Greece Watch...

[biffvernon]

It’s all too easy, when you hear of markets in disarray and banks closing on the other side of the continent, to forget about the terrible human impacts of the crisis in Greece. Over 40% of children are living in poverty, a quarter of the workforce is unemployed, youth unemployment is at almost 50% and the healthcare system is close to collapse. Beyond the hackneyed headlines of a ‘Greek tragedy’ are people living on the brink, struggling to feed and clothe their families.

It’s abundantly clear that the Troika’s (the IMF, EU and European Central Bank’s) plan is failing in human terms – but it’s an economic failure too. Greece’s Government debt has grown from 133% of GDP in 2010 to 174% today. Since 2010 the Troika has lent €252 billion to the Greek government. Of this, the vast majority of the money was used to bailout banks, pay off the private sector to accept restructuring, and repay old debts and interest from reckless lending. Less than 10% of the money has actually reached the people who need it in Greece.

In light of this profound failure, it’s clear that a change of direction is desperately needed from the Troika. But the solution to such misery being offered by European Governments and the IMF is…more misery. They want more austerity inflicted on the Greeks, indeed they want to entirely strip down the Greek state and refashion it as a servant of capital rather than people.

The stand off we’re seeing this week matters to all of us. It involves a democratically elected Government that’s trying – against all the odds – to protect people from the ravages of austerity, pitted against an unelected Troika hellbent on defying the will of the Greek people.

The Greek Government isn’t rejecting any change whatsoever, but instead calling for a debt conference, based on the ‘London conference’ which agreed debt cancellation for Germany in 1953. That conference agreed to cancel 50% of Germany’s debt to governments, people and institutions outside the country, and paved the way for Germany to recover from the crippling war.

This evening I’ll be joining many others at the Greek Solidarity Demonstration in Trafalgar Square. Our demand is that our Prime Minister supports calls for a European Conference, along the lines of what happened in 1953, to bring Greece back from the brink.

The people of Greece have shown incredible resilience in extremely difficult times. They’ve worked together to provide on-the-ground assistance to those in need – from medical treatment to food banks. But there’s only so much cutting the social fabric in Greece can take before it tears apart. Any self-respecting democratic can see that further forced austerity in Greece is wrong. It’s time for Europe’s leaders, including David Cameron, to stand up for democracy and back a credible solution to Greece’s dire problems.

http://www.globaljustice.org.uk/blog/20 ... 2U.twitter

[biffvernon]

A global debt holiday would be total chaos.

We don't want chaos, do we? So the Fairy had better work gently, a piece at a time. Here's Caroline Lucas's suggestion for the first step:

The Greek Government isn’t rejecting any change whatsoever, but instead calling for a debt conference, based on the ‘London conference’ which agreed debt cancellation for Germany in 1953. That conference agreed to cancel 50% of Germany’s debt to governments, people and institutions outside the country, and paved the way for Germany to recover from the crippling war.

Sounds like a plan to me.

[johnhemming]

The initial problem for the Greek Government is that it needs more money than its taxation revenue to fund its costs (if it pays everything it is supposed to pay including suppliers).

[Blue Peter]

The initial problem for the Greek Government is that it needs more money than its taxation revenue to fund its costs (if it pays everything it is supposed to pay including suppliers).

So, how will taking even more money out of the country help?


Peter.

[Little John]

Intervention by Yanis Varoufakis, 27th June 2015 Eurogroup Meeting

Colleagues, the referendum solution is optimal for all, given the constraints we face.

* If our government were to accept the institutions’ offer today, promising to push it through Parliament tomorrow, we would be defeated in Parliament with the result of a new election being called within a very long month – then, the delay, the uncertainty and the prospects of a successful resolution would be much, much diminished

* But even if we managed to pass the institutions’ proposal through Parliament, we would be facing a major problem of ownership and implementation. Put simply, just as in the past the governments that pushed through policies dictated by the institutions could not carry the people with them, we too would fail to do so.

On the question that will be put to the Greek people, much has been said about what it should be. Many of you tell us, advise us, instruct us even, that we should make it a Yes or No question on the euro. Let me be clear on this. First, the question was formulated by the Cabinet and has just been passed through Parliament – and it is “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?” This is the only pertinent question. If we had accepted that proposal two days ago, we would have had a deal. The Greek government is now asking the electorate to answer the question you put it to me Jeroen – especially when you said, and I quote, “you can consider this, if you wish, a take or leave it proposal”. Well, this is how we took it and we are now honouring the institutions and the Greek people by asking the latter to deliver a clear answer on the institutions’ proposal.

The rest of his speech can be found here:

http://www.informationclearinghouse.inf ... e42267.htm

Basically, this is about democracy versus corporate capitalism.

