Greece Watch...

[UndercoverElephant]

Yes, but they are accepting that the discussions about this will be later not as part of the temporary support scheme.

As far as I am aware, until now the Germans have not accepted that those discussions are going to happen at all. The German policy is to not allow any write off of Greek debt because of the precedent it would set.

For the Germans (and ECB/EU) to accept that this has to happen eventually - and to accept it now - is a crucial concession. The exact detail of precisely how much debt is going to be written off does not need to be decided now, but acceptance that some of it will be, does.

Leaving this as a grey area with no agreement on what "sustainable" means is potentially as damaging to the Germans/EU as it is to Greece, because it sets the scene for yet another crisis in the future when agreement on what it means is unreachable.

[peaceful_life]

'It is perverse for the ECB to violate its treaty objectives with reference to a risk its own actions are making much, much worse. It is, in effect, dealing with risk not as a public institution of prime importance, but as a private bank, and an arch-conservative one at that. If the euro really does split, this will have been the main, and entirely avoidable, reason'.

http://www.ft.com/cms/s/3/57579b88-255d ... z3fJX16c4G

[raspberry-blower]

Thomas Piketty: Austerity has Failed: An Open letter from Thomas Piketty to Angela Merkel

As most of the world knew it would, the financial demands made by Europe have crushed the Greek economy, led to mass unemployment, a collapse of the banking system, made the external debt crisis far worse, with the debt problem escalating to an unpayable 175 percent of GDP. The economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.

The humanitarian impact has been colossal—40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent. Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem. The Greeks have complied with much of German Chancellor Angela Merkel’s call for austerity—cut salaries, cut government spending, slashed pensions, privatized and deregulated, and raised taxes. But in recent years the series of so-called adjustment programs inflicted on the likes of Greece has served only to make a Great Depression the likes of which have been unseen in Europe since 1929-1933. The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.

[raspberry-blower]

Michael Hudson: The Financial Attack on Greece: Where to from here?

Imposed by the monopoly of inter-governmental financial institutions – the IMF, ECB, U.S. Treasury, and so forth – creditor financial leverage has become the 21st century’s new mode of warfare. It is as devastating as military war in its effect on population: rising suicide rates, shorter lifespans, and emigration of the age-cohort that always have been the major casualties of war: young adults. Instead of being drafted into the army to fight foreign foes, they are driven from their homes to find work abroad. What used to be a rural exodus from the land to the cities from the 17th century onward is now a “debtor exodus” from countries whose governments owe unpayably high sums to creditor governments and to the banks and bondholders on whose behalf they impose their policy.

While pushing the world economy into a state of war internationally, high finance also is waging a class war against labor – and ultimately against governments and thus against democracy

With specific regard to Greece, Syriza’s leaders have said that they want to save Europe. Principally, from the eurozone’s destructive economic irrationality in not having a real central bank. This defect was deliberately built into the eurozone, to enforce a monopoly of commercial banks and bondholders powerful enough to gain control of governments, overruling democratic politics and referendums.

Eurozone rules – the Maastricht and Lisbon treaties – aimed at blocking governments from running budget deficits in a way that spend money into the economy to revive employment. The new aim is only to rescue bondholders and banks from making bad loans and even fraudulent loans, bailing them out at public expense. Economies are obliged to turn to commercial banks for loans to obtain the money that any economy needs to grow. This principle needs to be rejected on grounds that it violates a basic sovereign right of governments and economic democracy

[3rdRock]

http://www.bbc.co.uk/news/world-europe-33456182

Banks stay shut as endgame looms

The Greek government has extended bank closures and a €60 (£43; $66) daily limit on ATM withdrawals until Monday.

[johnhemming2]

As far as I am aware, until now the Germans have not accepted that those discussions are going to happen at all. The German policy is to not allow any write off of Greek debt because of the precedent it would set.

The compromise on this is to agree to discuss the issue. It is still clear that there will be no reduction in nominal value. There is likely to be some rescheduling. That is inherently part of any bail-out anyway. The quantum issue can be worked out within the context of the wider picture.

In anyway they need to come up with sensible proposals today. (back to the issues about VAT and pensions at 50).

[biffvernon]

Another interview with someone with credibility amongst thinkers: Thomas Piketty -
http://www.zerohedge.com/news/2015-07-0 ... er-nations

[UndercoverElephant]

As far as I am aware, until now the Germans have not accepted that those discussions are going to happen at all. The German policy is to not allow any write off of Greek debt because of the precedent it would set.

