Grexit
June 18, 2015 11:05 AM Subscribe
What's happening in Greece? Explaining the Greek Debt Crisis. Latest developments: In the Eurozone, growing support for a Greek Exit. while Greeks are stashing €10,000 bundles in their homes. preparing for what the Greek Central Bank calls a financial collapse.
At any rate I think that this proves that you can't just take two radically different economies - Greece and Germany - and force them to share a currency and make it work. France and Germany, sure. But sharing the euro has basically tied a freight train to a donkey cart and they keep telling the donkey to run faster and lose more weight neither of which is going to fix the situation.
I think it doesn't prove that at all. All it proves is that you can't force them to share a currency and then tell a country in economic trouble to "deal with it" until it becomes too big a clusterfuck to right through more sane methods.
If the Eurozone had come to the party, backed the bonds and developed an actual plan rather than "tut tut, lazy fucking Greeks getting what they deserve" it would look a LOT different right now. Instead we get this fucking triumph of American style neoliberalism.
posted by Talez at 11:20 AM on June 18, 2015 [30 favorites]
I think it doesn't prove that at all. All it proves is that you can't force them to share a currency and then tell a country in economic trouble to "deal with it" until it becomes too big a clusterfuck to right through more sane methods.
If the Eurozone had come to the party, backed the bonds and developed an actual plan rather than "tut tut, lazy fucking Greeks getting what they deserve" it would look a LOT different right now. Instead we get this fucking triumph of American style neoliberalism.
posted by Talez at 11:20 AM on June 18, 2015 [30 favorites]
I've found Paul Krugman's writing on this to be interesting: 1, 2, 3.
posted by Aizkolari at 11:22 AM on June 18, 2015 [4 favorites]
posted by Aizkolari at 11:22 AM on June 18, 2015 [4 favorites]
From the first link to Paul Krugman:
The problem has been that severe spending cuts in an economy with no independent monetary policy and no ability to devalue lead to severe economic contraction, which in turn means that a large part of what’s gained fiscally at the front end gets lost via reduced revenue. This isn’t the fault of the Greeks, it’s basically a design flaw in the euro itself.
So maybe I get too much of my economic thinking from reading Krugman, but this is what I was trying to say but worded by an actual economist and writer. It seems like a downward spiral.
posted by GuyZero at 11:26 AM on June 18, 2015 [7 favorites]
The problem has been that severe spending cuts in an economy with no independent monetary policy and no ability to devalue lead to severe economic contraction, which in turn means that a large part of what’s gained fiscally at the front end gets lost via reduced revenue. This isn’t the fault of the Greeks, it’s basically a design flaw in the euro itself.
So maybe I get too much of my economic thinking from reading Krugman, but this is what I was trying to say but worded by an actual economist and writer. It seems like a downward spiral.
posted by GuyZero at 11:26 AM on June 18, 2015 [7 favorites]
At any rate I think that this proves that you can't just take two radically different economies - Greece and Germany - and force them to share a currency and make it work.
I think it proves that currency union without fiscal union is a recipe for disaster. (Although the ECB's "one size fits Germany" monetary policy doesn't help.)
posted by Pseudonymous Cognomen at 11:26 AM on June 18, 2015 [17 favorites]
I think it proves that currency union without fiscal union is a recipe for disaster. (Although the ECB's "one size fits Germany" monetary policy doesn't help.)
posted by Pseudonymous Cognomen at 11:26 AM on June 18, 2015 [17 favorites]
So maybe I get too much of my economic thinking from reading Krugman, but this is what I was trying to say but worded by an actual economist and writer. It seems like a downward spiral.
Oh he's not wrong. Without any external intervention it was basically bound to happen. But there were more graceful ways of attacking this problem. Germany demanded blood from the stone and Greece most certainly delivered it cutting spending hard and fast. Then the rest of their revenue just fucking collapsed just as most demand side economists (including Krugman) predicted this would have happened.
They wanted Greece to do what was "morally" "right" instead of the community coming together to do was was correct.
posted by Talez at 11:36 AM on June 18, 2015 [13 favorites]
Oh he's not wrong. Without any external intervention it was basically bound to happen. But there were more graceful ways of attacking this problem. Germany demanded blood from the stone and Greece most certainly delivered it cutting spending hard and fast. Then the rest of their revenue just fucking collapsed just as most demand side economists (including Krugman) predicted this would have happened.
They wanted Greece to do what was "morally" "right" instead of the community coming together to do was was correct.
posted by Talez at 11:36 AM on June 18, 2015 [13 favorites]
Tsipras' partner: it's me or Europe.
The Looming Austerity Package
Fighting Golden Dawn
Why the powerful are punishing Greece
posted by Noisy Pink Bubbles at 11:37 AM on June 18, 2015 [2 favorites]
The Looming Austerity Package
Fighting Golden Dawn
Why the powerful are punishing Greece
posted by Noisy Pink Bubbles at 11:37 AM on June 18, 2015 [2 favorites]
They wanted Greece to do what was "morally" "right" instead of the community coming together to do was was correct.
Which is what? Debt forgiveness? Regardless of a moral view of the situation I doubt the debt holders wants to set a precedent here. But maybe I just don't understand what the more nuanced options are.
posted by GuyZero at 11:38 AM on June 18, 2015 [1 favorite]
Which is what? Debt forgiveness? Regardless of a moral view of the situation I doubt the debt holders wants to set a precedent here. But maybe I just don't understand what the more nuanced options are.
posted by GuyZero at 11:38 AM on June 18, 2015 [1 favorite]
Instead we get this fucking triumph of American style neoliberalism.
Well, I'm not sure "American style" is really accurate, Krugman has made compelling comparisons between Greece/Spain and Florida. A big reason Florida didn't crater as hard as Greece was because of all the federal support programs that kicked in during the down turn, Social Security, unemployment insurance, etc. The same things could have happened in Greece if the Eurozone (re:Germany) was committed to its support and sucess.
The dirty secret behind the Euro is it was implemented explicitly to *force* greater political integration through economic integration. We're seeing just exactly what happens when the fantasy land political carrot lags way behind the reality of the economic stick.
posted by T.D. Strange at 11:41 AM on June 18, 2015 [21 favorites]
Well, I'm not sure "American style" is really accurate, Krugman has made compelling comparisons between Greece/Spain and Florida. A big reason Florida didn't crater as hard as Greece was because of all the federal support programs that kicked in during the down turn, Social Security, unemployment insurance, etc. The same things could have happened in Greece if the Eurozone (re:Germany) was committed to its support and sucess.
The dirty secret behind the Euro is it was implemented explicitly to *force* greater political integration through economic integration. We're seeing just exactly what happens when the fantasy land political carrot lags way behind the reality of the economic stick.
posted by T.D. Strange at 11:41 AM on June 18, 2015 [21 favorites]
I see parallels to the housing bust in the US. Greece is ready to mail in the keys, and we are getting the same tired arguments about moral obligation to pay debt. The only moral obligation here is of Greece's leadership to do whats best for his people. From my point of view getting out from under the German boot is a good start.
posted by H. Roark at 11:42 AM on June 18, 2015 [7 favorites]
posted by H. Roark at 11:42 AM on June 18, 2015 [7 favorites]
Which is what? Debt forgiveness? Regardless of a moral view of the situation I doubt the debt holders wants to set a precedent here. But maybe I just don't understand what the more nuanced options are.
The biggest thing easily would have been tolerance of deficit spending while figuring out a greater plan instead of jumping straight down the austerity rabbit hole. The Greek government needed a hell of a lot of help dealing with tax evasion. They needed to pour investment money into export related industries to get hard currency coming back into the country. Setting gradual and manageable goals of reform and rebuilding the economy instead of demanding a fucking surplus in a time of severely limited consumer demand.
posted by Talez at 11:43 AM on June 18, 2015 [20 favorites]
The biggest thing easily would have been tolerance of deficit spending while figuring out a greater plan instead of jumping straight down the austerity rabbit hole. The Greek government needed a hell of a lot of help dealing with tax evasion. They needed to pour investment money into export related industries to get hard currency coming back into the country. Setting gradual and manageable goals of reform and rebuilding the economy instead of demanding a fucking surplus in a time of severely limited consumer demand.
posted by Talez at 11:43 AM on June 18, 2015 [20 favorites]
Which is what? Debt forgiveness?
How much will they recover from Greece's upraised middle finger ?
posted by Pogo_Fuzzybutt at 11:45 AM on June 18, 2015 [9 favorites]
How much will they recover from Greece's upraised middle finger ?
posted by Pogo_Fuzzybutt at 11:45 AM on June 18, 2015 [9 favorites]
At any rate I think that this proves that you can't just take two radically different economies - Greece and Germany - and force them to share a currency and make it work.
East and West Germany merged two radically different economies not all that long ago and it turned out okay.
posted by srboisvert at 11:46 AM on June 18, 2015 [2 favorites]
East and West Germany merged two radically different economies not all that long ago and it turned out okay.
posted by srboisvert at 11:46 AM on June 18, 2015 [2 favorites]
Instead we get this fucking triumph of American style neoliberalism.
This is German-style, not American, neoliberalism. Say what you will about American neoliberals, they are demonstrably way better than this at using monetary policy to keep the economy at least barely afloat, rather than just sinking it out of spite.
posted by RogerB at 11:46 AM on June 18, 2015 [20 favorites]
This is German-style, not American, neoliberalism. Say what you will about American neoliberals, they are demonstrably way better than this at using monetary policy to keep the economy at least barely afloat, rather than just sinking it out of spite.
posted by RogerB at 11:46 AM on June 18, 2015 [20 favorites]
Oh he's not wrong. Without any external intervention it was basically bound to happen. But there were more graceful ways of attacking this problem. Germany demanded blood from the stone and Greece most certainly delivered it cutting spending hard and fast. Then the rest of their revenue just fucking collapsed just as most demand side economists (including Krugman) predicted this would have happened.
There's also the issue of tax evasion in Greece. Without so many individuals nope-ing out of paying income tax over decades, this scenario would have probably never materialized.
It sort of looks like the previous government didn't move hard or fast enough on tax evasion, but rather opted for austerity first.
But it sounds like cleaning up tax enforcement was much easier said than done based on the scale and duration of the rot within the tax collection system.
posted by mandolin conspiracy at 11:46 AM on June 18, 2015 [4 favorites]
There's also the issue of tax evasion in Greece. Without so many individuals nope-ing out of paying income tax over decades, this scenario would have probably never materialized.
It sort of looks like the previous government didn't move hard or fast enough on tax evasion, but rather opted for austerity first.
But it sounds like cleaning up tax enforcement was much easier said than done based on the scale and duration of the rot within the tax collection system.
posted by mandolin conspiracy at 11:46 AM on June 18, 2015 [4 favorites]
East and West Germany merged two radically different economies not all that long ago and it turned out okay.
Which I think strengthens the argument that monetary union without fiscal union is tenuous at best.
posted by dismas at 11:49 AM on June 18, 2015 [10 favorites]
Which I think strengthens the argument that monetary union without fiscal union is tenuous at best.
posted by dismas at 11:49 AM on June 18, 2015 [10 favorites]
How much will they recover from Greece's upraised middle finger ?
European banks were offloading their Greek bonds by the shovel load to the ECB as soon as the ECB started buying them in 2010. You think the bankers are taking a haircut on this? Please. Their exposure is maybe a third of what it was in 2009. Almost all of it has been shouldered onto the ECB.
posted by Talez at 11:54 AM on June 18, 2015 [2 favorites]
European banks were offloading their Greek bonds by the shovel load to the ECB as soon as the ECB started buying them in 2010. You think the bankers are taking a haircut on this? Please. Their exposure is maybe a third of what it was in 2009. Almost all of it has been shouldered onto the ECB.
posted by Talez at 11:54 AM on June 18, 2015 [2 favorites]
From Noisy Pink Bubble's last link:
The real problem with refinancing Greek debt, as the banker Smaghi explained, is that the Greek government wants to spend the money to revive its shattered economy. "This would entail the risk...of going back to the pre-crisis policies of rising public spending and giving up all the reforms that are needed to improve the competitiveness of the Greek economy so as to make it a lasting member of the monetary union," he wrote.posted by junco at 11:55 AM on June 18, 2015 [10 favorites]
In other words, the pressure on Greece to capitulate isn't mainly about getting creditors repaid. It's not even about preventing a Greek exit from the Eurozone--the scenario known as "Grexit"--from destabilizing the European economy. Greece, after all, represents just 2 percent of overall GDP for the European Union (EU).
Rather, the power play in Greece is to drive home the idea that there is no alternative to the neoliberal program of cutbacks in social spending, attacks on trade union rights and labor legislation, and pro-business tax policies.
Another leading indicator of Grexit: A surge of Bitcoin activity from Greek IP addresses.
posted by Cash4Lead at 11:59 AM on June 18, 2015 [1 favorite]
posted by Cash4Lead at 11:59 AM on June 18, 2015 [1 favorite]
This is German-style, not American, neoliberalism.
Germany wants Greece as a colonial possession, and they were doing pretty well using political and financial levers and with support from weak Greek leadership - until the current group of Greek leadership was sworn in earlier this year and immediately called their bluff with a solid "you and what army, Merkel?" It's not as though she can batphone Obama and request a carrier group off the coast of Athens.
posted by MillMan at 12:00 PM on June 18, 2015 [4 favorites]
Germany wants Greece as a colonial possession, and they were doing pretty well using political and financial levers and with support from weak Greek leadership - until the current group of Greek leadership was sworn in earlier this year and immediately called their bluff with a solid "you and what army, Merkel?" It's not as though she can batphone Obama and request a carrier group off the coast of Athens.
posted by MillMan at 12:00 PM on June 18, 2015 [4 favorites]
They wanted Greece to do what was "morally" "right" instead of the community coming together to do was was correct.
Great point: "Never let your sense of morals stop you from doing what's right." Salvor Hardin. (Isaac Asimov)
posted by JKevinKing at 12:01 PM on June 18, 2015 [3 favorites]
Great point: "Never let your sense of morals stop you from doing what's right." Salvor Hardin. (Isaac Asimov)
posted by JKevinKing at 12:01 PM on June 18, 2015 [3 favorites]
With the way the EU usually works, this appears to be heading for Grexit ... they are building firebreaks and talking Plans B and trying to calm the markets rather than baking fudge. They are also taking a long time rather than jamming through a deal over a weekend. The bailout talks just failed and now the EU has called an emergency meeting of government leaders for ... Monday. If they were seriously working on keeping it all together they would get it done before Monday start of trade. The big question (as a resident of a peripheral, just-through-a-bailout country) is what happens next, once the seal is broken and it becomes possible to leave the euro (something which the EU has long painted as "impossible" -- legally, politically, financially &c.)?
posted by chavenet at 12:08 PM on June 18, 2015
posted by chavenet at 12:08 PM on June 18, 2015
You think the bankers are taking a haircut on this? Please. Their exposure is maybe a third of what it was in 2009. Almost all of it has been shouldered onto the ECB.
The banksters never lose. But really, the ECB can cut a deal to eat a small loss, or they can call Greece's bluff and eat it all.
posted by Pogo_Fuzzybutt at 12:10 PM on June 18, 2015
The banksters never lose. But really, the ECB can cut a deal to eat a small loss, or they can call Greece's bluff and eat it all.
posted by Pogo_Fuzzybutt at 12:10 PM on June 18, 2015
Why Greece might now have the upper hand in crunch talks , from the Guardian. Featuring a notable closing line.
posted by George_Spiggott at 12:10 PM on June 18, 2015 [1 favorite]
posted by George_Spiggott at 12:10 PM on June 18, 2015 [1 favorite]
When you owe the bank $10,000 and you can't pay, you have a problem. When you owe the bank $10,000,000 and you can't pay, the bank has a problem.
posted by rustcrumb at 12:21 PM on June 18, 2015 [4 favorites]
posted by rustcrumb at 12:21 PM on June 18, 2015 [4 favorites]
When you owe the bank $10,000,000 and you can't pay, the bank has a problem.
Not any mid-size modern bank. $10 million is a rounding error, or an investment banker's commission.
In Greece's case the point is fair though: Greece owes more than $350 billion to its creditors.
posted by chavenet at 12:26 PM on June 18, 2015
Not any mid-size modern bank. $10 million is a rounding error, or an investment banker's commission.
