Greece, what the fuck?

[Jayjay]

Welp, Greek banks are closed for the next 6 days pending a referendum about whether or not Greeks want to stay in the EU.

I hope they vote no and are able to regain control of their own currency so they can start getting their economy back on track so people don't have to suffer much longer.

tl;dr: fuck the EU

The beauty of the referendum is that it's not explicitly about leaving Euro (or EU). Majority of the Greek would probably prefer to stay in both. What the refendum is going to be is whether the troika's demands to Greece are reasonable, and the clear answer to that question is going to be an overwhelming negative, even if it in all likelihood will lead to Greece leaving Euro. That's the master tactic of the Tsipras government and Varoufakis in particular.

Foreign media is wondering what the heck Tispras has been smoking when he's tweeting about the referendum giving Greece a better negotiation position, when negotiations are pretty much over already. But I think that Tsipras knows exactly what he's doing.

 

[Jayjay]

You need to drop an IM to Tsipras and tell him it's OK, he can stop asking for money.

Sure thing, as soon as your ECB buddies stop asking Tsipras for the money he needs help paying back.

Tsipras is the one asking for 7.2B euro from the troika due under the bailout agreement, the agreement which Tsipras says Greece will no longer honor.

Is he asking for 7.2B euros?

Isn't what he's asking for to be used to help make the debt payments being demanded?

According to this graphic from BBC, most of the money would go to paying "short term bills" rather than debt repayments. I am not sure what that means exactly, and are they the kind of bills that Greece can afford not to pay without severe and immediate consequences:

 

[untermensche]

If racking up massive Keynsey Debts were the true key to prosperity, Greece must be superprosperous already.

You clearly don't have the slightest clue what Keynes wrote about stimulating an economy during an economic downturn.

He suggested government spending that actually reaches working people.

Not demands that more government spending go to the banks.

 

[Perspicuo]

The Greek financial crisis, explained in fewer than 500 words
http://www.vox.com/2015/6/29/8862583/greek-financial-crisis-explained

When Greece joined the euro in 2001, confidence in the Greek economy grew and a big economic boom followed. But after the 2008 financial crisis, everything changed. Every country in Europe entered a recession, but because Greece was one of the poorest and most indebted countries, it suffered the most. The unemployment rate reached 28 percent in 2013, worse than the United States suffered during the Great Depression.

If Greece wasn't in the euro, it could have boosted its economy by printing more of its currency, the drachma. This would have lowered the value of the drachma in international markets, making Greek exports more competitive. It would also lower domestic interest rates, encouraging domestic investment and making it easier for Greek debtors to service their debts.

But Greece shares its monetary policy with the rest of Europe. And the German-dominated European Central Bank has given Europe a monetary policy that's about right for Germany, but so tight that it has thrust Greece into a depression.

It's not an American thing (as the Great Recession would make you think). Big banks really are ravenous thieves, and governments their faithful whores.

 

[jonatha]

I believe much of the 'short term bills' represents payment of public pensions (akin to Social Security in the US)

 

[DrZoidberg]

It´s more complicated. There´s a very unhelpful Greek culture of anti-establishment and assuming that the government are corrupt. Which it also is. Greek officials have a long history of cooking the books. So all the numbers used by the Greek finance ministry have always been unreliable. So it´s like a sport to avoid paying taxes in Greece. Pretty much the only people who pay their taxes like they should are government employees. So in the minds of the Greeks it was the corrupt ruling class who got them into this mess. So they don´t see why they should be stuck with the bill.

If I´ve understood the situation it´s like they think that it´s the rest of Europes fault for lending them the money (2008 -) which allowed Greece to run up this much deficit. Historically Greece has amassed about as much debt as lenders will allow them to. This was also true back in the days of the Greek junta. The Greek people see the European central bank as being in bed with the corrupt Greek politicians who got them into this mess, and that it´s all just one big elaborate scam to screw them over some more. Tsipras was elected to hold that position. They want the European central bank to admit they have part of the responsibility and compromise with them. Which they won´t.

