Garbatellamike

Yep - what is happening in Greece is a symptom not a root cause......

Red Eric

It's precisely these sorts of sentiments that have been so depressing over the past few years :-

The problems are too deep to be resolved
It could have been easily resolved ages ago but it's too late now
There is only one solution and it's the one that's being applied
We recognise that what's being done wasn't necessarily the best solution but it's too late to change

I'm optimistic about the possibility of change based on a refreshingly enthusiastic attitude and a willingness to try something different on the part of the new Greek government, and on the basis that of what (admittedly little) I've heard so far directly from them makes good sense as opposed to the talk that generally emanates from those in charge. The FMI, EU Commissioner, ECB chief and leader of the Eurozone Finance Group Ministers occasionally remember to spout something about measures other than austerity and fiscal discipline before they quickly remember who they are and go back to same-old, same-old.

It has got to the point where something has to change or Greece wil be forced into bankruptcy, which will have exactly the same effect as if they voluntarily default. The Greeks don't want either of the latter and neither does the EU. I think these new people have an ability and a desire to communicate - I don't think it's posturing, more finding a way in which they can get their point of view across and be listened to. If that means saying "Go on then, I dare you" to the threat of "We'll pull the plug on the finance if you don't do as we say", so be it. Up to now, it's been Greece taking orders - conversation is what's required.

amideislas

Yes, it most certainly could have been avoided long ago. We agree on that, and so does much of the rest of the world. Look what others (successfully) did to stimulate growth (over austerity):

• Currency manipulation (QE)
• Tax cuts
• (sensible) spending / waste cuts
• Implement aggressive business incentivisation policies, eliminate punitive labour regulation and encourage job growth (generating taxpayers, not tax consumers)
• Abandon useless protective subsidies and stop being so gaddamned afraid of competition, facilitating increased competitiveness on the world stage.

Look, if Europe had adopted a real growth strategy, and the same strategies had been implemented in Greece, the Greek economy would be growing along with it (perhaps slowly, but at least not "shrinking" as it is now), and the Greek debt, economy and elections probably wouldn't even make page 4, probably buried somewhere in the international section. And voters wouldn't be voting on the basis of desperation.

bigglesworth

A truly excellent quip.

Garbatellamike

Thank you kind Sir

I so hope that Eric proves to be right with his optimism. However, after meeting the new Greek PM, the Italian PM remarked that at least Brussels will no longer regard me as the dangerous left wing loony!

Garbatellamike

this!

Moses2013

I love Greece but corruption was and still is the biggest problem (like most countries) incl. many other issues. The EU idea wasn't thought through and every country is different and needs flexibility (with less corruption). We can just hope that Greece and the EU find a solution, but what do we know. In one way we're all corrupt in different ways. It starts when people go food shopping in the UK or elsewhere and just buy the cheapest products.

bigglesworth

I am very much with Ami here. There is a bit of me that says Greece wants its cake and eat it. I completely agree that they needed a growth strategy. They were not without allies – the launch of a sort of QE by the ECB last month was clearly ClubMed ganging up on Germany, although the sovereign limitation has given Germany some cover.
And I have some sympathy with Greece. Certainly they should not have borrowed the sums they did. But what sort of m*r*n lends such enormous sums to Greece on the same terms as to Germany? French and German banks held over 90 percent of Greek debt and there was never a cat in hells chance Greece was going to be able to repay. Said banks have now been bailed out by European taxpayers. Personally were I Greek I might be very unhappy with that outcome, and even more so with the posturing by the EC and ECB that this was done to help Greece. It was not. It was to bail out French and German banks, and to hold the Euro together. (Actually I am pretty unhappy with that outcome anyway)
Which begs the question of whether QE should have been embarked on at all. After seven or eight years of QE from USA and UK, those banks might reasonably have been supposed to have been able to rebuild their capital base, especially after the shed-loads of cash that the Troika has hosed over them. Unless of course the holes were much worse than they admitted. (Surely not?) So what is QE supposed to achieve now if not that? Printing or borrowing money purely to counterfeit the effects of growth rather suggests that Plan A failed.
However I am not sure it is fair to single Greece out for "fraudulently" entering the Euro. Italy played very fast and loose with its debt numbers (and that started long before Silvio) and Portugal and Spain were fairly imaginative too. As did the UK to a lesser extent. Gordon Brown’s “no more boom and bust” could theoretically have been true. IF the credit bubble he created had kept spinning and inflating, the boom would have continued. He was not the only politician in Europe to confuse the velocity of circulation with growth. Using what was pretty obviously fictitious growth in the economy to generate taxes to grow government spending does not feel a lot different to actually creating fictitious money to finance government spending.
To me, it all sounds like the old Irish joke “If I wanted to go to X, I wouldn’t start from here”. What Greece has been dealing with is a policy designed to achieve a different outcome – nominally balancing the Greek budget but really the survival of the Euro - from the outcome Greece needs – the restoration of growth and competitiveness. It is difficult to see how Greece can ever repay debts of 100+ percent of GDP with the economy (and youth population) shrinking as fast as it is and linked inextricably as it is to German competitiveness. Even at the present depressed levels the interest bill and redemptions amount to about 10 percent of GDP.
So somebody is going to take a hit. But as a European who pays his taxes I am not over impressed with a country that will not collect taxes. If Brussels continues to waste taxes on people who refuse to pay taxes, it is not surprising if hard pressed taxpayers look for parties that will represent them, and not a country looking for a free lunch
The bottom line for me is that somebody is going to pay. And I am pretty fed up at finding that the buck always seems to stop with me.

amideislas

Right there with you biggles.

I posted this in another thread, but it's a worthwhile read.

Curiously, published by a left-leaning rag, highlighting the findings of the red cross, which is not exactly a politically-bent or disreputable organisation.

Austerity pushing Europe into social and economic decline, says Red Cross | World news | The Guardian

Garbatellamike

A good article Ami, thanks. I think it is symptomatic of the fact that for the first time in the modern and post-modern epochs the coming generation will be poorer than the current generation. The baby boomers have broken the international system and it is the coming generation(s) that will have to pay the price.

amideislas

Unfortunately, frugality isn't a choice. Particularly in Europe.

bigglesworth

I'm sorry, I just do not have a clue what you are trying to say.
Do you really mean that bargain hunting is corrupt?

Moses2013

I just said that we're all corrupt in different ways. The point is that people go to supermarkets and buy from producers who rip off farm workers etc. We're basically supporting corruption.

Garbatellamike

Good article on Reuters this morning on this topic - worth a read methinks.

Greek banks hammered after ECB snub, Athens rejects 'blackmail' | Reuters

InVinoVeritas

Sorry I can't see the logic in this at all. Corruption is not one of the ingredients listed on the packet so the consumer has no way of knowing how the product came to be on the supermarket shelf at the price displayed. The capitalist society is based on competition and price is the principle measure. Do you think a Communist system is less corrupt ?