In Greece's case the point is fair though: Greece owes more than $350 billion to its creditors.
posted by chavenet at 12:26 PM on June 18, 2015
They wanted Greece to do what was "morally" "right" instead of the community coming together to do was was correct.Which is what? Debt forgiveness? Regardless of a moral view of the situation I doubt the debt holders wants to set a precedent here.
A large part of the justification for paying interest above the expected rate of inflation is to compensate for the risk of default. If you engineer away any risk of default then the much of the moral justification for charging Greece a higher interest rate than Germany goes away. You can’t use an argument about morality that applies only to the debtor but not to the creditor and still be taken seriously.
A sensible negotiated settlement would be far better for everyone than default, whatever the “morality", but little of this is about sense or "austerity now and forever” would never have been European policy.
posted by Quinbus Flestrin at 12:38 PM on June 18, 2015 [8 favorites]
For those who aren't following the distinction between monetary union and fiscal union, consider the example of Florida, as outlined by Krugman.
Florida had a massive property bubble (with Jeb! at the helm) and when the bubble popped, they should have had a full-on depression. Instead, the rest of the states that share a currency with Florida pooled their resources and provided transfer payments to support Florida - more familiar as Social Security, Medicare, etc. payments from the US Federal government. And so Florida’s growth rate over the past 16 years is 1.7 percent, only slightly below the national average. It isn't growing very much, but the contrast with Greece should be obvious.
(In general, if this stuff interests you and you aren't following Krugman's blog, you're missing out.)
posted by RedOrGreen at 12:46 PM on June 18, 2015 [7 favorites]
Florida had a massive property bubble (with Jeb! at the helm) and when the bubble popped, they should have had a full-on depression. Instead, the rest of the states that share a currency with Florida pooled their resources and provided transfer payments to support Florida - more familiar as Social Security, Medicare, etc. payments from the US Federal government. And so Florida’s growth rate over the past 16 years is 1.7 percent, only slightly below the national average. It isn't growing very much, but the contrast with Greece should be obvious.
(In general, if this stuff interests you and you aren't following Krugman's blog, you're missing out.)
posted by RedOrGreen at 12:46 PM on June 18, 2015 [7 favorites]
It's not as though she can batphone Obama
She doesn't need to, he listens in to all her calls anyway.
posted by Segundus at 12:50 PM on June 18, 2015 [27 favorites]
She doesn't need to, he listens in to all her calls anyway.
posted by Segundus at 12:50 PM on June 18, 2015 [27 favorites]
This is German-style, not American, neoliberalism. Say what you will about American neoliberals, they are demonstrably way better than this at using monetary policy to keep the economy at least barely afloat, rather than just sinking it out of spite.
The parallels with the Versailles reparations imposed on Germany after World War I are especially resonant here, including Keynes' unheeded warnings of possible consequences in The Economic Consequences of the Peace. Both the economic provisos of the Treaty of Versailles and the Eurozone's demands on Greece seem to have been motivated by the punitive desire to inflict suffering on an entire country in order to "teach somebody a lesson," even though the lesson isn't exactly clear and the consequences are almost certainly going to be counterproductive. Let us hope that there won't be any historical parallels that lead to the Golden Dawn coming to power. (Or, alternatively, a collapse of the world economy before the U.S. 2016 election that leads to a President Scott Walker regime that makes Ronald Reagan look like George McGovern.)
posted by jonp72 at 12:51 PM on June 18, 2015 [11 favorites]
The parallels with the Versailles reparations imposed on Germany after World War I are especially resonant here, including Keynes' unheeded warnings of possible consequences in The Economic Consequences of the Peace. Both the economic provisos of the Treaty of Versailles and the Eurozone's demands on Greece seem to have been motivated by the punitive desire to inflict suffering on an entire country in order to "teach somebody a lesson," even though the lesson isn't exactly clear and the consequences are almost certainly going to be counterproductive. Let us hope that there won't be any historical parallels that lead to the Golden Dawn coming to power. (Or, alternatively, a collapse of the world economy before the U.S. 2016 election that leads to a President Scott Walker regime that makes Ronald Reagan look like George McGovern.)
posted by jonp72 at 12:51 PM on June 18, 2015 [11 favorites]
If only the people running Greece had some warning and saw this coming. Oh wait, they did, and did nothing. And then the other yahoos got elected and they just made it worse. Not that the EU's side of handling this crisis has been much better.
posted by Nelson at 12:54 PM on June 18, 2015 [2 favorites]
posted by Nelson at 12:54 PM on June 18, 2015 [2 favorites]
-The Greek standoff is no Prisoner’s dilemma
-Neither Greeks nor their partners should imagine a clean break if they leave the euro
-Merkel 'still convinced' Greek debt deal possible
-Greek showdown widens Merkel’s rift with Schäuble
"And for what? For a little bit of money."
and for comaprison's sake:
-Neither Greeks nor their partners should imagine a clean break if they leave the euro
-Merkel 'still convinced' Greek debt deal possible
-Greek showdown widens Merkel’s rift with Schäuble
"And for what? For a little bit of money."
and for comaprison's sake:
- IMF to Ukraine: take the red pill - "read this IMF statement on Ukraine’s debt restructuring. As Barnejek tweeted, it’s financial history in the making... Translation: Dear Ukraine, if you can’t get an agreement with your bondholders, stop paying them if you need to. We’ll lend you the money to tide you over. We don’t want to lend you money just to let them get paid on our dime. We suggest bondholders read the manual."
- The miraculous story of Iceland - "the biggest difference between the two is that Iceland has its own currency and Ireland has the euro..."
> Rather, the power play in Greece is to drive home the idea that there is no alternative to the neoliberal program of cutbacks in social spending, attacks on trade union rights and labor legislation, and pro-business tax policies.
I'm not typically a huge fan of ISO1, but this statement from the ISO thinkpiece linked above pretty much sums it up. If you think of the troika's goal as being to reform Greece so that they're a full participant in the EU or whatever, they're being idiots. If you think of the troika's goal as making an example of Greece so that other countries are too scared to step out of line, they're playing very, very well.
> If only the people running Greece had some warning and saw this coming. Oh wait, they did, and did nothing. And then the other yahoos got elected and they just made it worse. Not that the EU's side of handling this crisis has been much better.
Syriza is, on the whole, a pretty smart organization. Their only mistake, if they've made any mistake at all, is thinking that the powers that be would allow a left government in a small and struggling country to actually reform that country in ways that could help it thrive (i.e. repairing the social safety net, honoring pension obligations, and so forth). This cannot happen without nasty struggle, because the economies of the center depend upon keeping the economies of the periphery broken and corrupt, and Greece, despite its EU member status, is in global economic terms a periphery country.
Which is to say, I don't think either side is being idiotic. One side is being repugnant, one side is being possibly a bit naïve, but no one is being idiotic.
1: Well, okay: I like most of the ISO people I know, and really respect their political activity outside of ISO... or rather, I like them and respect them when they're not selling ISO and when they're not using political activity in other groups as a vehicle to promote ISO. That is all neither here nor there, though.
posted by You Can't Tip a Buick at 1:11 PM on June 18, 2015 [5 favorites]
I'm not typically a huge fan of ISO1, but this statement from the ISO thinkpiece linked above pretty much sums it up. If you think of the troika's goal as being to reform Greece so that they're a full participant in the EU or whatever, they're being idiots. If you think of the troika's goal as making an example of Greece so that other countries are too scared to step out of line, they're playing very, very well.
> If only the people running Greece had some warning and saw this coming. Oh wait, they did, and did nothing. And then the other yahoos got elected and they just made it worse. Not that the EU's side of handling this crisis has been much better.
Syriza is, on the whole, a pretty smart organization. Their only mistake, if they've made any mistake at all, is thinking that the powers that be would allow a left government in a small and struggling country to actually reform that country in ways that could help it thrive (i.e. repairing the social safety net, honoring pension obligations, and so forth). This cannot happen without nasty struggle, because the economies of the center depend upon keeping the economies of the periphery broken and corrupt, and Greece, despite its EU member status, is in global economic terms a periphery country.
Which is to say, I don't think either side is being idiotic. One side is being repugnant, one side is being possibly a bit naïve, but no one is being idiotic.
1: Well, okay: I like most of the ISO people I know, and really respect their political activity outside of ISO... or rather, I like them and respect them when they're not selling ISO and when they're not using political activity in other groups as a vehicle to promote ISO. That is all neither here nor there, though.
posted by You Can't Tip a Buick at 1:11 PM on June 18, 2015 [5 favorites]
Christine Lagarde, managing director of the International Monetary Fund said the summit was necessary "to restore a dialogue with adults in the room." (From the WSJ)
posted by chavenet at 1:22 PM on June 18, 2015
posted by chavenet at 1:22 PM on June 18, 2015
I guess the tl;dr is that Greece is the first of the periphery countries to try to storm the barricades, and they're getting cut to shreds (because that's what happens to shock troops). It's an open question whether anyone else will follow them over the barricades; the troika's trying to dissuade everyone else by being Game of Thrones-caliber sadistic in their dismantlement of Greece.
posted by You Can't Tip a Buick at 1:23 PM on June 18, 2015 [4 favorites]
posted by You Can't Tip a Buick at 1:23 PM on June 18, 2015 [4 favorites]
This cannot happen without nasty struggle, because the economies of the center depend upon keeping the economies of the periphery broken and corrupt, and Greece, despite its EU member status, is in global economic terms a periphery country.
I've heard mutterings that the Tories are over the moon, as they see Greece as a way to drive some pretty big wedges into the Eurozone and the EU in general. It would not be the first time they've propped up a "periphery" nation to undermine the big Continental powers. (Russia would love to step in to bring another European client into its orbit, but they're busy going broke re-fighting the Cold War.)
posted by Slap*Happy at 1:25 PM on June 18, 2015 [1 favorite]
I've heard mutterings that the Tories are over the moon, as they see Greece as a way to drive some pretty big wedges into the Eurozone and the EU in general. It would not be the first time they've propped up a "periphery" nation to undermine the big Continental powers. (Russia would love to step in to bring another European client into its orbit, but they're busy going broke re-fighting the Cold War.)
posted by Slap*Happy at 1:25 PM on June 18, 2015 [1 favorite]
A pound of flesh. That is all this is. They (people who "control" the financial political systems) will not stop until everyone but themselves has been hacked to easily digestible and excretable bits.
posted by nikoniko at 1:27 PM on June 18, 2015
posted by nikoniko at 1:27 PM on June 18, 2015
It's easy to say today how this was a bad idea to begin with. Setting that aside, since we are here already, I think there is a fair amount of blame to be placed at Syriza's doorstep. It's one thing to ask for dignity and better terms on the debt but it's a complete different ballgame to go ask for reparations for Nazi crimes and trying to pull amateurish tricks like cozying up to Putin.
I refuse to believe that there are no solutions left. As long as Tsipras behaves like an obstinate child, there is nothing even well meaning European leaders can do to help the average Greeks. Is it not better for the pensioners that Syriza is ostensibly fighting for to remain in the EZ and get a reduced pension rather than face a death spiral of an Argentina or Zimbabwe? They conveniently leave out the fact that it's not Merkel or Lagarde single handedly making these decisions. Tsipras thinks his mandate is holy but don't the Finance ministers of other governments have to respect their mandates too?
Besides, how can anyone say that the woes of Greek pensioners are worse than the ones in Portugal and Spain, let alone the poorer constituents?
posted by savitarka at 1:32 PM on June 18, 2015 [6 favorites]
I refuse to believe that there are no solutions left. As long as Tsipras behaves like an obstinate child, there is nothing even well meaning European leaders can do to help the average Greeks. Is it not better for the pensioners that Syriza is ostensibly fighting for to remain in the EZ and get a reduced pension rather than face a death spiral of an Argentina or Zimbabwe? They conveniently leave out the fact that it's not Merkel or Lagarde single handedly making these decisions. Tsipras thinks his mandate is holy but don't the Finance ministers of other governments have to respect their mandates too?
Besides, how can anyone say that the woes of Greek pensioners are worse than the ones in Portugal and Spain, let alone the poorer constituents?
posted by savitarka at 1:32 PM on June 18, 2015 [6 favorites]
Before people get totally swept away in the "political posturing qua warning to other countries" argument, it should be pointed out, to Americans at least, that Greece is not a typical Western economy and, as an uncooperative welfare state, has refused basic reform throughout. This includes refusing to privatize utilities, which are all state-run and run on a deficit, and instituting layoffs.
So that when you are talking about a country that "rejects austerity," it's not that simple. A good anecdote, if yu are not already familiar with it, is the fact that the Greek Finance Ministry at one point employed 600 cleaning ladies, and the Greeks were very fired up about keeping these people in the workforce.
That despite all this, the Greeks have a standard of living that is far, far better than it was 30 years ago. Home ownership in Greece is higher than it is in Germany, and nobody's working. Whether you agree with this or not I suppose is irrelevant, but the Greeks have lived off the generosity of Europe well before the EU ever happened, and they will most likely continue to need to, if they don't reform their political institutions (which they won't) and especially if they go back to the drachma.
posted by phaedon at 1:36 PM on June 18, 2015 [7 favorites]
So that when you are talking about a country that "rejects austerity," it's not that simple. A good anecdote, if yu are not already familiar with it, is the fact that the Greek Finance Ministry at one point employed 600 cleaning ladies, and the Greeks were very fired up about keeping these people in the workforce.
That despite all this, the Greeks have a standard of living that is far, far better than it was 30 years ago. Home ownership in Greece is higher than it is in Germany, and nobody's working. Whether you agree with this or not I suppose is irrelevant, but the Greeks have lived off the generosity of Europe well before the EU ever happened, and they will most likely continue to need to, if they don't reform their political institutions (which they won't) and especially if they go back to the drachma.
posted by phaedon at 1:36 PM on June 18, 2015 [7 favorites]
Looks like a sucessful full employment program.
posted by T.D. Strange at 1:42 PM on June 18, 2015 [1 favorite]
posted by T.D. Strange at 1:42 PM on June 18, 2015 [1 favorite]
I've heard mutterings that the Tories are over the moon, as they see Greece as a way to drive some pretty big wedges into the Eurozone and the EU in general.
OTOH wouldn't it serve the Tory narrative if Greece swallowed the austerity line? It must be a hell of a dilemma, deciding what they want to see fail more: the EU or the last vestige of socialism. But then there's really not a lot of down side for them either way.
posted by George_Spiggott at 1:46 PM on June 18, 2015
OTOH wouldn't it serve the Tory narrative if Greece swallowed the austerity line? It must be a hell of a dilemma, deciding what they want to see fail more: the EU or the last vestige of socialism. But then there's really not a lot of down side for them either way.
posted by George_Spiggott at 1:46 PM on June 18, 2015
The running joke around here is this:
"... and what time is it in Greece?"
"Oh, it's still five minutes to twelve..."
posted by sour cream at 2:00 PM on June 18, 2015 [1 favorite]
"... and what time is it in Greece?"
"Oh, it's still five minutes to twelve..."
posted by sour cream at 2:00 PM on June 18, 2015 [1 favorite]
The thing is that if creditors had restructured the debt years ago, the pain to peripheral Europe would have been much less and they could have grown their way out of the crisis. A number of economists have been saying for years that peripheral Europe's exit from the euro is inevitable only so long as creditors refuse to forgive debt.
Michael Pettis, a renowned economist on whom I have an econo-crush, writes in his 2014 book, The Great Rebalancing:
"Without a strong form of fiscal union or a reversal of German trade surpluses, much of peripheral Europe will be forced to abandon the euro and to restructure its debt. The problem facing Spain, Portugal, Italy, Greece, Ireland, and the rest of peripheral Europe is not lack of liquidity but rather a lack of competivity caused by the huge divergence in costs over the past decade. One way of regaining competivity is to force wages and price down over many years of very high unemployment. Because, fortunately, this strategy is not compatible with democratic rule, these countries will eventually choose the only practical other way -- to intervene in trade, which probably means to abandon the euro and devalue. Of course this will also mean debt restructuring and debt forgiveness given that their already-excessive debt is denominated in what will be a rising currency.