Italy, Spain and Turkey also have this very unhelpful tax-dodging culture. It´s a legacy from the fascist regimes that have ruled them. Since West and Northern Europe are cultures where the civic system seems to be working we have trouble understanding each other. Basically, the Greeks think we´re dicks, and we think the Greeks are dicks. This is why the negotiations are stalling.

Then a break is the only solution. There's no such thing as a clean break, not even when bones are involved. It's always hurts.

I don´t think so. I think Greece is better off in the EU. Greek politicians seem to require a governmental layer above them holding the reigns tightly and whipping/keeping them in line fiscally. Greeks won´t start paying taxes until their politicians show they can be trusted with their money. Over time this will develop a healthy monetary culture that sustains itself. But as for now... nah. Sure, maybe they´ll sort this out on their own in time. But that´ll take half a century minimum. Better with the EU-shock treatment. Pain once, and then it´s good.

 

[Jokodo]

Then a break is the only solution. There's no such thing as a clean break, not even when bones are involved. It's always hurts.

I don´t think so. I think Greece is better off in the EU. Greek politicians seem to require a governmental layer above them holding the reigns tightly and whipping/keeping them in line fiscally. Greeks won´t start paying taxes until their politicians show they can be trusted with their money. Over time this will develop a healthy monetary culture that sustains itself. But as for now... nah. Sure, maybe they´ll sort this out on their own in time. But that´ll take half a century minimum. Better with the EU-shock treatment. Pain once, and then it´s good.

If the EU were being reasonable, maybe. Not if that shock treatment entails draining 3,5-4,5% from an economy already in recession, which basically means no reinvestment and thus the infrastructure going to waste, turning Greece into a third world country.

 

[arkirk]

I'm not convinced that Greece is running a primary surplus. It has cooked the books before, and is probably cooking the books now.

But even if Greece was running a primary surplus, that was during the last government. Is that still the case with Syriza being in charge and reverting many of the austerity measures?

Yeah, at this point I wouldn't trust Greece to make change for a $1. They want to continue to live on borrowed money and aren't interested in addressing their economic problems.

All of this owed money is a fiction too. Supposing a corrupt government borrows a lot of money and then does not spend it on the people, instead skimming it ten thousand ways to sunday and stealing it. Now along comes the lender and says pay up. The people really didn't borrow all that money. The U. S. has a debt over 15 trillion dollars. I have received almost none of that money. My cut should have been perhaps a couple of million. So we know our national debt too is a fiction. Now here you come not trusting only foreigners. Your real problem is that you wouldn't trust anybody for any reason. That pretty much makes you a paranoid. You paint such awful pictures of people who are Arab or black or Greek or socialist or communist or anything you are not. That is very much a reality you need to deal with. Some professional help might be good. A lot of your fears of other types comes from knowing your own contempt for others and projecting that on others.

 

[bilby]

Yeah, at this point I wouldn't trust Greece to make change for a $1. They want to continue to live on borrowed money and aren't interested in addressing their economic problems.

All of this owed money is a fiction too. Supposing a corrupt government borrows a lot of money and then does not spend it on the people, instead skimming it ten thousand ways to sunday and stealing it. Now along comes the lender and says pay up. The people really didn't borrow all that money. The U. S. has a debt over 15 trillion dollars. I have received almost none of that money. My cut should have been perhaps a couple of million. So we know our national debt too is a fiction. Now here you come not trusting only foreigners. Your real problem is that you wouldn't trust anybody for any reason. That pretty much makes you a paranoid. You paint such awful pictures of people who are Arab or black or Greek or socialist or communist or anything you are not. That is very much a reality you need to deal with. Some professional help might be good. A lot of your fears of other types comes from knowing your own contempt for others and projecting that on others.

If you really think that the US Government hasn't spent a couple of million bucks on infrastructure you use, you probably need to open your eyes wider.

They don't have US standard schools, roads, police and defence forces, etc. etc., in Tanzania; that's the quality of life you could expect if you didn't have those two million bucks spent for your convenience.

Ignoring the things they are given, and then claiming that you got nothing seems to be an American trait.

It must be nice to have so much stuff that you don't even notice that you have it.