The compromise on this is to agree to discuss the issue. It is still clear that there will be no reduction in nominal value.

Is it?

There is likely to be some rescheduling.

Not good enough. That leaves the debt unsustainable and the crisis will continue.

You cannot solve a debt crisis by adding more debt. CANNOT.

[Little John]

I disagree with pretty much everything this man's party stand for, But, on this he is right.

http://www.telegraph.co.uk/news/worldne ... -euro.html

[johnhemming2]

There is likely to be some rescheduling.

Not good enough. That leaves the debt unsustainable and the crisis will continue.

You cannot solve a debt crisis by adding more debt. CANNOT.

What matters is the money that Greece has to pay (and the currency it is denominated in). Money due to be paid today is harder to come by than Money due to be paid in 50 years.

Hence it is possible to adjust what they have to pay through rescheduling and, of course, interest rates without reducing the official amount owed today.

I am not saying that this is what will happen for the long term, but it is obviously happening in the short term.

[UndercoverElephant]

There is likely to be some rescheduling.

Not good enough. That leaves the debt unsustainable and the crisis will continue.

You cannot solve a debt crisis by adding more debt. CANNOT.

What matters is the money that Greece has to pay (and the currency it is denominated in).

That says it all. What matters to who, John? If all you give a shit about are the eurocrats and the banks, then all that matters is the money that Greece has to pay: lend 'em even more, pile the debt high, and keep reaping those interest payments...yeah!!! Who cares about the plight of Greece? Worthless f**kers! Keep 'em in debt slavery forever...yeah!!!

If, alternatively, you actually showed the thinnest sliver of humanity and cared one tiny little f*ck about the real people in Greece who are already experiencing the worst European depression since 1929 and who desperately want to know there is some light at the end of the tunnel, then what matters is that Greece is offered a realistic way out of the mess it is in. But as already discussed, this is not going to be offered to them because of the political consequences for the relationship between Germany and other "deficit states" in the Eurozone (i.e. nothing whatsoever to do with Greece).

I expect this sort of attitude from Tories. Liberal Democrats ought to know better...or at least that is what I thought until five years ago. What an idiot I was.

[3rdRock]

I disagree with pretty much everything this man's party stand for, But, on this he is right.

http://www.telegraph.co.uk/news/worldne ... -euro.html

Much as I hate to admit it, I agree.

[peaceful_life]

'Greece has mapped out details of a planned landmark €2bn gas project with Russia in a move that could stir tensions with Brussels just as Athens is seeking a third bailout.'......


'Mr Lafazanis said Greece was aiming to secure a deal with Brussels as quickly as possible. But he warned EU institutions that Athens was not about to roll over.'...


“Greece is no one’s hostage,” he said. “The Greek people’s No vote, and I am referring to all of the people, is not going to become a humiliating Yes. Greece is not, under threat of execution, ready to accept any fait accompli.”.......


http://www.ft.com/cms/s/0/c3e2221e-2639 ... z3fPZ6c25n

[johnhemming2]

That says it all. What matters to who, John? If all you give a shit about are the eurocrats and the banks, then all that matters is the money that Greece has to pay: lend 'em even more, pile the debt high, and keep reaping those interest payments...yeah!!! Who cares about the plight of Greece? Worthless f**kers! Keep 'em in debt slavery forever...yeah!!!

What I find surprising that you don't understand is that if the amounts the greeks actually pay are reduced, or pushed into the future without reducing the nominal debt then the Greeks are in a better situation. However, the nominal debt has not been reduced.

Hence this is the sort of solution that deals with the outcomes that both you and I wish to see.

[UndercoverElephant]

That says it all. What matters to who, John? If all you give a shit about are the eurocrats and the banks, then all that matters is the money that Greece has to pay: lend 'em even more, pile the debt high, and keep reaping those interest payments...yeah!!! Who cares about the plight of Greece? Worthless f**kers! Keep 'em in debt slavery forever...yeah!!!

What I find surprising that you don't understand is that if the amounts the greeks actually pay are reduced, or pushed into the future without reducing the nominal debt then the Greeks are in a better situation.

No they aren't. They are in exactly the same situation.

There is no difference between being having a debt you can never pay off and having a slightly larger debt that you can never pay off at a slightly slower speed. None whatsoever. In both cases you have a debt you can never pay off.

What is it about this that do you not understand?