[...] Ultimately these countries will have to leave the euro. There is no question that abandoning the euro will be more painful because the financial distress process will itself ensure that over the next few years businesses will disinvest, workers will become radicalized, savers will flee, and the political structure will become less stable."
posted by Atrahasis at 2:17 PM on June 18, 2015 [3 favorites]
Michael Pettis, a renowned economist on whom I have an econo-crush, writes in his 2014 book, The Great Rebalancing:
"Without a strong form of fiscal union or a reversal of German trade surpluses, much of peripheral Europe will be forced to abandon the euro and to restructure its debt. The problem facing Spain, Portugal, Italy, Greece, Ireland, and the rest of peripheral Europe is not lack of liquidity but rather a lack of competivity caused by the huge divergence in costs over the past decade. One way of regaining competivity is to force wages and price down over many years of very high unemployment. Because, fortunately, this strategy is not compatible with democratic rule, these countries will eventually choose the only practical other way -- to intervene in trade, which probably means to abandon the euro and devalue. Of course this will also mean debt restructuring and debt forgiveness given that their already-excessive debt is denominated in what will be a rising currency.
[...] Ultimately these countries will have to leave the euro. There is no question that abandoning the euro will be more painful because the financial distress process will itself ensure that over the next few years businesses will disinvest, workers will become radicalized, savers will flee, and the political structure will become less stable."
posted by Atrahasis at 2:17 PM on June 18, 2015 [3 favorites]
Hi from Greece. I'd enjoy the news stories and analyses rather more if they were abstract, but these days will make or break plenty of us here.
A few quick points:
Our current government was overtly optimistic. Their economic plan depended too much on the creditors' assent and though Greece could sorely do with strengthening demand, this can't be done by the government due to massive debt and lack of financing. That optimism is a black mark since the "good" current scenarios are worse than what the same politicians called catastrophic before the elections. Keep in mind though that our creditors are mostly interested in kicking the can down the road, as they have done since the beginning of the crisis, rather than in solving the matter.
There's a lot of talk about moral hazard and obligations, but one side is less often noted. The bailout of Greece was to a great extent a bailout of ill-regulated European banks because it's easier to chastise corrupt, easy-going Greeks than to go to voters and tell them they have to pay for the bad investment decisions of domestic (German etc) banks. Greece has been a great purchaser of European consumer goods and arms since at least 2002. Public works and arms deals exacerbated corruption in the country (cf. Siemens bribing scandal, and the jostling of our partners to earn defensive contracts while Greece was receiving low-rate loans). It's all but covert financing of foreign defensive industries and even better, it circumvented European prohibition against subsidies.
Greece could do a lot of things better. Structural reforms like monitoring VAT and insurance obligations, digitalisation and interconnection of the government and semi-governmental companies & institutions, greater rule of law and faster trials. Severely restricting early pensions and making up for the money funds lost during debt restructuring. Deregulating employee protections won't do anything in a country with massive unemployment.
Now keep in mind that Greece also has tax avoidance as most other countries, but two thirds of Greeks are taxed at source. Salaried employees and pensioners see their earnings filled in when they log on to file for tax, VAT stands at 23% and people who receive payments have to prepay half the budgeted tax for next year and, usually, a 20% that gets deducted whenever someone pays them. And these people, us, have borne the greater burden of turning a 15,6% deficit to ~-3% or a small primary surplus. Add to that a 25% reduction of income to see the massive extent of economic turn-around (and destruction).
We suffer from having serious politicians scattered in various parties who often out-shouted by people who cannot rise to the occasion. I can understand why some of our partners are aggravated because a lot of us are too. Remember though that European mechanisms also failed in their supervisory role and our partners have consistently kicked the can down the road instead of facing the truth and dealing with the crisis in a concerted way. Remember when the ESM was out of the question and EB would never buy bonds or use QE? If Greece had a show of support against speculators in the beginning, low rates and/or a haircut from the first loan rather than the second one, so much pain would have been averted and Europe would have been stronger.
An exit is plain catastrophic. Greece will see a repeat of the last five years only in fast forward: incomes hurt massively, external debt that will likely persist to some degree (Argentina is still in talks about paying off part of their debt), loss of confidence, an even more severe humanitarian crisis and, likely, the reemergence of authoritarian strains as people cling to straws. A demand-driven economy can't become an export-driven one under such conditions.
An exit will be catastrophic for Europe too. The European ideal will receive a severe blow at the same time Cameron and a series of Euro-deniers wait for blood (Front National, Lega Nord, AfD etc) and even though officials claim Greece is walled off, we're still talking about the same people that failed to manage a crisis in a country with 1-2% of Euro-GDP. What will happen next time Spain or Italy stumble? Europe can't afford shocks in its economy.
Home ownership in Greece is higher than it is in Germany, and nobody's working.
Houses are not that expensive in Greece due to high supply and limited demand since most people are already owners or have the option of living with family. It takes some gall to claim "nobody's working" with unemployment of 26% and massive emigration. Those of us who work, work the most hours in Europe according to OECD and tend to do quite well abroad.
For me, the best current scenario would be an agreement without a rise of VAT for energy that would get rolled over to every other product, the extension of ECB's programme to Greece so companies don't have to pay everything upfront, a smart reevaluation of the pension system in the fall and tending to the debt after maintaining a surplus according to the provisions of the 2012 agreement. A lot of this discussion is about economics, but even more important for my generation everyone has travelled in Europe and everyone has friends or relatives living abroad. Europe is our home.
posted by ersatz at 2:45 PM on June 18, 2015 [58 favorites]
A few quick points:
Our current government was overtly optimistic. Their economic plan depended too much on the creditors' assent and though Greece could sorely do with strengthening demand, this can't be done by the government due to massive debt and lack of financing. That optimism is a black mark since the "good" current scenarios are worse than what the same politicians called catastrophic before the elections. Keep in mind though that our creditors are mostly interested in kicking the can down the road, as they have done since the beginning of the crisis, rather than in solving the matter.
There's a lot of talk about moral hazard and obligations, but one side is less often noted. The bailout of Greece was to a great extent a bailout of ill-regulated European banks because it's easier to chastise corrupt, easy-going Greeks than to go to voters and tell them they have to pay for the bad investment decisions of domestic (German etc) banks. Greece has been a great purchaser of European consumer goods and arms since at least 2002. Public works and arms deals exacerbated corruption in the country (cf. Siemens bribing scandal, and the jostling of our partners to earn defensive contracts while Greece was receiving low-rate loans). It's all but covert financing of foreign defensive industries and even better, it circumvented European prohibition against subsidies.
Greece could do a lot of things better. Structural reforms like monitoring VAT and insurance obligations, digitalisation and interconnection of the government and semi-governmental companies & institutions, greater rule of law and faster trials. Severely restricting early pensions and making up for the money funds lost during debt restructuring. Deregulating employee protections won't do anything in a country with massive unemployment.
Now keep in mind that Greece also has tax avoidance as most other countries, but two thirds of Greeks are taxed at source. Salaried employees and pensioners see their earnings filled in when they log on to file for tax, VAT stands at 23% and people who receive payments have to prepay half the budgeted tax for next year and, usually, a 20% that gets deducted whenever someone pays them. And these people, us, have borne the greater burden of turning a 15,6% deficit to ~-3% or a small primary surplus. Add to that a 25% reduction of income to see the massive extent of economic turn-around (and destruction).
We suffer from having serious politicians scattered in various parties who often out-shouted by people who cannot rise to the occasion. I can understand why some of our partners are aggravated because a lot of us are too. Remember though that European mechanisms also failed in their supervisory role and our partners have consistently kicked the can down the road instead of facing the truth and dealing with the crisis in a concerted way. Remember when the ESM was out of the question and EB would never buy bonds or use QE? If Greece had a show of support against speculators in the beginning, low rates and/or a haircut from the first loan rather than the second one, so much pain would have been averted and Europe would have been stronger.
An exit is plain catastrophic. Greece will see a repeat of the last five years only in fast forward: incomes hurt massively, external debt that will likely persist to some degree (Argentina is still in talks about paying off part of their debt), loss of confidence, an even more severe humanitarian crisis and, likely, the reemergence of authoritarian strains as people cling to straws. A demand-driven economy can't become an export-driven one under such conditions.
An exit will be catastrophic for Europe too. The European ideal will receive a severe blow at the same time Cameron and a series of Euro-deniers wait for blood (Front National, Lega Nord, AfD etc) and even though officials claim Greece is walled off, we're still talking about the same people that failed to manage a crisis in a country with 1-2% of Euro-GDP. What will happen next time Spain or Italy stumble? Europe can't afford shocks in its economy.
Home ownership in Greece is higher than it is in Germany, and nobody's working.
Houses are not that expensive in Greece due to high supply and limited demand since most people are already owners or have the option of living with family. It takes some gall to claim "nobody's working" with unemployment of 26% and massive emigration. Those of us who work, work the most hours in Europe according to OECD and tend to do quite well abroad.
For me, the best current scenario would be an agreement without a rise of VAT for energy that would get rolled over to every other product, the extension of ECB's programme to Greece so companies don't have to pay everything upfront, a smart reevaluation of the pension system in the fall and tending to the debt after maintaining a surplus according to the provisions of the 2012 agreement. A lot of this discussion is about economics, but even more important for my generation everyone has travelled in Europe and everyone has friends or relatives living abroad. Europe is our home.
posted by ersatz at 2:45 PM on June 18, 2015 [58 favorites]
I'm no macroeconomist but floating exchange rates are exactly what is supposed to help fix this kind of issue right?
If the debt isn't denominated in your own currency; then you are even more screwed by the collapse of your exchange rate.
The fact that the Europeans can't figure out a way to handle the bankruptcy of one of their member states is a fairly big problem for the long term viability of the union. What happens when a larger european nation runs into similar problems?
posted by humanfont at 2:48 PM on June 18, 2015 [2 favorites]
If the debt isn't denominated in your own currency; then you are even more screwed by the collapse of your exchange rate.
The fact that the Europeans can't figure out a way to handle the bankruptcy of one of their member states is a fairly big problem for the long term viability of the union. What happens when a larger european nation runs into similar problems?
posted by humanfont at 2:48 PM on June 18, 2015 [2 favorites]
The fact that the Europeans can't figure out a way to handle the bankruptcy of one of their member states is a fairly big problem for the long term viability of the union. What happens when a larger european nation runs into similar problems?
Ah, the glorious nation state and its problems.
WELL......regular good old-fashioned war is a great stimulus mechanism. Lots of things to (forcibly, if need be) manufacture, contracts don't mean quite so much if you've bombed counterparties, privation more accepted by the bulk of the populace, some nice jingoistic rabble rousing etc. etc. etc.
Of course, that's what the EU was set up to avoid, and all this talk of economic inefficiency and some poor banksters taking a haircut on their investments bothers me not one jot in comparison with the consequences of the failure of the European Project.
posted by lalochezia at 4:01 PM on June 18, 2015 [2 favorites]
This is all about a German morality play. They are convinced that lazy Southern Europeans who never work are sucking dry the industrious Northern Europeans. This is in spite of the fact that Greeks were working almost as much as Germans before the recession, and other SE countries worked more than Germans. This is fuck you I got mine ism, just like we see with Republicans in the U.S.
The NEs never seem to notice that this crisis wasn't the result of overspending. SE countries weren't running huge deficits before 2008. Greece's was slightly high. This was entirely about a housing bubble, inflated by largely German banks, that burst. That's what happened. But the hard-working NEs (really Germans) are just *certain* it's those lazy welfare mooches down south. You'd think given their history that they'd be a bit more understanding in European affairs.
posted by persona au gratin at 4:05 PM on June 18, 2015 [6 favorites]
The NEs never seem to notice that this crisis wasn't the result of overspending. SE countries weren't running huge deficits before 2008. Greece's was slightly high. This was entirely about a housing bubble, inflated by largely German banks, that burst. That's what happened. But the hard-working NEs (really Germans) are just *certain* it's those lazy welfare mooches down south. You'd think given their history that they'd be a bit more understanding in European affairs.
posted by persona au gratin at 4:05 PM on June 18, 2015 [6 favorites]
Let me also say that the austerity forced on Southern European countries has caused Great Depression conditions there. This is what would have happened in Florida and Nevada if places like CA and NY didn't transfer tons of money to them. This didn't have to happen in Greece or Spain, either. Large transfer payments with gradual structural reforms could have avoided both the depression conditions and the Greek euro exit.
posted by persona au gratin at 4:11 PM on June 18, 2015 [3 favorites]
posted by persona au gratin at 4:11 PM on June 18, 2015 [3 favorites]
I am not exactly sure what transfer payments NY and Cali made to support Florida that should be a precedent for Greece in the Euro. Cali had its own vast subprime / foreclosure mess and without the bank bailouts New York would have been in a hell of a jam.
posted by MattD at 5:36 PM on June 18, 2015
posted by MattD at 5:36 PM on June 18, 2015
I am not exactly sure what transfer payments NY and Cali made to support Florida that should be a precedent for Greece in the Euro. Cali had its own vast subprime / foreclosure mess and without the bank bailouts New York would have been in a hell of a jam.
Cali and New York are both states which remit more in federal taxes than they receive back through federal spending programs. They also take in more state taxes than southern states which have a far higher percentage of federal grants as state revenue.
posted by Talez at 6:03 PM on June 18, 2015 [6 favorites]
Cali and New York are both states which remit more in federal taxes than they receive back through federal spending programs. They also take in more state taxes than southern states which have a far higher percentage of federal grants as state revenue.
posted by Talez at 6:03 PM on June 18, 2015 [6 favorites]
You can’t use an argument about morality that applies only to the debtor but not to the creditor and still be taken seriously.
Sure you can! Remember when people were howling and screaming in rage at Americans who were surrendering their homes and walking away from their underwater mortgages? To many having money is the only morality in this world.
posted by Pope Guilty at 6:07 PM on June 18, 2015 [5 favorites]
Sure you can! Remember when people were howling and screaming in rage at Americans who were surrendering their homes and walking away from their underwater mortgages? To many having money is the only morality in this world.
posted by Pope Guilty at 6:07 PM on June 18, 2015 [5 favorites]
Keep in mind that the requirements of political theater mean that these negotiations have to go down to the wire and appear on the brink of disaster. In doing so the politicians can limit the critics who would otherwise say you should have negotiated harder.
posted by humanfont at 8:48 PM on June 18, 2015 [1 favorite]
posted by humanfont at 8:48 PM on June 18, 2015 [1 favorite]
So the Greek debt crisis is roughly the EU equivalent of the debt ceiling in the US?
posted by T.D. Strange at 9:18 PM on June 18, 2015
posted by T.D. Strange at 9:18 PM on June 18, 2015
So the Greek debt crisis is roughly the EU equivalent of the debt ceiling in the US?
See also: Fiscal cliff.
posted by mandolin conspiracy at 9:22 PM on June 18, 2015
See also: Fiscal cliff.
posted by mandolin conspiracy at 9:22 PM on June 18, 2015
To many having money is the only morality in this world.
I think it’s more a case of them judging the morality by the existence of a profit; sort of a special case of the end justifying the means. But it only works if enough people buy into their delusion.
posted by Quinbus Flestrin at 9:50 PM on June 18, 2015
I think it’s more a case of them judging the morality by the existence of a profit; sort of a special case of the end justifying the means. But it only works if enough people buy into their delusion.
posted by Quinbus Flestrin at 9:50 PM on June 18, 2015
It is true that some of the money to FL was deficit spending.
posted by persona au gratin at 10:13 PM on June 18, 2015
posted by persona au gratin at 10:13 PM on June 18, 2015
The Eurozone’s cover-up over Greece
They are convinced that lazy Southern Europeans who never work are sucking dry the industrious Northern Europeans.
Greeks work harder than Germans. Who knew? (more recent data)
posted by kliuless at 10:52 PM on June 18, 2015 [6 favorites]
Whenever I write about Greece, a large proportion of comments (maybe not a majority) could be summarised as follows: how can you side with Greece when its economy is so inefficient and its governments so inept and after everything we have done for them. I have no illusions about the inefficiencies and corruption endemic within the Greek economy. Nor do I want to become an apologist for any Greek government.also btw...
What does seem to me very misguided is the idea that European policymakers have already been generous towards Greece. The general belief is that had they not stepped in austerity in Greece would have been far worse. This seems simply wrong. If European policymakers have been generous to anyone, it is the Greek government’s original creditors, which include the banks of various European and other countries.