 

[DrZoidberg]

I don´t think so. I think Greece is better off in the EU. Greek politicians seem to require a governmental layer above them holding the reigns tightly and whipping/keeping them in line fiscally. Greeks won´t start paying taxes until their politicians show they can be trusted with their money. Over time this will develop a healthy monetary culture that sustains itself. But as for now... nah. Sure, maybe they´ll sort this out on their own in time. But that´ll take half a century minimum. Better with the EU-shock treatment. Pain once, and then it´s good.

If the EU were being reasonable, maybe. Not if that shock treatment entails draining 3,5-4,5% from an economy already in recession, which basically means no reinvestment and thus the infrastructure going to waste, turning Greece into a third world country.

There´s arguments for both. But being inside the EU gives access to lots of capital they otherwise wouldn´t have as readily available. Being inside the EU means lots of rules. Rules give security.

The EU hard line they have now has taken a while to get like this. Greece has taken the rest of EU for granted up till now. It´s not surprising that their creditors have had enough. There is a problem here where Greeks don´t feel responsible for their own economy. They blame it on their leaders (justifiably).

I think chances are that the EU central bank will soften over time. But Greece needs to show they´re taking the ECB seriously. So far they haven´t. Voting Tsipras into power also proved that. Obviously the rest of Europe won´t roll over endlessly, as they have done so far. Enough is enough. It´s Greece´s turn to show they are compliant. I think that is reasonable.

 

[Jokodo]

If the EU were being reasonable, maybe. Not if that shock treatment entails draining 3,5-4,5% from an economy already in recession, which basically means no reinvestment and thus the infrastructure going to waste, turning Greece into a third world country.

There´s arguments for both. But being inside the EU gives access to lots of capital they otherwise wouldn´t have as readily available. Being inside the EU means lots of rules. Rules give security.

The EU hard line they have now has taken a while to get like this. Greece has taken the rest of EU for granted up till now. It´s not surprising that their creditors have had enough. There is a problem here where Greeks don´t feel responsible for their own economy. They blame it on their leaders (justifiably).

I think chances are that the EU central bank will soften over time. But Greece needs to show they´re taking the ECB seriously. So far they haven´t. Voting Tsipras into power also proved that. Obviously the rest of Europe won´t roll over endlessly, as they have done so far. Enough is enough. It´s Greece´s turn to show they are compliant. I think that is reasonable.

There's no virtue in complying with unreasonable demands.

 

[dystopian]

What the refendum is going to be is whether the troika's demands to Greece are reasonable, and the clear answer to that question is going to be an overwhelming negative, even if it in all likelihood will lead to Greece leaving Euro. That's the master tactic of the Tsipras government and Varoufakis in particular.

Really? Because the polls taken thus far have shown a majority of the Greek population will vote yes. 57% yes in one poll, 47.2% yes in another (with 33% against). The Greeks may vote yes or no; but it definitely isn't clear right now that the answer is going to be an "overwhelming no".

 

[dismal]

There´s arguments for both. But being inside the EU gives access to lots of capital they otherwise wouldn´t have as readily available. Being inside the EU means lots of rules. Rules give security.

The EU hard line they have now has taken a while to get like this. Greece has taken the rest of EU for granted up till now. It´s not surprising that their creditors have had enough. There is a problem here where Greeks don´t feel responsible for their own economy. They blame it on their leaders (justifiably).

I think chances are that the EU central bank will soften over time. But Greece needs to show they´re taking the ECB seriously. So far they haven´t. Voting Tsipras into power also proved that. Obviously the rest of Europe won´t roll over endlessly, as they have done so far. Enough is enough. It´s Greece´s turn to show they are compliant. I think that is reasonable.

There's no virtue in complying with unreasonable demands.

And there's no money in failing to comply with lenders' demands.

 

[Perspicuo]

Greece Gives Europe What It Wants, Europe Says No Anyway
http://www.motherjones.com/kevin-dr...es-europe-what-it-wants-europe-says-no-anyway

[...] Paul Krugman [...]: The creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy.

The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity.

 

[ksen]

Better with the EU-shock treatment. Pain once, and then it´s good.

Except that the IMF disagrees that with austerity it is "pain once then it's good" and that no country has austered themselves out of the Great Recession.