[johnhemming]

I don't think the EZ are proposing to speed up payments of debt. If anything they are slowing it down. The idea is to get the government itself to spend less than it earns.

[UndercoverElephant]

I don't think the EZ are proposing to speed up payments of debt. If anything they are slowing it down. The idea is to get the government itself to spend less than it earns.

Right. So when the US and UK go into recession/depression, the prescribed medicine is "stimulus", in the form of endless money-printing and near zero interest rates, but when Greece is in recession/depression, the prescribed medicine is endless severe austerity.

And you can't see even a teeny weeny bit of double standards here?

Austerity doesn't work. Cutting spending during a deep depression does not work. All it does is deepen the depression and make the fiscal situation worse. Exactly this is what has happened to Greece in the last few years - the medicine has had the reverse effect to the one "intended". So why are you insisting that more of the same medicine is a good idea???

The true purpose of these policies is to keep Greece in debt slavery forever more, in order to transfer ever more wealth and power to the European and Global elite.

As an aside:

You (the libdems) are no better than the tories you propped up in power for 5 years. I was one of the many people who for most of my life believed the libdems were a progressive, left-leaning party (my late father was also a liberal democrat councillor on a tory-run council). I have voted libdem in the past. Never again. Quite frankly I am so angry about what has happened - Nick Clegg's grotesque betrayal of the people who voted for him, leading to a Tory majority government on the lowest ever share of the vote - that I would like to see the liberal democrat party consigned to history. Your espoused views on this topic are doing nothing to change my mind.

[3rdRock]

This is how some financial analysts view the Greek crisis:

http://www.marketwatch.com/story/why-th ... 2015-06-29

Why the Greek crisis is actually good for Europe

Every cloud has a silver lining, and that may even hold true for the Greek debt crisis.

After a dramatic weekend of failed negotiations and surprising twists, investors are fretting about the outlook for the eurozone. But the increased tensions could help, not hurt, the wider currency union, David Zahn, head of European fixed income at Franklin Templeton Investments, said at the sidelines of the Fund Forum International conference in Monaco.

“I see [the market volatility] as an opportunity, because I don’t think fundamentals for any of the countries in the eurozone have changed. This is an isolated event,” Zahn said.

“Opportunities will almost inevitably be in the periphery, places like Italy and Spain for bonds,” he added.

These parasites disgust me. They are incapable of recognising or understanding the human misery and hardship that has befallen the poorest in our societies.

[3rdRock]

http://www.standard.co.uk/news/politics ... 53748.html

Trafalgar Square protest: Anti-austerity activists hold demonstration over Greek debt crisis

Labour leadership contender Jeremy Corbyn and Green MP Caroline Lucas were joining a rally in London today to show solidarity with Greece.

The rally in Trafalgar Square was set to feature a range of MPs and activists. Islington North MP Mr Corbyn has called for the Greek debt to be cancelled to allow the country's economy to be rebuilt.

Mr Corbyn has said: "There is an escalating crisis of Greek society. There is no sane solution to the situation in Greece that involves repaying this debt.

"The only sensible way forward is to cancel the Greek debt - or at least substantial swaths of it - and for the international community to support Greece's democratically elected government to rebuild its society and its economy."

[Tarrel]

This is how some financial analysts view the Greek crisis:

http://www.marketwatch.com/story/why-th ... 2015-06-29

Why the Greek crisis is actually good for Europe

Every cloud has a silver lining, and that may even hold true for the Greek debt crisis.

After a dramatic weekend of failed negotiations and surprising twists, investors are fretting about the outlook for the eurozone. But the increased tensions could help, not hurt, the wider currency union, David Zahn, head of European fixed income at Franklin Templeton Investments, said at the sidelines of the Fund Forum International conference in Monaco.

“I see [the market volatility] as an opportunity, because I don’t think fundamentals for any of the countries in the eurozone have changed. This is an isolated event,” Zahn said.

“Opportunities will almost inevitably be in the periphery, places like Italy and Spain for bonds,” he added.

These parasites disgust me. They are incapable of recognising or understanding the human misery and hardship that has befallen the poorest in our societies.

Double +1

[Snail]

UE:

Austerity doesn't work. Cutting spending during a deep depression does not work. All it does is deepen the depression and make the fiscal situation worse. Exactly this is what has happened to Greece in the last few years - the medicine has had the reverse effect to the one "intended". So why are you insisting that more of the same medicine is a good idea???

Because its an automatic, lazy response (I'm so polite). Creating money by creating jobs, and employing and paying workers a decent wage is a good way to stimulate an economy. Managing a country isn't the same as managing a household. Greece is a country. It's not a household and shouldn't be treated like one.

I haven't read most of this thread but I can imagine some of JH's comments.