- The economic consequences of austerity - "There was an odd confusion in policy thinking between the real need for institutional reform in Europe and the imagined need for austerity – two quite different things. There can be little doubt that Europe has needed, for quite some time, many serious institutional reforms – from the avoidance of tax evasion and the fixing of more reasonable retiring ages to sensible working hours and the elimination of institutional rigidities, including those in the labour markets. But the real (and strong) case for institutional reform has to be distinguished from an imagined case for indiscriminate austerity, which does not do anything to change a system while hugely inflicting pain."
- Austerity as a Knowledge Transmission Mechanism failure - "The story I like to use about the Great Recession is that it exposed an Achilles’ heel with the consensus assignment that helped give us the Great Moderation. Yes, it was best to leave monetary policy to independent central banks, but the Achilles’ heel is that this would not work if interest rates hit their lower bound. In that situation fiscal policy had to come in as a backup for monetary policy. But if the analysis above is right the creation of independent central banks may have helped make that backup process much more difficult to achieve. By concentrating macroeconomic received wisdom in institutions that were predisposed to worry far too much about budget deficits, a huge spanner was thrown into the (socially efficient) working of the knowledge transmission mechanism."
- Why helicopter money is a political economy issue - "From a macroeconomic point of view, there is an obvious way around this deficit obsession, and that is to finance any fiscal stimulus using money rather than debt. In a recession creating money does not create an inflation problem, as we have all seen in the last few years with Quantitative Easing (QE). The problem with this textbook solution (often called money financed fiscal stimulus) is that we have ruled it out by creating independent central banks. Governments cannot create money to finance fiscal stimulus. Central banks are creating money - lots of it - but can only use that to buy assets. Whatever political economy problem independent central banks have helped to solve, they have restricted our policy options in what has turned out to be a very serious way."
They are convinced that lazy Southern Europeans who never work are sucking dry the industrious Northern Europeans.
Greeks work harder than Germans. Who knew? (more recent data)
posted by kliuless at 10:52 PM on June 18, 2015 [6 favorites]
the Greek Finance Ministry at one point employed 600 cleaning ladies, and the Greeks were very fired up about keeping these people in the workforce.
What's the point here? I suspect 'cleaning ladies' includes the catering staff as well and a big government office employs thousands of people so needs a large premises... It's not like the Finance Ministry dudes in suits were going to get out toilet brushes and clean their own skid marks off. The sacked 600 cleaners who enjoyed decent jobs and fair-ish wages would have just been replaced in due course with poor black immigrant agency staff on lower wages and so perpetuating the austerity race to the bottom, the same way offices in the UK get cleaned now.
And of course workers resisting this just get put into 'anecdotes' like this which are meant to automatically illustrate how Greece 'had to reform', blah.
posted by colie at 11:53 PM on June 18, 2015 [6 favorites]
What's the point here? I suspect 'cleaning ladies' includes the catering staff as well and a big government office employs thousands of people so needs a large premises... It's not like the Finance Ministry dudes in suits were going to get out toilet brushes and clean their own skid marks off. The sacked 600 cleaners who enjoyed decent jobs and fair-ish wages would have just been replaced in due course with poor black immigrant agency staff on lower wages and so perpetuating the austerity race to the bottom, the same way offices in the UK get cleaned now.
And of course workers resisting this just get put into 'anecdotes' like this which are meant to automatically illustrate how Greece 'had to reform', blah.
posted by colie at 11:53 PM on June 18, 2015 [6 favorites]
Any discussion of the European Greek Debt Crisis that doesn't include any mention of how Goldman Sachs basically helped Greece lie its way into the Euro Zone isn't a fully-rounded discussion.
posted by hippybear at 12:42 AM on June 19, 2015 [8 favorites]
posted by hippybear at 12:42 AM on June 19, 2015 [8 favorites]
This is all about a German morality play. They are convinced that lazy Southern Europeans who never work are sucking dry the industrious Northern Europeans.
Really? My impression is that the real hardliners are not in Germany but elsewhere:
The IMF, represented by Christine Lagarde, who is French. Looks like the IMF won't budge one bit and Lagarde just said that you can only make a deal with grown-ups.
J. Dijsselbloem (Dutch), representing the Euro-zone countries, boy what a hardliner.
J-C Juncker (commission chief, Luxembourg) seemed to be most conciliatory and understanding of the Greek postion, but is now seriously pissed off, because Tsipras is constantly lying to the Greek parliament about the discussions - he'll tell the parliament things like that Juncker wants to cut Greek pensions by X% when that simply isn't true.
Then there were the prime ministers from some smaller countries like Slovenia and Estonia, who pointed out that the living standard in Greece is still higher than in their respective countries.
And the other Southern European countries like Spain and Italy are also not rooting for Tsipras because they fear the anti-Europe parties in their own countries.
Apparently the original strategy of Syriza was to drive a wedge between the EU countries, but that strategy failed utterly. So stating that this is a German morality play seems to be misleading (unless you lump together a lot of other countries in Europe as "Germany"). Especially when Greece seems to be totally isolated in Europe for a variety of reasons.
Also, I just heard that the Greek parliament decleared the 360 billion Euros in loans that Greece already got as "illegal", "immoral" and whatnot, so that there is no need to pay them back. Maybe not the smartest move to make while you're asking for more money. But I think it's also a reflection of the Greek psyche: It's always the fault of the others. I don't think anything will change in that country until that attitude changes. Maybe a Grexit (combined with a hair-cut, which does seem reasonable) would be a much-needed catalyst for that.
Greeks work harder than Germans. Who knew?
Oh sure. And they werein great financial shape before they joined the Euro (see hippybear's link).
I think if there is one thing that we've learned from all this is that you can never trust Greek statistics.
posted by sour cream at 2:42 AM on June 19, 2015 [1 favorite]
Really? My impression is that the real hardliners are not in Germany but elsewhere:
The IMF, represented by Christine Lagarde, who is French. Looks like the IMF won't budge one bit and Lagarde just said that you can only make a deal with grown-ups.
J. Dijsselbloem (Dutch), representing the Euro-zone countries, boy what a hardliner.
J-C Juncker (commission chief, Luxembourg) seemed to be most conciliatory and understanding of the Greek postion, but is now seriously pissed off, because Tsipras is constantly lying to the Greek parliament about the discussions - he'll tell the parliament things like that Juncker wants to cut Greek pensions by X% when that simply isn't true.
Then there were the prime ministers from some smaller countries like Slovenia and Estonia, who pointed out that the living standard in Greece is still higher than in their respective countries.
And the other Southern European countries like Spain and Italy are also not rooting for Tsipras because they fear the anti-Europe parties in their own countries.
Apparently the original strategy of Syriza was to drive a wedge between the EU countries, but that strategy failed utterly. So stating that this is a German morality play seems to be misleading (unless you lump together a lot of other countries in Europe as "Germany"). Especially when Greece seems to be totally isolated in Europe for a variety of reasons.
Also, I just heard that the Greek parliament decleared the 360 billion Euros in loans that Greece already got as "illegal", "immoral" and whatnot, so that there is no need to pay them back. Maybe not the smartest move to make while you're asking for more money. But I think it's also a reflection of the Greek psyche: It's always the fault of the others. I don't think anything will change in that country until that attitude changes. Maybe a Grexit (combined with a hair-cut, which does seem reasonable) would be a much-needed catalyst for that.
Greeks work harder than Germans. Who knew?
Oh sure. And they werein great financial shape before they joined the Euro (see hippybear's link).
I think if there is one thing that we've learned from all this is that you can never trust Greek statistics.
posted by sour cream at 2:42 AM on June 19, 2015 [1 favorite]
Since they're already talking about the banks not opening on Monday, I wouldn't be surprised if the tanks rolled on Grexit later today or tomorrow. The mechanics mean it has to happen suddenly, and you can practically feel the "It won't be so bad" (it will) PR button being pressed.
posted by Devonian at 2:53 AM on June 19, 2015 [1 favorite]
posted by Devonian at 2:53 AM on June 19, 2015 [1 favorite]
Also, I just heard that the Greek parliament decleared the 360 billion Euros in loans that Greece already got as "illegal", "immoral" and whatnot, so that there is no need to pay them back.
As you might expect, nobody is taking that seriously - explicit acknowledgment of all of the debt by the Syriza/ANEL government was part of the February agreement.
This is more or less a stunt by the Speaker of Parliament, Zoe Constantopoulou: She's been busy using her supposedly neutral office to push Tsipras to the left and away from compromise, which just happens to give her lots of personal promotion, and strengthens a claim to a post-Tsipras Syriza leaderhsip. The ridiculous thing is that she was voted in by a huge majority from all parties - Tsipras probably though he was parking her in a safe out-of-the-way spot, while the opposition was betting she's going to be a thorn in his side and has so far been proven true.
I wouldn't be surprised if the tanks rolled on Grexit later today or tomorrow
Last poll I saw had about 70% against leaving the Euro, and 56% for compromise, even if it included painful measures: a sudden exit would be a real mess on the ground. I doubt anybody would be stupid enough to try it before exhausting all options and then some.
posted by Dr Dracator at 3:34 AM on June 19, 2015
As you might expect, nobody is taking that seriously - explicit acknowledgment of all of the debt by the Syriza/ANEL government was part of the February agreement.
This is more or less a stunt by the Speaker of Parliament, Zoe Constantopoulou: She's been busy using her supposedly neutral office to push Tsipras to the left and away from compromise, which just happens to give her lots of personal promotion, and strengthens a claim to a post-Tsipras Syriza leaderhsip. The ridiculous thing is that she was voted in by a huge majority from all parties - Tsipras probably though he was parking her in a safe out-of-the-way spot, while the opposition was betting she's going to be a thorn in his side and has so far been proven true.
I wouldn't be surprised if the tanks rolled on Grexit later today or tomorrow
Last poll I saw had about 70% against leaving the Euro, and 56% for compromise, even if it included painful measures: a sudden exit would be a real mess on the ground. I doubt anybody would be stupid enough to try it before exhausting all options and then some.
posted by Dr Dracator at 3:34 AM on June 19, 2015
Well, I hope so. But one of the rules is - nobody expects it, because if it doesn't come out of the blue then it's far worse. Nobody's going to just sit around while the notes are printed.
It's like the logical paradox of the surprise inspection of a regiment at the military base, which has just one rule: nobody can know what day it happens. Thus it can't happen on the last day of their posting, because if it hasn't happened by the penultimate day everyone knows it's tomorrow. But if it can't happen on the last day, it can't happen on the penultimate day because by the day before that, people will know. Through induction, it can't happen at all..
posted by Devonian at 4:05 AM on June 19, 2015 [2 favorites]
It's like the logical paradox of the surprise inspection of a regiment at the military base, which has just one rule: nobody can know what day it happens. Thus it can't happen on the last day of their posting, because if it hasn't happened by the penultimate day everyone knows it's tomorrow. But if it can't happen on the last day, it can't happen on the penultimate day because by the day before that, people will know. Through induction, it can't happen at all..
posted by Devonian at 4:05 AM on June 19, 2015 [2 favorites]
Still, there's an urgent Eurogroup meeting on Monday, and PMs are going to meet after that: it would be pretty weird if the issue was de facto settled before that.
posted by Dr Dracator at 4:23 AM on June 19, 2015
posted by Dr Dracator at 4:23 AM on June 19, 2015
And of course workers resisting this just get put into 'anecdotes' like this which are meant to automatically illustrate how Greece 'had to reform', blah.
Somehow, despite your abject stupidity on this particular matter, you hit the nail on the head. Anecdotes like these illustrate how Greece has to reform, and won't; it also reflects some of the Greek attitudes that don't necessarily get reported internationally, vis-a-vis how Tsipras plays out locally.
Mind you that before the troika showed up, Greece was a country where civil servants, as a rule, never got fired. No matter how incompetent or corrupt. Of course the Finance Ministry doesn't need 600 cleaning ladies. But Syriza has rehired them and this is a great victory over "austerity."
Greece will continue to be a liability even if it leaves the EU, don't worry.
posted by phaedon at 6:12 AM on June 19, 2015
Somehow, despite your abject stupidity on this particular matter, you hit the nail on the head. Anecdotes like these illustrate how Greece has to reform, and won't; it also reflects some of the Greek attitudes that don't necessarily get reported internationally, vis-a-vis how Tsipras plays out locally.
Mind you that before the troika showed up, Greece was a country where civil servants, as a rule, never got fired. No matter how incompetent or corrupt. Of course the Finance Ministry doesn't need 600 cleaning ladies. But Syriza has rehired them and this is a great victory over "austerity."
Greece will continue to be a liability even if it leaves the EU, don't worry.
posted by phaedon at 6:12 AM on June 19, 2015
Mind you that before the troika showed up, Greece was a country where civil servants, as a rule, never got fired. No matter how incompetent or corrupt.
A bit like bankers or politicians then? And were these cleaners incompetent and corrupt? I didn't hear that.
Of course the Finance Ministry doesn't need 600 cleaning ladies.
Some reports have the number as more like 400, and in any case they were earning so little (300 to 650 euros a month) that it hardly matters - it certainly wasn't them and their families that bankrupted Greece. They were symbolic, and an inspiration - as even the most craven of the right-wing media admitted.
Greece will continue to be a liability even if it leaves the EU, don't worry.
A liability for international finance capital, for sure. Boo hoo.
posted by colie at 6:56 AM on June 19, 2015
A bit like bankers or politicians then? And were these cleaners incompetent and corrupt? I didn't hear that.
Of course the Finance Ministry doesn't need 600 cleaning ladies.
Some reports have the number as more like 400, and in any case they were earning so little (300 to 650 euros a month) that it hardly matters - it certainly wasn't them and their families that bankrupted Greece. They were symbolic, and an inspiration - as even the most craven of the right-wing media admitted.
Greece will continue to be a liability even if it leaves the EU, don't worry.
A liability for international finance capital, for sure. Boo hoo.
posted by colie at 6:56 AM on June 19, 2015
Mod note: Comment and reply removed. You guys want to keep discussing this, that's fine, but it needs not to get dickish.
posted by cortex (staff) at 11:35 AM on June 19, 2015
posted by cortex (staff) at 11:35 AM on June 19, 2015
Greece’s Proposals to End the Crisis: My intervention at today’s Eurogroup
Varoufakis' last effort at the Eurogroup meeting. Apparently they just ignored him and then Lagarde made that crack about wanting to talk to the grown-ups.
posted by chavenet at 4:10 PM on June 19, 2015 [2 favorites]
Varoufakis' last effort at the Eurogroup meeting. Apparently they just ignored him and then Lagarde made that crack about wanting to talk to the grown-ups.
posted by chavenet at 4:10 PM on June 19, 2015 [2 favorites]
via Edward Harrison:
-Kiev offers growth-linked bonds to end impasse with creditors
-Washington fears losing Greece to Moscow (greece could apply for funds from china's AIIB to be on its 'new silk road' too! ;)
posted by kliuless at 6:19 PM on June 21, 2015
- "James Hamilton on renegotiating Greece's debt; he says the debts are unpayable"*
- Frances Coppola: "So, is the world's press going to expose the dishonesty and double dealing of the Eurogroup, then?"
- 1/ On this observation from @marcmakingsense it is clear potential output in Greece is much higher today
- 2/ A good, non-extend and pretend deal would recognize the need to close the gap to potential output in Greece ASAP by reducing UE first
- 3/ NPV value recovery for creditors increases markedly if output gap in Greece closes rapidly, which suggests austerity counterproductive
- 4/ idea of GDP-linked bonds by @yanisvaroufakis makes sense in context of a rapid close of output gap, reduction of UE (unemployment)
-Kiev offers growth-linked bonds to end impasse with creditors
-Washington fears losing Greece to Moscow (greece could apply for funds from china's AIIB to be on its 'new silk road' too! ;)
posted by kliuless at 6:19 PM on June 21, 2015
Why the words ‘civil war’ are no longer a joke in Greece
posted by Noisy Pink Bubbles at 5:37 AM on June 24, 2015
posted by Noisy Pink Bubbles at 5:37 AM on June 24, 2015
Greek PM Alexis Tsipras calls referendum on bailout terms - Greek people to vote up or down on European bailout terms, to take place July 5th
posted by Noisy Pink Bubbles at 9:45 PM on June 26, 2015
posted by Noisy Pink Bubbles at 9:45 PM on June 26, 2015
Greek parliament is debating Tsipras' proposed referendum now (live stream here), with a vote scheduled for midnight. That's likely after a decision at this afternoon's Eurogroup meeting in Brussels on whether to extend the June 30th repayment deadline to next Sunday, the currently slated date for the referendum.