 

[ksen]

But being inside the EU gives access to lots of capital they otherwise wouldn´t have as readily available.

Having control over your currency also means access to lots of capital should you need it.

Being inside the EU means lots of rules. Rules give security.

It doesn't follow from that any rule is a good rule.

The EU hard line they have now has taken a while to get like this. Greece has taken the rest of EU for granted up till now. It´s not surprising that their creditors have had enough.

Maybe the creditors should have thought of that before they helped Greece cook their books to get into the EU. And maybe the creditors should have thought about that before doubling down on demanding fiscal policies that have made it even more unlikely they'll get their money back.

There is a problem here where Greeks don´t feel responsible for their own economy. They blame it on their leaders (justifiably).

You contradict yourself.

I think chances are that the EU central bank will soften over time. But Greece needs to show they´re taking the ECB seriously. So far they haven´t. Voting Tsipras into power also proved that. Obviously the rest of Europe won´t roll over endlessly, as they have done so far. Enough is enough. It´s Greece´s turn to show they are compliant. I think that is reasonable.

Sounds like the EU doesn't actually care too much about democracy if it brings about a result they don't like. Did they ever stop to think that it's their own hardline attitude towards Greece that brought Syriza to power? The United States isn't the only entity that experiences blowback.

 

[Jayjay]

What the refendum is going to be is whether the troika's demands to Greece are reasonable, and the clear answer to that question is going to be an overwhelming negative, even if it in all likelihood will lead to Greece leaving Euro. That's the master tactic of the Tsipras government and Varoufakis in particular.

Really? Because the polls taken thus far have shown a majority of the Greek population will vote yes. 57% yes in one poll, 47.2% yes in another (with 33% against). The Greeks may vote yes or no; but it definitely isn't clear right now that the answer is going to be an "overwhelming no".

You make a good point. But also, I think the Greek very well know that the deadline for the IMF payments is today, and by the time they go to the polls the choices are just whether they are more pissed off at EU or their own government.

 

[dismal]

Having control over your currency also means access to lots of capital should you need it.

Huh? Like you mean you print up some money? I'm not sure that adds to the stock of capital in a nation.

Sounds like the EU doesn't actually care too much about democracy if it brings about a result they don't like. Did they ever stop to think that it's their own hardline attitude towards Greece that brought Syriza to power? The United States isn't the only entity that experiences blowback.

This is among the more ridiculous points I can imagine someone attempting. No one is saying Greece can't have whatever democracy it likes. However, if it wants to use other people's money it must meet those other people's conditions.

This is not the first time lenders have imposed conditions on borrowers that attempt to make it more likely the lender will get paid back.

 

[dystopian]

You make a good point. But also, I think the Greek very well know that the deadline for the IMF payments is today, and by the time they go to the polls the choices are just whether they are more pissed off at EU or their own government.

Sure; but that's kind of an argument *against* it being some master tactic by the government. If there's a yes vote, the government will probably fall as a result. I don't think that a tactic that involves only two outcomes one of which is your own demise could be classed as particularly intelligent. Especially if the other option will likely lead to the exact same thing, only more slowly. It's going to get pretty bad for the average Greek either way; and if they vote No and end up leaving the Euro/EU, it's only a matter of time before that anger against the EU is going to turn against the government instead.

 

[ksen]

Huh? Like you mean you print up some money? I'm not sure that adds to the stock of capital in a nation.

I was assuming Dr. Zoidberg was speaking about cash infusions.

Sounds like the EU doesn't actually care too much about democracy if it brings about a result they don't like. Did they ever stop to think that it's their own hardline attitude towards Greece that brought Syriza to power? The United States isn't the only entity that experiences blowback.

This is among the more ridiculous points I can imagine someone attempting. No one is saying Greece can't have whatever democracy it likes.

It's not that ridiculous.

However, if it wants to use other people's money it must meet those other people's conditions.

This is not the first time lenders have imposed conditions on borrowers that attempt to make it more likely the lender will get paid back.

It's also not the first time lenders have imposed conditions on borrowers that in reality make it less likely the lender will get paid back.