that basis expenditure needs to be managed. Hence the costs of having a system which allows people to retire at 50 need to be taken into account.

You said:
>Retiring at 50 should be optional and, as an argument, a bit of a straw person. The assertion that it 'can't be afforded' is another.

You are arguing that retiring at 50 as an option can be afforded (I assume by Greece). I would be interested in seeing your calculations for this.

Printing money is precisely how the EU and USA has dealt with it's banking crisis, which is what has largely led to the sovereign deficits in many European countries, including Greece. The banks should have been left to fail and the the printing presses should have been solely employed to put money into citizens' state bank accounts to cover the losses of domestic depositors. This would have had two benefits, one moral and the other practical. The first benefit would have been to reward the savers and punish the lenders and borrowers. The second benefit would have been to stimulate far more economic activity than all of the trillions that have been pushed into the banking system, that has then subsequently rushed into the hard commodities sector, in turn raising the price of the goods and services that flow from those commodities that an impoverished population must then suck up, adding insult to the injury of a progressively gutted state service sector. But, then, this was NEVER about protecting the deposits of citizens or of protecting citizens in general. It was ALWAYS about keeping the whole stinking pile of debt ridden corruption of a banking system afloat.

[johnhemming]

Printing money is precisely how the EU has dealt with it's banking crisis, which is what has largely led to the sovereign deficits in many European countries, including Greece.

And how do you justify this patently absurd statement?

Is there anyone that you can link to who has any rational arguments that substantiate this?