Current word seems to be "no extension".
It's looking like a day that'll be remembered. (Guardian liveblog here.)
posted by progosk at 3:59 AM on June 27, 2015
Current word seems to be "no extension".
It's looking like a day that'll be remembered. (Guardian liveblog here.)
posted by progosk at 3:59 AM on June 27, 2015
Two issues loom:
1. would such a referendum even be constiitutional in Greece? Apparently only if it's framed as concerning a "crucial national issue"
2. what, technically, would be voted on? It's not clear the creditors' last offer is even on the table anymore today, let alone next weekend.
Metaphors trending: pulled plugs, closed doors, ring fences...
posted by progosk at 5:11 AM on June 27, 2015
1. would such a referendum even be constiitutional in Greece? Apparently only if it's framed as concerning a "crucial national issue"
2. what, technically, would be voted on? It's not clear the creditors' last offer is even on the table anymore today, let alone next weekend.
Metaphors trending: pulled plugs, closed doors, ring fences...
posted by progosk at 5:11 AM on June 27, 2015
Politico liveblog with rolling updates. Latest news: a "clear majority" of the Eurogroup feels that an extension will not happen. Finnish Finance Minister: "I feel quite sad about the situation especially on behalf of the Greek people. I believe plan B is quickly becoming plan A."
posted by (Arsenio) Hall and (Warren) Oates at 5:26 AM on June 27, 2015
posted by (Arsenio) Hall and (Warren) Oates at 5:26 AM on June 27, 2015
1. would such a referendum even be constiitutional in Greece? Apparently only if it's framed as concerning a "crucial national issue"
This is exactly how it's being put forward. The Greek constitution has been somewhat... flexible... since this whole mess started.
2. what, technically, would be voted on? It's not clear the creditors' last offer is even on the table anymore today, let alone next weekend.
Understandably, much hillarity will ensue if the Eurogroup doesn't play along on this.
posted by Dr Dracator at 5:35 AM on June 27, 2015
This is exactly how it's being put forward. The Greek constitution has been somewhat... flexible... since this whole mess started.
2. what, technically, would be voted on? It's not clear the creditors' last offer is even on the table anymore today, let alone next weekend.
Understandably, much hillarity will ensue if the Eurogroup doesn't play along on this.
posted by Dr Dracator at 5:35 AM on June 27, 2015
What Will Greeks Vote on? The Referendum Question, Bloomberg.
The FT has this pdf of the first of the two 25th June documents to be voted on.
posted by progosk at 5:57 AM on June 27, 2015
The FT has this pdf of the first of the two 25th June documents to be voted on.
posted by progosk at 5:57 AM on June 27, 2015
Varoufakis: "It's a sad day for Europe... but we will overcome it."
posted by progosk at 10:32 AM on June 27, 2015
posted by progosk at 10:32 AM on June 27, 2015
Argument here that Tsiparas really wants to leave the euro, and the referendum is a fig-leaf to enable him to do so, but blame someone else (the creditors). (Which kinda makes sense to me; his strategy just seems so weird otherwise). And meanwhile, the creditors (EU ministers) have refused a bailout extension.
I haven't been following this closely in the last few months, but I used to work for lawyers who were sovereign debt experts. It seems that everything is happening as badly as possible - what we always expected would happen is that Greece would default without much warning, on the evening of the last working day before a long weekend (probably Easter Thursday). That would give them four days with the markets and banks closed to take emergency measures, impose capital controls, ensure there were sufficient notes in the ATMs, everything like that. One of my colleagues worked with a small bank that did just that. You'd have the Greek government, banks, EU all working together. Instead we seem to have the opposite. Total chaos, things falling apart slowly. Poor Greece.
posted by Pink Frost at 3:48 PM on June 27, 2015
I haven't been following this closely in the last few months, but I used to work for lawyers who were sovereign debt experts. It seems that everything is happening as badly as possible - what we always expected would happen is that Greece would default without much warning, on the evening of the last working day before a long weekend (probably Easter Thursday). That would give them four days with the markets and banks closed to take emergency measures, impose capital controls, ensure there were sufficient notes in the ATMs, everything like that. One of my colleagues worked with a small bank that did just that. You'd have the Greek government, banks, EU all working together. Instead we seem to have the opposite. Total chaos, things falling apart slowly. Poor Greece.
posted by Pink Frost at 3:48 PM on June 27, 2015
Argument here that Tsiparas really wants to leave the euro...
Remember, you read it on Metafilter first!
Now I wonder how long it will take until it is discovered that some relatives of Tsipras and Varoufakis or higher-ups at Syriza have bet on the Grexit early on and made a shit-load of money. I think that would be entirely consistent with that country's pattern of political corruption and the surprising thing would be if they could have withstood that temptation.
Either that or it is an even sadder clash of European leftist idealism with reality.
posted by sour cream at 7:24 PM on June 27, 2015 [1 favorite]
Remember, you read it on Metafilter first!
Now I wonder how long it will take until it is discovered that some relatives of Tsipras and Varoufakis or higher-ups at Syriza have bet on the Grexit early on and made a shit-load of money. I think that would be entirely consistent with that country's pattern of political corruption and the surprising thing would be if they could have withstood that temptation.
Either that or it is an even sadder clash of European leftist idealism with reality.
posted by sour cream at 7:24 PM on June 27, 2015 [1 favorite]
I fear this could be like the Lehman Brothers fiasco.
posted by humanfont at 7:24 PM on June 27, 2015
posted by humanfont at 7:24 PM on June 27, 2015
Either that or it is an even sadder clash of European leftist idealism with reality.
This.
These are seriously uncharted waters - it's been a day of destiny.
posted by progosk at 11:35 PM on June 27, 2015
This.
These are seriously uncharted waters - it's been a day of destiny.
posted by progosk at 11:35 PM on June 27, 2015
Yesterday also saw a notable mea culpa from DSK, who was head of the IMF prior to Lagarde, and had a hand in setting these events rolling: On learning from one's mistakes.
posted by progosk at 11:55 PM on June 27, 2015
posted by progosk at 11:55 PM on June 27, 2015
Piketty (previouslier) at lunch with the FT (non-paywalled via Google):
“Europe is choosing the wrong path, the path of eternal penitence . . . It would be a catastrophe to force Greece out of the eurozone.”
It is ironic, he says, that austerity is imposed on debt-laden Greece by two countries, Germany and France, that benefited from debt cancellations after the second world war: a move that allowed 30 years of growth on the continent. “There’s some sort of collective amnesia,” he says, getting more animated. “It is this cancellation that allowed them to invest in education, innovation and public infrastructure. And now, those same countries tell Greece that it will have to pay 4 per cent of its GDP for 30 years. Who can believe this?” The role of the International Monetary Fund in the Greek talks is a “catastrophe,” he sighs.
The eurozone crisis, according to Piketty, reflects a deeply flawed governance, where only two leaders decide who calls for “a democratic overhaul of European institutions . . . It’s purely because we are unable to organise ourselves politically that we’re in deep shit,” he says.
In yesterday's last-gasp meeting in Brussels only France remained open to Tsipras' proposition, at least regarding the brief extension to allow their proposed process to take place.
Hollande is “hopeless,” says Piketty, who in January rejected the Légion d’Honneur award because, he said then, the state had “no right to decide who is honourable”. The French president has failed on his campaign promise to change the austerity stance prevailing in Europe, he continues. This makes him as responsible as German chancellor Angela Merkel for the eurozone’s woes.
“We replaced Merkozy with Merkollande,” he sneers.
posted by progosk at 1:11 AM on June 28, 2015
“Europe is choosing the wrong path, the path of eternal penitence . . . It would be a catastrophe to force Greece out of the eurozone.”
It is ironic, he says, that austerity is imposed on debt-laden Greece by two countries, Germany and France, that benefited from debt cancellations after the second world war: a move that allowed 30 years of growth on the continent. “There’s some sort of collective amnesia,” he says, getting more animated. “It is this cancellation that allowed them to invest in education, innovation and public infrastructure. And now, those same countries tell Greece that it will have to pay 4 per cent of its GDP for 30 years. Who can believe this?” The role of the International Monetary Fund in the Greek talks is a “catastrophe,” he sighs.
The eurozone crisis, according to Piketty, reflects a deeply flawed governance, where only two leaders decide who calls for “a democratic overhaul of European institutions . . . It’s purely because we are unable to organise ourselves politically that we’re in deep shit,” he says.
In yesterday's last-gasp meeting in Brussels only France remained open to Tsipras' proposition, at least regarding the brief extension to allow their proposed process to take place.
Hollande is “hopeless,” says Piketty, who in January rejected the Légion d’Honneur award because, he said then, the state had “no right to decide who is honourable”. The French president has failed on his campaign promise to change the austerity stance prevailing in Europe, he continues. This makes him as responsible as German chancellor Angela Merkel for the eurozone’s woes.
“We replaced Merkozy with Merkollande,” he sneers.
posted by progosk at 1:11 AM on June 28, 2015
So the ECB has stopped short of their nuclear option, just capping, not cutting, the €8.9bn emergency liquidity assistance extended to Greek banks so far.
The ride is about to get tougher - stay safe, MeFi Greeks (and ex-pats); and keep us posted, if you can...
posted by progosk at 7:00 AM on June 28, 2015
The ride is about to get tougher - stay safe, MeFi Greeks (and ex-pats); and keep us posted, if you can...
posted by progosk at 7:00 AM on June 28, 2015
Greece Will Close Banks to Stem Flood of Withdrawals
posted by Noisy Pink Bubbles at 11:17 AM on June 28, 2015
posted by Noisy Pink Bubbles at 11:17 AM on June 28, 2015
So, is this the eurozone's Sarajevo moment?
posted by progosk at 3:18 PM on June 28, 2015 [1 favorite]
posted by progosk at 3:18 PM on June 28, 2015 [1 favorite]
"So, is this the eurozone's Sarajevo moment?"
I'm inclined to think not. Non-european commenters have very badly underestimated the psychological importance to Europeans of the idea of a unified Europe. Or, for that matter, the very naive idea that a currency union is some sort of panacea -- the best example of this recently was the debate surrounding the referendum in Scotland. There was a very strong sentiment among those preferring independence to keep the pound sterling, even though that in the context of political independence (with a leftist Scottish government and a rightist UK government) would mean that the UK would control Scotland's monetary policy and therefore indirectly control Scotland's fiscal policy. Sound familiar? Almost no one knew enough of the economics to understand why this would more than offset any benefits of the common currency. People think a common currency by its very nature solves all sorts of economic problems and eliminates barriers -- even though the Scots themselves along with the rest of the UK use the pound sterling to trade with the rest of the Europe with little problem.
So both with regard to keeping the Euro specifically and with regard to the more nebulous idea of the EU, even under these conditions and even under worsening conditions there is going to be a majority hostility in Greece to leaving the euro.
In my view, then, Greece is headed toward the worst of all worlds.
It's possible that if Greece defaults and there's capital controls and they limp along with the euro, that Syriza will then make a persuasive case to go back to the drachma. I can see that, but my sense is that the majority won't be convinced.
Which is why I think the troika is taking such a hard line. They want this worst of all possible outcomes because the end result will be a near total collapse of the Greek economy with no real solution in sight, which will then cause a collapse of the Syriza government, and then the troika will offer somewhat better terms to the new, center-right government they prefer. This will also send a message to the anti-austerity left in the rest of Europe.
I think we've reached this outcome because Syriza did, in fact, make some hard promises to the voters and has been very clear about what their redlines are. And the troika has known this. The troika hasn't liked this. Contrary to press reports and propaganda, Syriza has been quite reasonable, given the mandate of it, a new government elected as a protest against austerity. But it really hasn't been in the interests of the troika to reach a compromise with Syriza, assuming that they can force Syriza to fall and then reach a deal with a more tractable government. To Syriza and American observers, this has seemed to be crazy, since any hard deal that would push Syriza past its limits would make Grexit look like a good choice. But that's a purely economic argument and doesn't acknowledge the political reality of Greek resistance to leaving the euro. I don't know exactly why Syriza doesn't seem to understand this -- but I think Tsipras does know this, he's just sort of trapped into playing this all out. That's why he's not explicitly putting Grexit on the table in the referendum -- it's why he's said that a "no" to a deal does not necessarily imply Grexit -- he understands the the greek people instinctively strongly prefer keeping the euro.
But this is why I think that Tsipras and Syriza have actually "blinked" -- they should have been making the case to the Greek people all along that the viable alternative to an intractable troika was to leave the euro. Even if the Greek people would have remained skeptical, just putting that explicitly on the table would have made the troika less certain that it has the greatest leverage.
The other possibility is, of course, that rather than a new government more amenable to the troika, what this results in is a far-right government that looks to Russia for help. And Greece could do this while keeping the euro. A right-wing government could get financing from Russia to service its debt, without any of the austerity or reforms demanded by the troika, but with some other concession to Russia that Russia cares greatly about -- I have to believe that the rest of Europe understands the cultural and regional reasons why common cause between Russia and Greece is entirely possible, even though people seem blind to it. But this would be a disaster for both the EU and for NATO, and generally a disaster for democracy and liberalism in Europe. I think it's a very real possibility. A terrible possibility. But it's one that the troika is willing to risk. Here is where these leaders have been very reckless.
posted by Ivan Fyodorovich at 5:00 PM on June 28, 2015 [7 favorites]
I'm inclined to think not. Non-european commenters have very badly underestimated the psychological importance to Europeans of the idea of a unified Europe. Or, for that matter, the very naive idea that a currency union is some sort of panacea -- the best example of this recently was the debate surrounding the referendum in Scotland. There was a very strong sentiment among those preferring independence to keep the pound sterling, even though that in the context of political independence (with a leftist Scottish government and a rightist UK government) would mean that the UK would control Scotland's monetary policy and therefore indirectly control Scotland's fiscal policy. Sound familiar? Almost no one knew enough of the economics to understand why this would more than offset any benefits of the common currency. People think a common currency by its very nature solves all sorts of economic problems and eliminates barriers -- even though the Scots themselves along with the rest of the UK use the pound sterling to trade with the rest of the Europe with little problem.
So both with regard to keeping the Euro specifically and with regard to the more nebulous idea of the EU, even under these conditions and even under worsening conditions there is going to be a majority hostility in Greece to leaving the euro.
In my view, then, Greece is headed toward the worst of all worlds.
It's possible that if Greece defaults and there's capital controls and they limp along with the euro, that Syriza will then make a persuasive case to go back to the drachma. I can see that, but my sense is that the majority won't be convinced.
Which is why I think the troika is taking such a hard line. They want this worst of all possible outcomes because the end result will be a near total collapse of the Greek economy with no real solution in sight, which will then cause a collapse of the Syriza government, and then the troika will offer somewhat better terms to the new, center-right government they prefer. This will also send a message to the anti-austerity left in the rest of Europe.
I think we've reached this outcome because Syriza did, in fact, make some hard promises to the voters and has been very clear about what their redlines are. And the troika has known this. The troika hasn't liked this. Contrary to press reports and propaganda, Syriza has been quite reasonable, given the mandate of it, a new government elected as a protest against austerity. But it really hasn't been in the interests of the troika to reach a compromise with Syriza, assuming that they can force Syriza to fall and then reach a deal with a more tractable government. To Syriza and American observers, this has seemed to be crazy, since any hard deal that would push Syriza past its limits would make Grexit look like a good choice. But that's a purely economic argument and doesn't acknowledge the political reality of Greek resistance to leaving the euro. I don't know exactly why Syriza doesn't seem to understand this -- but I think Tsipras does know this, he's just sort of trapped into playing this all out. That's why he's not explicitly putting Grexit on the table in the referendum -- it's why he's said that a "no" to a deal does not necessarily imply Grexit -- he understands the the greek people instinctively strongly prefer keeping the euro.