[johnhemming]

The problem is that the question as to the impact as to additional spending is complex. It is arguable that all government spending increases economic activity directly.

The first question, however, is what the additional tax take (or reduction of other spending) is as a result of the additional spend.

If you spend an extra EUR1 and get say EUR1.2 of extra activity, but the yield for the state is only EUR 0.75 then you have added EUR 0.25 to the deficit.

The second question is whether borrowing the money stops other economic activity that may have happened.

There are clearly some circumstances where government support stops disruption and is economically in the interest of the state as a whole. Furthermore there are public policy justifications for some means tested benefits.

The IMF. ECB and EZ do consider these questions in some detail.

As to the question as to whether “austerity” “works”. There are two questions
a) The definition of austerity. It appears that some people oppose all government spending cuts. Is that really a rational position to take? It strikes me as irrational a position as supporting all government spending cuts.

b) The definition of works. If the objective more generally is a reduction in state deficits clearly it is working more generally. Greece has a particular problem because it developed as a dependency economy. I accept the argument that this is not only Greece's fault, however.

It remains, however, that Greece has to stop being a dependency economy.

Why, because I want to concentrate our state revenues on looking after public services in the UK rather than maintaining early retirement in Greece or VAT exemptions for the Aegean Islands. I also believe that going to restaurants and staying in hotels is a luxury and should not have a discounted tax rate. I am worried about the impact of cuts in the UK. The UK has funded some of Greece's debt through the IMF.

[3rdRock]

John H, there's only ONE question worthy of discussion now.

How will the poor and disadvantaged in Greece fend for themselves faced with their current economic predicament?

[UndercoverElephant]

As to the question as to whether “austerity” “works”. There are two questions

a) The definition of austerity. It appears that some people oppose all government spending cuts. Is that really a rational position to take. It strikes me as irrational a position as supporting all government spending cuts.

No, I don't oppose all cuts in spending. I would not, for example, oppose the cutting of £50bn due to be spent on renewing trident. What I object to is ideologically-motivated cuts dressed up as "fiscal prudence". Our current tory government is not cutting because it makes fiscal or economic sense. It is cutting because it acts in the interests of the wealthy and is opposed to government funding of things like health, social security and education on principle. If they thought they could could get away with it, they'd privatise the NHS and the education system completely, and probably abolish social security. They cut because they do not care about the people who depend on government support. They cut because they are nasty people with no social conscience who think the rich deserve to be rich and everybody else deserves to be trodden into the dirt.

b) The definition of works. If the objective more generally is a reduction in state deficits clearly it is working more generally. Greece has a particular problem because it developed as a dependency economy. I accept the argument that this is not only Greece's fault, however.

If cutting government spending causes further economic contraction, leading to lower tax takes and a higher welfare bill, then it is not working.

It remains, however, that Greece has to stop being a dependency economy.

Then it cannot stay in the euro under current conditions.

Do you think Liverpool is a "dependency economy"??
Do you think it can stop being so?

Once upon a time Liverpool was just about the most prosperous city in the UK. The Bridgewater and Trent & Mersey canals had just been completed, railways hadn't been invented yet and Liverpool was at the centre of the most advanced trade and industrial network that had ever existed. It wasn't a dependency economy then. Now it is as irrelevant as a port as the canals are irrelevant as a transport system, and it is basically being used as a dumping ground for asylum seekers. But Liverpool is part of the same nation as London, and we're all in it together. We accept that as a city, it is now a "dependency economy". It's called "being part of the same nation."

Why, because I want to concentrate our state revenues on looking after public services in the UK rather than maintaining early retirement in Greece or VAT exemptions for the Aegean Islands.

Then you should probably vote "out" in the coming referendum.

I also believe that going to restaurants and staying in hotels is a luxury and should not have a discounted tax rate. I am worried about the impact of cuts in the UK. The UK has funded some of Greece's debt through the IMF.

The cuts in the UK are entirely unneccessary. The money being saved could easily be recouped by clamping down hard on tax avoidance and evasion, but the torys won't do that because it's their mates who are avoiding and evading.

Not to mention that it is within the power of the government to reclaim the power of creating money from the banks, thereby instantly re-channeling into public hands vast amounts of money in interest payments that currently goes into the pockets of the shareholders and employees of banks.

Of course, solutions like these involve upsetting the powers that be, and we couldn't have that, could we?

[Little John]

>You're a ******* politician and a half, that's for sure.
How much money have you personally sent the Greeks?

As yet, none. As of tomorrow morning, as much as i can reasonably afford, I understand that there is a fund being setup whereby ordinary people in this country can help ordinary people in Greece. It's a pathetic state of affairs when it comes to this, but politicians just like like you running our world have made it thus.