But this is why I think that Tsipras and Syriza have actually "blinked" -- they should have been making the case to the Greek people all along that the viable alternative to an intractable troika was to leave the euro. Even if the Greek people would have remained skeptical, just putting that explicitly on the table would have made the troika less certain that it has the greatest leverage.
The other possibility is, of course, that rather than a new government more amenable to the troika, what this results in is a far-right government that looks to Russia for help. And Greece could do this while keeping the euro. A right-wing government could get financing from Russia to service its debt, without any of the austerity or reforms demanded by the troika, but with some other concession to Russia that Russia cares greatly about -- I have to believe that the rest of Europe understands the cultural and regional reasons why common cause between Russia and Greece is entirely possible, even though people seem blind to it. But this would be a disaster for both the EU and for NATO, and generally a disaster for democracy and liberalism in Europe. I think it's a very real possibility. A terrible possibility. But it's one that the troika is willing to risk. Here is where these leaders have been very reckless.
posted by Ivan Fyodorovich at 5:00 PM on June 28, 2015 [7 favorites]
While attachment to the Euro is no doubt strong, the idea that Greek citizens will sign up for open-ended financial hardship to remain a part of it seems hard to believe.
If Greece had defaulted 5 years ago it would likely have reasonable access to capital markets again by now. And it is hard to see how such a default could have been much worse than 25% unemployment etc.
And remember a default doesn't have to be monolithic.
They can repudiate only some debts, if they believe it will leave them in better standing with global bond markets. It would be an amusing lesson in neo-liberal capitalism if Greece defaulted on the troika debts but stood by private creditors.
The road they seem to be taking, however, does look very messy if a default is being considered.
posted by bystander at 7:15 PM on June 28, 2015
If Greece had defaulted 5 years ago it would likely have reasonable access to capital markets again by now. And it is hard to see how such a default could have been much worse than 25% unemployment etc.
And remember a default doesn't have to be monolithic.
They can repudiate only some debts, if they believe it will leave them in better standing with global bond markets. It would be an amusing lesson in neo-liberal capitalism if Greece defaulted on the troika debts but stood by private creditors.
The road they seem to be taking, however, does look very messy if a default is being considered.
posted by bystander at 7:15 PM on June 28, 2015
Contrary to press reports and propaganda, Syriza has been quite reasonable, given the mandate of it, a new government elected as a protest against austerity.
Can I ask where you are getting this from? Not that the troika hasn't been out to humiliate them from day one, but Syriza negotiating tactics to me look like amateur hour, more interested in internal party clashes than real results.
Witness this new referendum: why didn't we hold it a couple of weeks ago, before the program expired? We had plenty of time to go to the troika and say give us your best deal and we'll let the people decide.
posted by Dr Dracator at 8:13 AM on June 29, 2015 [1 favorite]
Can I ask where you are getting this from? Not that the troika hasn't been out to humiliate them from day one, but Syriza negotiating tactics to me look like amateur hour, more interested in internal party clashes than real results.
Witness this new referendum: why didn't we hold it a couple of weeks ago, before the program expired? We had plenty of time to go to the troika and say give us your best deal and we'll let the people decide.
posted by Dr Dracator at 8:13 AM on June 29, 2015 [1 favorite]
Markets fall as twin defaults loom in Greece, Puerto Rico
posted by Noisy Pink Bubbles at 4:22 PM on June 29, 2015
posted by Noisy Pink Bubbles at 4:22 PM on June 29, 2015
Greece in chaos: will Syriza’s last desperate gamble pay off?
posted by Noisy Pink Bubbles at 8:13 PM on June 29, 2015
posted by Noisy Pink Bubbles at 8:13 PM on June 29, 2015
Felix Salmon's explainer is pretty good reading.
Michael Lewis' moralizing snark is not.
posted by progosk at 9:49 PM on June 29, 2015 [2 favorites]
Michael Lewis' moralizing snark is not.
posted by progosk at 9:49 PM on June 29, 2015 [2 favorites]
Joseph Stiglitz: how I would vote in the Greek referendum
posted by Noisy Pink Bubbles at 5:10 AM on June 30, 2015
posted by Noisy Pink Bubbles at 5:10 AM on June 30, 2015
Damn. Lewis got personal in that column. What the hell.
posted by (Arsenio) Hall and (Warren) Oates at 5:40 AM on June 30, 2015
posted by (Arsenio) Hall and (Warren) Oates at 5:40 AM on June 30, 2015
Greece says it won't pay IMF loan by deadline -- deadline is today, 5pm Eastern Time
posted by Noisy Pink Bubbles at 6:36 AM on June 30, 2015
posted by Noisy Pink Bubbles at 6:36 AM on June 30, 2015
I gather that the market opinion is Greece won't be philosophically in default until the results of the referendum are known, even if it does technically default today. Because if the referendum accepts the bailout terms it could effectively be back-dated.
Which is a recipe for more disruption and confusion.
It really is as if Tsipras has decided to let it slide into chaos so he can say "How much worse would a default be? At least we could repudiate $320b." Which at this stage of the game, from a Greek national perspective, isn't a bad strategy I reckon.
posted by bystander at 7:04 AM on June 30, 2015
Which is a recipe for more disruption and confusion.
It really is as if Tsipras has decided to let it slide into chaos so he can say "How much worse would a default be? At least we could repudiate $320b." Which at this stage of the game, from a Greek national perspective, isn't a bad strategy I reckon.
posted by bystander at 7:04 AM on June 30, 2015
Uh, eponysterical?
posted by Dr Dracator at 7:43 AM on June 30, 2015
posted by Dr Dracator at 7:43 AM on June 30, 2015
Can someone explain something to me that I don't quite understand:
If it was been generally agreed-upon that the Greek fiscal policy was reckless to the point that the country would never pay back its debts, why was Greece allowed to continue to borrow?
posted by schmod at 2:34 PM on June 30, 2015
If it was been generally agreed-upon that the Greek fiscal policy was reckless to the point that the country would never pay back its debts, why was Greece allowed to continue to borrow?
posted by schmod at 2:34 PM on June 30, 2015
>Greek fiscal policy was reckless
The Greek government was viewed as running large deficits, but investors still bought their bonds as nation-states are generally reasonably safe investments, they can collect taxes at gun point after all.
The GFC dried up credit in an instant forcing the troika to loan them money to avert collapse. At around the same time it was revealed the debt levels were worse than had been reported due to an "error".
I believe the troika also took over some Greek debt privately held by banks, but I am not sure of that process.
So in summary, a little fanciful accounting and a lot of wishful thinking about how the creditors would be paid back. In other words, lenders took the usual risks for which they are remunerated with interest. That those lenders miscalculated has become apparent, but the damage to the Euro is why the troika has supported Greece so far, any other country would have defaulted years ago.
posted by bystander at 4:21 PM on June 30, 2015 [2 favorites]
The Greek government was viewed as running large deficits, but investors still bought their bonds as nation-states are generally reasonably safe investments, they can collect taxes at gun point after all.
The GFC dried up credit in an instant forcing the troika to loan them money to avert collapse. At around the same time it was revealed the debt levels were worse than had been reported due to an "error".
I believe the troika also took over some Greek debt privately held by banks, but I am not sure of that process.
So in summary, a little fanciful accounting and a lot of wishful thinking about how the creditors would be paid back. In other words, lenders took the usual risks for which they are remunerated with interest. That those lenders miscalculated has become apparent, but the damage to the Euro is why the troika has supported Greece so far, any other country would have defaulted years ago.
posted by bystander at 4:21 PM on June 30, 2015 [2 favorites]
If it was been generally agreed-upon that the Greek fiscal policy was reckless to the point that the country would never pay back its debts, why was Greece allowed to continue to borrow?
Short answer: Because of magical thinking.
Slightly longer answer: The Euro is more of a political project, rather than an economic one. Thus, the decisions to keep giving more money to Greece were based on political reasoning, rather than economic. Basically Juncker etc. are trying to hold everything together at (nearly?) any cost because they believe the political costs outweigh the economic costs. The sad thing about this situation is that the economic costs have already been expended (320 billion EUR transferred from EU countries to (a) a bunch of corrupt Greek politicians and their cronies and (b) the lender banks), while the political costs (Greece exiting the Euro) could not be avoided.
posted by sour cream at 8:10 PM on June 30, 2015
Short answer: Because of magical thinking.
Slightly longer answer: The Euro is more of a political project, rather than an economic one. Thus, the decisions to keep giving more money to Greece were based on political reasoning, rather than economic. Basically Juncker etc. are trying to hold everything together at (nearly?) any cost because they believe the political costs outweigh the economic costs. The sad thing about this situation is that the economic costs have already been expended (320 billion EUR transferred from EU countries to (a) a bunch of corrupt Greek politicians and their cronies and (b) the lender banks), while the political costs (Greece exiting the Euro) could not be avoided.
posted by sour cream at 8:10 PM on June 30, 2015
Crowdsourcing the Greek Bailout Fund :
€1.6bn is what the Greeks need. It might seem like a lot but it's only just over €3 from each European. That's about the same as half a pint in London. Or everyone in the EU just having a Feta and Olive salad for lunch.
So come on, order a Feta and Olive salad, maybe wash it down with an Ouzo or glass of Assyrtiko greek wine and let's sort this shit out.
posted by a lungful of dragon at 8:17 PM on June 30, 2015 [1 favorite]
€1.6bn is what the Greeks need. It might seem like a lot but it's only just over €3 from each European. That's about the same as half a pint in London. Or everyone in the EU just having a Feta and Olive salad for lunch.
So come on, order a Feta and Olive salad, maybe wash it down with an Ouzo or glass of Assyrtiko greek wine and let's sort this shit out.
posted by a lungful of dragon at 8:17 PM on June 30, 2015 [1 favorite]
Jesus, how far gone are we when we've resorted to crowdsourcing to reduce the misery caused by bankers who didn't want to eat their bad investments?
posted by tonycpsu at 9:03 PM on June 30, 2015
posted by tonycpsu at 9:03 PM on June 30, 2015
Hmm, crowdsourcing for funds. If only we'd thought of that before. It needs a shorter and punchier name though. Maybe something like "bux" ... or "pax" ... or "tax" ... it'll come to me in a second.
(Talk about privatizing profit and socializing losses. This is shameless.)
posted by RedOrGreen at 8:20 AM on July 1, 2015 [3 favorites]
(Talk about privatizing profit and socializing losses. This is shameless.)
posted by RedOrGreen at 8:20 AM on July 1, 2015 [3 favorites]
The crowdfunding thing reflexively offended me at first glance, but.... they might actually hit their target?
Viewed one way, this is a ransom to hold the EU together for a little bit longer. In that light, maybe it's worth paying?
Europe's emergent right-wing is terrifying, and I really don't want to think of the implications of the EU falling apart right now.
posted by schmod at 8:41 AM on July 1, 2015
Viewed one way, this is a ransom to hold the EU together for a little bit longer. In that light, maybe it's worth paying?
Europe's emergent right-wing is terrifying, and I really don't want to think of the implications of the EU falling apart right now.
posted by schmod at 8:41 AM on July 1, 2015
I guess I'm in the minority -- I not only loved the crowdfunding thing but threw them €10 (no perks... I was admittedly a little skeptical of how one would ship a fresh salad to my house). OK, mostly it's for-the-lulz factor, but I really love the idea that, while all the Very Important People are running around having a public game of chicken as their constituents run on the banks and buy the stores out of nonperishables (granted: constituents who seem to find it sporting not to pay taxes), some total random dude in England was like, "Hey, how many people live here, anyways? I wonder..." Taken on its own merits, and totally ignoring all actual outfall of such a get-out-of-jail-free card, ... it would tickle me to no end if the crowdfunding worked -- however unlikely it is to do so; at just having passed €1m, it's now 1/1600th of its goal -- totally because of a bunch of other random people.
I mean, as precedent, crowdfunding your national deficit is basically the worst, and it would probably end badly (like in about three weeks when the next thing comes due), but I would really really really enjoy the shining moment of a few million people being, like, "*shrug* fuck it, why not?" and having it actually succeed.
posted by sldownard at 10:26 AM on July 1, 2015
I mean, as precedent, crowdfunding your national deficit is basically the worst, and it would probably end badly (like in about three weeks when the next thing comes due), but I would really really really enjoy the shining moment of a few million people being, like, "*shrug* fuck it, why not?" and having it actually succeed.
posted by sldownard at 10:26 AM on July 1, 2015
Varoufakis says he will quit if Greeks vote ‘Yes".
posted by progosk at 7:45 AM on July 2, 2015 [1 favorite]
posted by progosk at 7:45 AM on July 2, 2015 [1 favorite]
The IMF has just conceded a crucial point that Tsipras and Varoufakis took to Brussels: debt relief is a crucial ingredient in any future agreement to be made. That, plus substantial further funds, and a 20-year grace period before making any debt repayments, with the last not due until 2055.
Seems like Tsipras has driven a wedge between them and the other two members of the troika:
[The IMF said] its assessment had “not been agreed with the other parties in the policy discussions” – an admission that the Fund is at odds with its troika partners – the European commission and the European Central Bank – over the need for debt relief.
The Fund has traditionally viewed debt relief as an integral part of any package to improve the economic prospects of a country seeking help, but it has met resistance from European governments fearful that the cost would have to be met by their own taxpayers.
In response to criticism that the IMF has failed to tackle intransigence in European capitals against a further debt write-off, a senior IMF official said: “We are asking the Greeks to do very difficult things. We are also asking the Europeans to do something very difficult.
posted by progosk at 10:07 AM on July 2, 2015 [1 favorite]
Seems like Tsipras has driven a wedge between them and the other two members of the troika:
[The IMF said] its assessment had “not been agreed with the other parties in the policy discussions” – an admission that the Fund is at odds with its troika partners – the European commission and the European Central Bank – over the need for debt relief.
The Fund has traditionally viewed debt relief as an integral part of any package to improve the economic prospects of a country seeking help, but it has met resistance from European governments fearful that the cost would have to be met by their own taxpayers.
In response to criticism that the IMF has failed to tackle intransigence in European capitals against a further debt write-off, a senior IMF official said: “We are asking the Greeks to do very difficult things. We are also asking the Europeans to do something very difficult.
posted by progosk at 10:07 AM on July 2, 2015 [1 favorite]
We can't print drachmas, says Greece's finance minister
posted by rosswald at 12:34 PM on July 2, 2015
"We don't have the capacity," Yanis Varoufakis told Australian public radio network ABC.Seems like a pretty critical piece of information.
In 2000, the year before Greece joined the eurozone, "one of the things we had to do was get rid of all our printing presses" as part of the bloc's assertion that "this monetary union is irreversible," he said.
posted by rosswald at 12:34 PM on July 2, 2015
Wikileaks has released an alleged NSA intercept of Merkel's private conversations on Greek Bailout. Tldr EU leaders setup the bailout with an eye towards punishing Greece and keeping it in line rather than rescuing their economy.
posted by humanfont at 3:43 PM on July 2, 2015
posted by humanfont at 3:43 PM on July 2, 2015
Jeffrey Sachs, UN special advisor and author of The End of Poverty, writes a four-step proposal:
First, I recommend that the Greek people give a resounding “No” to the creditors in the referendum on their demands this weekend.
Second, Greece should continue to withhold service on its external debts to official creditors in advance of a consensual debt restructuring later this year. Given its great depression, Greece should use its savings to pay pensioners, provide food relief, make crucial infrastructure repairs, and direct liquidity toward the banking system.
Third, Prime Minister Alexis Tsipras must use his persuasive powers to convince the public, in the style of US President Franklin D. Roosevelt, that the only thing they have to fear is fear itself. Specifically, the government should make clear to all Greeks that their euro deposits are safe; that the country will remain within the eurozone (despite the false claims by some members of the Eurogroup that a no vote means a Greek exit); and that its banks will reopen immediately after the referendum.
Finally, Greece and Germany need to come to a rapprochement soon after the referendum and agree to a package of economic reforms and debt relief. No country – including Greece – should expect to be offered debt relief on a silver platter; relief must be earned and justified by real reforms that restore growth, to the benefit of both debtor and creditor. And yet, a corpse cannot carry out reforms. That is why debt relief and reforms must be offered together, not reforms “first” with some vague promises that debt relief will come in some unspecified amount at some unspecified time in the future (as some in Europe have said to Greece).
Easing Greece’s debt burden while keeping the country within the eurozone is the correct and achievable path out of the crisis, and it can be accomplished easily through a mutual accord between Germany and Greece, to which the rest of Europe will subscribe. The result would be a win not only for those countries, but also for the world economy.
posted by progosk at 6:53 AM on July 3, 2015
First, I recommend that the Greek people give a resounding “No” to the creditors in the referendum on their demands this weekend.
Second, Greece should continue to withhold service on its external debts to official creditors in advance of a consensual debt restructuring later this year. Given its great depression, Greece should use its savings to pay pensioners, provide food relief, make crucial infrastructure repairs, and direct liquidity toward the banking system.
Third, Prime Minister Alexis Tsipras must use his persuasive powers to convince the public, in the style of US President Franklin D. Roosevelt, that the only thing they have to fear is fear itself. Specifically, the government should make clear to all Greeks that their euro deposits are safe; that the country will remain within the eurozone (despite the false claims by some members of the Eurogroup that a no vote means a Greek exit); and that its banks will reopen immediately after the referendum.
Finally, Greece and Germany need to come to a rapprochement soon after the referendum and agree to a package of economic reforms and debt relief. No country – including Greece – should expect to be offered debt relief on a silver platter; relief must be earned and justified by real reforms that restore growth, to the benefit of both debtor and creditor. And yet, a corpse cannot carry out reforms. That is why debt relief and reforms must be offered together, not reforms “first” with some vague promises that debt relief will come in some unspecified amount at some unspecified time in the future (as some in Europe have said to Greece).
Easing Greece’s debt burden while keeping the country within the eurozone is the correct and achievable path out of the crisis, and it can be accomplished easily through a mutual accord between Germany and Greece, to which the rest of Europe will subscribe. The result would be a win not only for those countries, but also for the world economy.
posted by progosk at 6:53 AM on July 3, 2015
9 myths about the Greek crisis, by James K Galbraith. (For meta-historical context, his father, JK Galbraith, helped write U.S. Secretary of State Byrnes' historic Speech of Hope in 1946.)
posted by progosk at 9:18 AM on July 4, 2015
posted by progosk at 9:18 AM on July 4, 2015
Purported blow-by-blow of the straw that broke the camel's back for Tsipras and Varoufakis, last Friday.
posted by progosk at 3:12 AM on July 5, 2015 [1 favorite]
posted by progosk at 3:12 AM on July 5, 2015 [1 favorite]
Metafilter has been surprisingly quiet lately about this whole 'Grexit' and the referendum. I wonder if someone is preparing a post for the day before.
Anyway, here's a piece that I enjoyed among the many thinkpieces out there: No Exit (Nikil Saval, Stephen Squibb). It's a little overheated in the usual n+1 way, and I'm sure one can find much to deride in the various analogies, but I think it's a good read.
[...] Nationalism is thus is not so much taken up by a group of people as it is forced upon them by an international economy in search of a mechanism for allocating the damage done by its own inevitable crises. The nation-state solves this problem so efficiently, from capital’s point of view, that it sometimes seems to have been invented for precisely this purpose. [...]
[...] The Greek referendum is not only a demonstration of democracy in practice, it is also an effort to save democracy in theory—that is, to distribute the responsibility for the inevitable fallout from leaving the euro as widely across the political spectrum as possible. [...]
posted by Peter J. Prufrock at 3:15 AM on July 5, 2015 [1 favorite]
Anyway, here's a piece that I enjoyed among the many thinkpieces out there: No Exit (Nikil Saval, Stephen Squibb). It's a little overheated in the usual n+1 way, and I'm sure one can find much to deride in the various analogies, but I think it's a good read.
[...] Nationalism is thus is not so much taken up by a group of people as it is forced upon them by an international economy in search of a mechanism for allocating the damage done by its own inevitable crises. The nation-state solves this problem so efficiently, from capital’s point of view, that it sometimes seems to have been invented for precisely this purpose. [...]
[...] The Greek referendum is not only a demonstration of democracy in practice, it is also an effort to save democracy in theory—that is, to distribute the responsibility for the inevitable fallout from leaving the euro as widely across the political spectrum as possible. [...]
posted by Peter J. Prufrock at 3:15 AM on July 5, 2015 [1 favorite]
Oh nuts, I forgot it was today. Wow. I guess I ought to look up a liveblog.
posted by Peter J. Prufrock at 4:47 AM on July 5, 2015
posted by Peter J. Prufrock at 4:47 AM on July 5, 2015
Live blogs:
UK Telegraph
UK Guardian
Fortune
Atlantic
RT
Twitter:
Paul Mason
Yanis Varoufakis
Alexis Tsipras
posted by Noisy Pink Bubbles at 7:36 AM on July 5, 2015
UK Telegraph
UK Guardian
Fortune
Atlantic
RT
Twitter:
Paul Mason
Yanis Varoufakis
Alexis Tsipras
posted by Noisy Pink Bubbles at 7:36 AM on July 5, 2015
It's only a beer commercial but - here's hoping their spirit's not extinguished today.
Shot in Ikaria, a bastion of leftist thought - at least since early communists were banished there - the spot is referring to the island's still-strong tradition of panigiri. Mythos was, briefly, an exemplification of autochthonous spirit - the brewery that had been founded by a German parent company, was taken over in 1992 by Greek investors who, with the Mythos brand, established a successful nationally produced beer for a decade. In 2004 ownership began to change hands - and it's now a subsidiary of Danish parent company Carlsberg.)
posted by progosk at 7:45 AM on July 5, 2015
Shot in Ikaria, a bastion of leftist thought - at least since early communists were banished there - the spot is referring to the island's still-strong tradition of panigiri. Mythos was, briefly, an exemplification of autochthonous spirit - the brewery that had been founded by a German parent company, was taken over in 1992 by Greek investors who, with the Mythos brand, established a successful nationally produced beer for a decade. In 2004 ownership began to change hands - and it's now a subsidiary of Danish parent company Carlsberg.)
posted by progosk at 7:45 AM on July 5, 2015
Well, the polls are closed. Informal polling suggests No will win by a small margin, according to the liveblogs. I wonder if anyone knew it would be so close. Still a little surprised at the lack of US coverage on this; but then again, no one really knows what's going on and what the outcomes will be in either case, not even Greeks.
(Apropos of nothing, did anyone else see the film No about the Chilean vote over Pinochet? Great film.)
posted by Peter J. Prufrock at 9:16 AM on July 5, 2015
(Apropos of nothing, did anyone else see the film No about the Chilean vote over Pinochet? Great film.)
posted by Peter J. Prufrock at 9:16 AM on July 5, 2015
I'm glad you posted both the Galbraith and NYT pieces, progosk -- I had thought about adding the NYT one to this thread when I read it the other day. It's an exception to the majority of the NYT's coverage, in keeping with most mainstream coverage, which has hewed to the very anti-Syriza narrative that has really amazed me in how distorted it is and how much it's conventional wisdom.
It reminds me, as if I really needed reminding, how much the mainstream media (NA and Europe alike) is so heavily beholden to a number of supposedly credible sources who build a narrative while no one really thinks much about who those sources are and where their own interests lie. I'm channeling Krugman here, but it's very reminiscent to me of what the media reported about WMDs in Iraq, what the media reports about the ever-imminent Social Security funding crisis, and the like.
Anyway, although until recently I was inclined to think that the result of the referendum will be "no" I've now decided that it's most likely going to be "yes", but by a small margin.
This is all sort of baked-in at this point. I thought the result would be "no" because it's true, just as it's long been true, that the Greek people are rightly unhappy about the terms being forced upon them by the creditors. That's why Syriza came into power, after all. But although a strong majority are unhappy with the troika, it's never been the case that the majority really likes or trusts Syriza. And, furthermore and most importantly, the majority strongly is opposed to leaving the euro.
So, as I wrote before, there's moderately strong opposition to the deal, but even stronger opposition to leaving the euro. But only mild support, at most, for Syriza. In that context, and even though Tsipras has repeatedly said that a "no" isn't a vote to leave the euro (and it's not, truly), the troika has built a overwhelming narrative that a "no" vote would, in fact, be equivalent to leaving the euro. So, at this point, there's going to be a lot of greeks who think that "yes" is the lesser of two evils.
Furthermore, because Syriza has been in this position of opposing the troika but clearly saying they don't intend to leave the euro, then Syriza doesn't actually have any bargaining power against the troika! That's why the troika has taken such a hard line generally and that's why they've taken a hard line in response to the announcement of the referendum. The troika knows that with a "no" vote, the ECB will continue to throttle the banks and there's no quick and easy way that Syriza could default on the debt and leave the euro .. and that's assuming that the government would actually manage to survive an attempt to do this. A "no" vote will most likely in then force Greece back to the negotating table, but with a different, more troika-friendly government. And of course a "yes" vote gives the troika exactly what it wants -- an agreement the deal they've previously offered and discrediting Syriza and most likely causing it to fall. So from the troika's perspective, a "yes" is great, and "no" isn't so bad, either -- it runs a relatively small risk of default and grexit but would most likely results in the fall of Syriza, anyway, and a return to the negotiating table by a new government (and a greek people who are truly desperate).
That isn't the optimal outcome either way, because the economic reality is that Syriza is absolutely in the right about this. Austerity is killing the economy and there needs to be debt relief -- now the IMF is explicitly saying this about debt relief, and so are many others. Everyone's known this, but no one on the troika side of things has been saying so because the political reality in most of Europe, but especially Germany, is that any more debt relief is unacceptable. The narrative was set a long time ago -- that all of these problems, worldwide, are the result of sovereign debt irresponsibility, the Greeks are the worst example of this, and any and all loans that have been made in the past and might be made in the future are grudging charity loans that absolutely, positively, cannot encourage any more moral hazard (and therefore conditions upon the lending need to be -- practically and morally -- onerous). In that profoundly biased and almost entirely false narrative, there is no reason or room to negotiate with Syriza or to further write-off any of that old debt. So Merkel and the rest couldn't have done anything other than what they've done -- their choices are determined by their own domestic politics, not what's best for the EU in general, and certainly not what's best for Greece.
So the point is that the EU and ECB, two of the three parts of the troika, have always had to take the hardest line possible and especially so in response to the new Syriza government because in the narrative, these are basically villains who ought to be punished and help that's offered is only out of practical necessity. And, likewise, because the greek people are unhappy with the troika and these lending terms, but also because they're unwilling to default and leave the euro, then Syriza's only real option has been to bluff even though the toika knows they're bluffing. Grexit has never been anything other than a small possibility. As I wrote in my previous comment, default without grexit will just be deep and unrelenting misery for the greeks and will cause Syriza to fall and eventually force Greek back to the negotiating table.
For awhile, I thought that because the opposition to the troika is quite strong, the referendum result would be "no". And that's possible. But, per what I just wrong, even if that's the result, it's not likely that the troika will respond in the way that Syriza is hoping it will. It should. And there's a moderate chance that it might, at the prodding of the IMF and some other parties who aren't beholden to, say, German voters. But I think it's more likely that it would stand firm and wait for Syriza to fall. I don't know how many of the greek voters see things this way, but I think that some do and many more intuitively understand that absent grexit, Syriza doesn't actually have any leverage. With the ECB throttling the banks, and a slow bank-run already in progress, the greek people are frightened. That's going to create a lot of pressure to vote "yes". And, remember, it's not that there's ever been huge support for Syriza itself.
So I think the result is going to be a "yes" by a small margin. Varoufakis will resign and the troika will happily go back to the negotiating table, the ECB will start backstopping the banks again, the deal will be accepted as-is or a slightly modified one will be, and then later Syriza will fall. This won't be a good outcome for Greece, as what it really needs is a deal like one that Syriza has been asking for. But it will be a better outcome than "no" without grexit, and in the short to medium term at least, a better outcome than a "no" with grexit.
posted by Ivan Fyodorovich at 9:20 AM on July 5, 2015 [2 favorites]
It reminds me, as if I really needed reminding, how much the mainstream media (NA and Europe alike) is so heavily beholden to a number of supposedly credible sources who build a narrative while no one really thinks much about who those sources are and where their own interests lie. I'm channeling Krugman here, but it's very reminiscent to me of what the media reported about WMDs in Iraq, what the media reports about the ever-imminent Social Security funding crisis, and the like.
Anyway, although until recently I was inclined to think that the result of the referendum will be "no" I've now decided that it's most likely going to be "yes", but by a small margin.
This is all sort of baked-in at this point. I thought the result would be "no" because it's true, just as it's long been true, that the Greek people are rightly unhappy about the terms being forced upon them by the creditors. That's why Syriza came into power, after all. But although a strong majority are unhappy with the troika, it's never been the case that the majority really likes or trusts Syriza. And, furthermore and most importantly, the majority strongly is opposed to leaving the euro.
So, as I wrote before, there's moderately strong opposition to the deal, but even stronger opposition to leaving the euro. But only mild support, at most, for Syriza. In that context, and even though Tsipras has repeatedly said that a "no" isn't a vote to leave the euro (and it's not, truly), the troika has built a overwhelming narrative that a "no" vote would, in fact, be equivalent to leaving the euro. So, at this point, there's going to be a lot of greeks who think that "yes" is the lesser of two evils.
Furthermore, because Syriza has been in this position of opposing the troika but clearly saying they don't intend to leave the euro, then Syriza doesn't actually have any bargaining power against the troika! That's why the troika has taken such a hard line generally and that's why they've taken a hard line in response to the announcement of the referendum. The troika knows that with a "no" vote, the ECB will continue to throttle the banks and there's no quick and easy way that Syriza could default on the debt and leave the euro .. and that's assuming that the government would actually manage to survive an attempt to do this. A "no" vote will most likely in then force Greece back to the negotating table, but with a different, more troika-friendly government. And of course a "yes" vote gives the troika exactly what it wants -- an agreement the deal they've previously offered and discrediting Syriza and most likely causing it to fall. So from the troika's perspective, a "yes" is great, and "no" isn't so bad, either -- it runs a relatively small risk of default and grexit but would most likely results in the fall of Syriza, anyway, and a return to the negotiating table by a new government (and a greek people who are truly desperate).
That isn't the optimal outcome either way, because the economic reality is that Syriza is absolutely in the right about this. Austerity is killing the economy and there needs to be debt relief -- now the IMF is explicitly saying this about debt relief, and so are many others. Everyone's known this, but no one on the troika side of things has been saying so because the political reality in most of Europe, but especially Germany, is that any more debt relief is unacceptable. The narrative was set a long time ago -- that all of these problems, worldwide, are the result of sovereign debt irresponsibility, the Greeks are the worst example of this, and any and all loans that have been made in the past and might be made in the future are grudging charity loans that absolutely, positively, cannot encourage any more moral hazard (and therefore conditions upon the lending need to be -- practically and morally -- onerous). In that profoundly biased and almost entirely false narrative, there is no reason or room to negotiate with Syriza or to further write-off any of that old debt. So Merkel and the rest couldn't have done anything other than what they've done -- their choices are determined by their own domestic politics, not what's best for the EU in general, and certainly not what's best for Greece.
So the point is that the EU and ECB, two of the three parts of the troika, have always had to take the hardest line possible and especially so in response to the new Syriza government because in the narrative, these are basically villains who ought to be punished and help that's offered is only out of practical necessity. And, likewise, because the greek people are unhappy with the troika and these lending terms, but also because they're unwilling to default and leave the euro, then Syriza's only real option has been to bluff even though the toika knows they're bluffing. Grexit has never been anything other than a small possibility. As I wrote in my previous comment, default without grexit will just be deep and unrelenting misery for the greeks and will cause Syriza to fall and eventually force Greek back to the negotiating table.
For awhile, I thought that because the opposition to the troika is quite strong, the referendum result would be "no". And that's possible. But, per what I just wrong, even if that's the result, it's not likely that the troika will respond in the way that Syriza is hoping it will. It should. And there's a moderate chance that it might, at the prodding of the IMF and some other parties who aren't beholden to, say, German voters. But I think it's more likely that it would stand firm and wait for Syriza to fall. I don't know how many of the greek voters see things this way, but I think that some do and many more intuitively understand that absent grexit, Syriza doesn't actually have any leverage. With the ECB throttling the banks, and a slow bank-run already in progress, the greek people are frightened. That's going to create a lot of pressure to vote "yes". And, remember, it's not that there's ever been huge support for Syriza itself.
So I think the result is going to be a "yes" by a small margin. Varoufakis will resign and the troika will happily go back to the negotiating table, the ECB will start backstopping the banks again, the deal will be accepted as-is or a slightly modified one will be, and then later Syriza will fall. This won't be a good outcome for Greece, as what it really needs is a deal like one that Syriza has been asking for. But it will be a better outcome than "no" without grexit, and in the short to medium term at least, a better outcome than a "no" with grexit.
posted by Ivan Fyodorovich at 9:20 AM on July 5, 2015 [2 favorites]
I see that opinion polls are showing a slight "no" margin, which surprises me. I guess since I've predicted both outcomes, I'm safe. :) If the result is "no", I'll be surprised that sentiment against the troika has outweighed fear -- but I completely endorse that position.
Syriza seems confident that a "no' will be followed by an immediate return to the negotiating table.
The big thing I didn't include in my analysis was, well, the credibility resulting from a democratic mandate for refusing the deal. Syriza can rightly say without any ambiguity that not only can it not accept this deal, but that any future, non-Syriza government won't be able to accept it, either. So while the troika hates Syriza, dealing with a different government won't solve the problem. Well, it would ... eventually. The troika could just let Greece collapse and, sooner or later, they'd have to leave the euro or capitulate to the troika. It's not at all clear to me that there's isn't a large domestic constituency in Germany and elsewhere that greatly prefers that result, even though it would mean Greek default. This is a morality play in the popular narrative. So to the degree to which Merkel and others are beholden to that constituency, is the degree to which they might be willing to play chicken and never flinch aside.
On the other hand, the IMF has already blinked and a whole lot of other interests, not the least the US, are going to be very unhappy about a total collapse of the Greek economy and a possible grexit. This is almost certainly what Syriza has been hoping for from a "no" result. Those interests and, perhaps, just a larger sense of European shared responsibility might mean that the troika would compromise with a new deal in the wake of a "no" result.
I know I've been waffling, but it's one of those weird things where both extremes make a whole lot of sense -- there's powerful forces pushing a hardline position from the troika, but equally powerful forces against a Greek default and exit from the euro.
posted by Ivan Fyodorovich at 9:46 AM on July 5, 2015
Syriza seems confident that a "no' will be followed by an immediate return to the negotiating table.
The big thing I didn't include in my analysis was, well, the credibility resulting from a democratic mandate for refusing the deal. Syriza can rightly say without any ambiguity that not only can it not accept this deal, but that any future, non-Syriza government won't be able to accept it, either. So while the troika hates Syriza, dealing with a different government won't solve the problem. Well, it would ... eventually. The troika could just let Greece collapse and, sooner or later, they'd have to leave the euro or capitulate to the troika. It's not at all clear to me that there's isn't a large domestic constituency in Germany and elsewhere that greatly prefers that result, even though it would mean Greek default. This is a morality play in the popular narrative. So to the degree to which Merkel and others are beholden to that constituency, is the degree to which they might be willing to play chicken and never flinch aside.
On the other hand, the IMF has already blinked and a whole lot of other interests, not the least the US, are going to be very unhappy about a total collapse of the Greek economy and a possible grexit. This is almost certainly what Syriza has been hoping for from a "no" result. Those interests and, perhaps, just a larger sense of European shared responsibility might mean that the troika would compromise with a new deal in the wake of a "no" result.
I know I've been waffling, but it's one of those weird things where both extremes make a whole lot of sense -- there's powerful forces pushing a hardline position from the troika, but equally powerful forces against a Greek default and exit from the euro.
posted by Ivan Fyodorovich at 9:46 AM on July 5, 2015
Your phrase above
because Syriza has been in this position of opposing the troika but clearly saying they don't intend to leave the euro, then Syriza doesn't actually have any bargaining power against the troika
is the diametrical opposite to what Tsipras and Varoufakis have staked out as their position, namely that 1. the referendum is part of the negotiating process and 2. a No will endow them with greater powers when they go back to the table. Do you see their take as illusory, a tragic miscalculation?
I'm finding it extremely challenging to work out how this might all play out, but so far it's seemed that Syriza has done some deep thinking about their moves.
posted by progosk at 10:13 AM on July 5, 2015
because Syriza has been in this position of opposing the troika but clearly saying they don't intend to leave the euro, then Syriza doesn't actually have any bargaining power against the troika
is the diametrical opposite to what Tsipras and Varoufakis have staked out as their position, namely that 1. the referendum is part of the negotiating process and 2. a No will endow them with greater powers when they go back to the table. Do you see their take as illusory, a tragic miscalculation?
I'm finding it extremely challenging to work out how this might all play out, but so far it's seemed that Syriza has done some deep thinking about their moves.
posted by progosk at 10:13 AM on July 5, 2015
Wow geez the first official poll results show a huge margin for No (60-40). We'll see...
posted by Peter J. Prufrock at 10:22 AM on July 5, 2015
posted by Peter J. Prufrock at 10:22 AM on July 5, 2015
"Do you see their take as illusory, a tragic miscalculation?"
I think I answered this a bit with my second comment.
Syriza is seeing this from the perspective of having a mandate from the voters to reject the proposed deal. And that does, in fact, strengthen their bargaining position relative to not having that mandate.
But it doesn't help in that all this does is shift the responsibility for "no" from Syriza to the Greek people while not at all changing the calculus of the benefits of a deal versus the costs of no deal.
Is this a miscalculation? I think that's entirely a function of those other forces at work that will push for a deal -- the IMF, fears about European integration, fears about the European and thus the global economy. To the degree to which those just really, really want to stay away from grexit and therefore are very alarmed at this point (when maybe they weren't so worried in the past), is the degree to which those forces are likely to push the troika back to the negotiating table in the wake of a "no" vote.
But the thing is, given that Greece doesn't want to leave the euro, there's no quick or easy way that Greece could leave the euro, it would require the Greek government to affirmatively decide to leave the euro and Syriza arguably wouldn't withstand that debate, and that meanwhile the Greek economy will be totally collapsing and the population becoming more desperate (and seeing the weeks before the referendum as relatively good), then there's very good reason to believe that if the troika refuses to re-negotiate the deal, Greece will eventually capitulate.
Is that what will happen? If you look at the domestic politics all across Europe, especially in the north, you see a deep disgust at Greece and I promise that it will only increase in the wake of a "no" result. Merkel and others will be under a huge amount of pressure to not deal at all. Or, put differently, they'll have a lot of political cover for taking a hard line on it. So I can easily see that being the outcome, where after a "no" result there are weeks of the troika refusing to negotiate, the banks continuing to being closed, and just economic disaster until Greece capitulates, one way or another. Or, alternatively, ends up leaving the euro. And so, yeah, in that event this will have been a deeply tragic miscalculation.
But maybe Tsipras and others have been hearing from other people -- like the IMF and the US -- that a lot of pressure will be put on the troika to avoid the possibility of a grexit and, after all, Greece has only asked for some minor modifications to the proposed deal plus some immediate talks about debt relief. If the IMF and the US started issuing dire pronouncements about the doom that would follow from grexit and such and telling everyone that they need to be back at the negotiating table, you can be sure that everyone would be back at the negotiating table. I think that this, in combination with just being desperate in the face of the troika's intransigence and wanting the legitimacy of a popular mandate, is why Syriza choose to take this risk.
Pretty much anything that is courageously taking a big risk for a big benefit is the same thing as a tragic miscalculation, depending upon the outcome.
posted by Ivan Fyodorovich at 11:13 AM on July 5, 2015
I think I answered this a bit with my second comment.
Syriza is seeing this from the perspective of having a mandate from the voters to reject the proposed deal. And that does, in fact, strengthen their bargaining position relative to not having that mandate.
But it doesn't help in that all this does is shift the responsibility for "no" from Syriza to the Greek people while not at all changing the calculus of the benefits of a deal versus the costs of no deal.
Is this a miscalculation? I think that's entirely a function of those other forces at work that will push for a deal -- the IMF, fears about European integration, fears about the European and thus the global economy. To the degree to which those just really, really want to stay away from grexit and therefore are very alarmed at this point (when maybe they weren't so worried in the past), is the degree to which those forces are likely to push the troika back to the negotiating table in the wake of a "no" vote.
But the thing is, given that Greece doesn't want to leave the euro, there's no quick or easy way that Greece could leave the euro, it would require the Greek government to affirmatively decide to leave the euro and Syriza arguably wouldn't withstand that debate, and that meanwhile the Greek economy will be totally collapsing and the population becoming more desperate (and seeing the weeks before the referendum as relatively good), then there's very good reason to believe that if the troika refuses to re-negotiate the deal, Greece will eventually capitulate.
Is that what will happen? If you look at the domestic politics all across Europe, especially in the north, you see a deep disgust at Greece and I promise that it will only increase in the wake of a "no" result. Merkel and others will be under a huge amount of pressure to not deal at all. Or, put differently, they'll have a lot of political cover for taking a hard line on it. So I can easily see that being the outcome, where after a "no" result there are weeks of the troika refusing to negotiate, the banks continuing to being closed, and just economic disaster until Greece capitulates, one way or another. Or, alternatively, ends up leaving the euro. And so, yeah, in that event this will have been a deeply tragic miscalculation.
But maybe Tsipras and others have been hearing from other people -- like the IMF and the US -- that a lot of pressure will be put on the troika to avoid the possibility of a grexit and, after all, Greece has only asked for some minor modifications to the proposed deal plus some immediate talks about debt relief. If the IMF and the US started issuing dire pronouncements about the doom that would follow from grexit and such and telling everyone that they need to be back at the negotiating table, you can be sure that everyone would be back at the negotiating table. I think that this, in combination with just being desperate in the face of the troika's intransigence and wanting the legitimacy of a popular mandate, is why Syriza choose to take this risk.
Pretty much anything that is courageously taking a big risk for a big benefit is the same thing as a tragic miscalculation, depending upon the outcome.
posted by Ivan Fyodorovich at 11:13 AM on July 5, 2015
Wow, totally didn't see a 60/40 split coming - this is a personal win for Tsipras.
posted by Dr Dracator at 11:17 AM on July 5, 2015
posted by Dr Dracator at 11:17 AM on July 5, 2015
Also, looking at the shock about a "no" result tells me that there will be a lot of global and financial pressure on the troika to negotiate. This is what Syriza was hoping for.
But, on the other hand, I think we're going to see intense anger and disgust against Greece throughout Europe, especially in the north.
This is going to pit the financial markets and the IMF against Schäuble and Merkel, with the ECB caught in the middle.
"Wow, totally didn't see a 60/40 split coming - this is a personal win for Tsipras."
Yeah, I'm amazed and pleased about this. I'm not totally amazed, because this is the result I would have predicted a week or two ago. There is very deep anger at the troika. And, importantly, the referendum literally wasn't a referendum on grexit, regardless of the rhetoric outside Greece. It was a referendum on a bad deal that ought to be rejected. But over the last week, as I read here in anglophone media about the media coverage in Greece, it sounded like there was wall-to-wall propoganda that a "no" would be an economic disaster. Plus, there's something pretty eye-opening about a slow-motion bank run and the banks being closed.
I guess I'm more accustomed to seeing people's fears end up being the deciding factor in voting. A "yes" vote would in essence be a vote for the awful status quo ... but a "no" vote is a vote for a very uncertain future that is very likely to be worse, at least in the short term. So I'm very surprised to see people willing to risk it. But, on the other hand, that's sort of a demonstration of how desperate people in Greece feel -- when things are really bad, people are more willing to risk uncertain change in the hopes that things will improve.
posted by Ivan Fyodorovich at 11:28 AM on July 5, 2015
But, on the other hand, I think we're going to see intense anger and disgust against Greece throughout Europe, especially in the north.
This is going to pit the financial markets and the IMF against Schäuble and Merkel, with the ECB caught in the middle.
"Wow, totally didn't see a 60/40 split coming - this is a personal win for Tsipras."
Yeah, I'm amazed and pleased about this. I'm not totally amazed, because this is the result I would have predicted a week or two ago. There is very deep anger at the troika. And, importantly, the referendum literally wasn't a referendum on grexit, regardless of the rhetoric outside Greece. It was a referendum on a bad deal that ought to be rejected. But over the last week, as I read here in anglophone media about the media coverage in Greece, it sounded like there was wall-to-wall propoganda that a "no" would be an economic disaster. Plus, there's something pretty eye-opening about a slow-motion bank run and the banks being closed.
I guess I'm more accustomed to seeing people's fears end up being the deciding factor in voting. A "yes" vote would in essence be a vote for the awful status quo ... but a "no" vote is a vote for a very uncertain future that is very likely to be worse, at least in the short term. So I'm very surprised to see people willing to risk it. But, on the other hand, that's sort of a demonstration of how desperate people in Greece feel -- when things are really bad, people are more willing to risk uncertain change in the hopes that things will improve.
posted by Ivan Fyodorovich at 11:28 AM on July 5, 2015
Guardian live blog is reporting the youth vote was 2 to 1 in favor of no.
Also, about the results, may I comment: FUCK YEAH. The second vote in favor of SYRIZA and giving the troika the rejection it deserves.
posted by Noisy Pink Bubbles at 12:13 PM on July 5, 2015 [2 favorites]
Also, about the results, may I comment: FUCK YEAH. The second vote in favor of SYRIZA and giving the troika the rejection it deserves.
posted by Noisy Pink Bubbles at 12:13 PM on July 5, 2015 [2 favorites]
Metafilter has been surprisingly quiet lately about this whole 'Grexit' and the referendum.
That it's been quiet is mainly to do with the fact that the FPP is over two weeks old, but - yeah, it's felt a little lonely out here. This is the stuff of history books, folks!
posted by progosk at 12:25 PM on July 5, 2015 [2 favorites]
That it's been quiet is mainly to do with the fact that the FPP is over two weeks old, but - yeah, it's felt a little lonely out here. This is the stuff of history books, folks!
posted by progosk at 12:25 PM on July 5, 2015 [2 favorites]
Yeah, I was just surprised that there hadn't been another FPP since. But with this No result, I'm sure another one is just around the corner...
posted by Peter J. Prufrock at 12:29 PM on July 5, 2015
posted by Peter J. Prufrock at 12:29 PM on July 5, 2015
I'm expecting to see some tension and sniping between those who want to negotiate and those who want to make Greece suffer.
posted by Ivan Fyodorovich at 1:11 PM on July 5, 2015
posted by Ivan Fyodorovich at 1:11 PM on July 5, 2015
That it's been quiet is mainly to do with the fact that the FPP is over two weeks old, but - yeah, it's felt a little lonely out here. This is the stuff of history books, folks!
I recently wrote a MeTa for the idea of some sort of mechanism for bringing open threads that are old but with important new information back onto the front page or some sort of "notable updates" feature. It was a decidedly unpopular proposal. The Scottish referendum thread is a paltry discussion after the referendum itself, and I expect this thread to go the same way, though I'm very keen on hearing more discussion on this that isn't on crappy unmoderated sites like reddit.
In absence of some sort of mechanism for that, I'd like to see a new FPP based on this development, but anyone who does is likely to have it deleted.
posted by chimaera at 1:30 PM on July 5, 2015
I recently wrote a MeTa for the idea of some sort of mechanism for bringing open threads that are old but with important new information back onto the front page or some sort of "notable updates" feature. It was a decidedly unpopular proposal. The Scottish referendum thread is a paltry discussion after the referendum itself, and I expect this thread to go the same way, though I'm very keen on hearing more discussion on this that isn't on crappy unmoderated sites like reddit.
In absence of some sort of mechanism for that, I'd like to see a new FPP based on this development, but anyone who does is likely to have it deleted.
posted by chimaera at 1:30 PM on July 5, 2015
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This thread has been archived and is closed to new comments
At any rate I think that this proves that you can't just take two radically different economies - Greece and Germany - and force them to share a currency and make it work. France and Germany, sure. But sharing the euro has basically tied a freight train to a donkey cart and they keep telling the donkey to run faster and lose more weight neither of which is going to fix the situation.
posted by GuyZero at 11:14 AM on June 18, 2015 [15 favorites]