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Road to a Grecian turn?

Road to a Grecian turn?

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Old Feb 11th 2015, 3:35 pm
  #61  
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Default Re: Road to a Grecian turn?

A very good article by Andrew Lilico of the Telegraph:-

In current discussions of what Greece might or might not get in the way of concessions from the Eurozone,
there has so far been relatively little appreciation of one basic political reality: as far as the governments of
Spain, Portugal, Ireland, probably Italy and perhaps even France are concerned, Syriza must fail and must be
seen to fail.
Why? The reasons differ slightly between countries. The easiest case to see is perhaps Spain. In Spain, the
governing party is the centre-right Partido Popular led by Mariano Rajoy. It is currently facing pressure from a
far-left party, Podemos, allied to Syriza. Indeed the Podemos leader Pablo Iglesias even campaigned in
partnership with Syriza and, following Syriza's victory, at his own party's rally he proclaimed: "Syriza,
Podemos - we will win [venceremos]!" Podemos is currently leading in the polls, ahead of an election later this
year. The very last thing Rajoy can afford is for Syriza's approach to be seen to succeed, emboldening and
vindicating Podemos.
As for Portugal and Ireland, where the governments stuck to bailout conditions despite the domestic pain, how
would they sell concessions to Syriza to their own voters? Suppose they go back and say: "We were suckers.
We shouldn't have made all those cuts. Instead, what we really should have done was to raise the minimum
wage, hire back the public sector staff that had been fired, say we weren't going to pay our debts to our
eurozone partners, cosy up to the Russians and tell the Germans they didn't feel nearly guilty enough about
World War Two. Then everyone would have said we were ‘rock stars’ and and forgiven our debts." Do you
reckon that would go down well?
As for the Italians, the Syriza leaders are terribly keen to claim that Greece and Italy are in much the same
position and that there should therefore be a general debt amnesty across the eurozone. The Italians, on the
other hand, are less keen on this comparison. Over the weekend, the Greek finance minister stated: "Let's face
it, Italy's debt situation is unsustainable". The Italian Finance Minister Pier Carlo Padoan replied on Twitter
that his Greek counterpart’s remarks were “out of place" and that Italy's debt is "solid and sustainable". If the
Italians, at any point, seek any relaxation of the fiscal strictures their eurozone partners have placed upon them,
you can rest assured they will not be claiming that they are just like Greece or that anything that happens in
Greece sets a precedent for them.
And why would they? Greece has been in default for more than half its history since 1830. In contrast, the only
time Italy didn't pay its debts in full was between 1940 and 1947 when it temporarily suspended coupon
payments on their debts to their World War One allies, who then became their World War Two enemies. Italy
never defaults. Greece always defaults. That’s a very big difference right there. The Italians will want nothing
to do with any analogies with Greece.
And note: I haven’t even got on to the problem of how voters in Germany or Finland or the Netherlands would
react to being told that Syriza had extracted concessions with its comic-book antics.
From the perspective of these eurozone governments, Syriza must fail. The best way for it to fail would be for
it to capitulate utterly and crawl back to Greece with its tail between its legs and a few cosmetic patronising
“concessions” such as renaming the “Troika” the “Consultative Committee” (or, if it makes them feel better,
the “Symvouleftiki Epitropi”). If it won’t do that — and there’s a good chance that if it did try to do that then
the Greek government would collapse, anyway — then things get a bit more complicated. Because if it’s bad
and dangerous for Syriza to succeed inside the euro, it would be disastrous for it to succeed outside the euro.
Eurozone leaders can’t, obviously, say they fear this latter scenario. And even in their private moments they
must surely be fairly confident that even with ideal policies it would be very tricky for Greece to cope with a
disorderly departure from the euro (and hence the EU — leaving the euro would mean Greece imposing capital
controls and France and Italy imposing quotas or tariffs upon Greek goods after a sudden 50pc devaluation, de
facto cutting Greece out of the Single Market). Yet Syriza’s policies would be anything but ideal. It would
nationalise the banks and many other industries, print money to cover public spending, overthrow property
rights and impose wealth taxes in a desperate attempt to obtain revenue, and many other crazy things. Even in
an economy at as low an ebb as Greece’s there remains some scope for amateurish hard-left lunacy to make
things worse.
Yet a tiny doubt may remain. Even if things in Greece are initially very bad and even if in fact Greek wealth, in
international terms, drops precipitously with its new currency, there would remain some risk that, eighteen
months later, matters would have stabilised and unemployment might be falling with growth returning (now
from a much lower base). Would voters in Portugal and Italy and Spain see through the headlines to the
miserable Greek reality beneath, or would they be seduced into believing that euro exit and leftist solutions
were the easy way out?
Eurozone governments will be sure that Syriza must not succeed. But they may not be quite sure, yet, how to
be most certain that it won’t.
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Old Feb 11th 2015, 3:55 pm
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Default Re: Road to a Grecian turn?

Interesting article IVV.
Trouble with all these articles are they all have more than a grain of truth, realism and commonsene in them.
But if truth realism and commonsense had anything to do with it, they would never have embarked on this barmy project in the first place.

I will see you one Lilico and raise you one Warner.
For the third time in a century, America will have to ride to Europe's rescue - Telegraph
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Old Feb 12th 2015, 8:22 am
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I'm afraid I don't go along with much of what Warner says especially the suggestion that Greece's debt be redominated in devalued drachmas. Anyhow it seems we won't have to wait too long before this whole thing goes toxic.
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Old Feb 12th 2015, 10:30 am
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Default Re: Road to a Grecian turn?

Originally Posted by bigglesworth View Post
Interesting article IVV.
Trouble with all these articles are they all have more than a grain of truth, realism and commonsene in them.
But if truth realism and commonsense had anything to do with it, they would never have embarked on this barmy project in the first place.

I will see you one Lilico and raise you one Warner.
For the third time in a century, America will have to ride to Europe's rescue - Telegraph
Excellent article, and reflects views I've held since before the beginning of the crisis. But back then, those views were considered far more looney than they are now.
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Old Feb 13th 2015, 3:16 pm
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Default Re: Road to a Grecian turn?

Originally Posted by InVinoVeritas View Post
I'm afraid I don't go along with much of what Warner says especially the suggestion that Greece's debt be redominated in devalued drachmas. Anyhow it seems we won't have to wait too long before this whole thing goes toxic.
It could be that the corner has been turned, despite the rhetoric the new Greek government has accepted that at least 70% of the debt and has entered into negotiations for the balance.
The markets and the Euro have started to recover.

It looks like as with any politician getting elected was more important than keeping its promises however insane they may have been.
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Old Feb 13th 2015, 5:25 pm
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Default Re: Road to a Grecian turn?

Originally Posted by EMR View Post
It could be that the corner has been turned, despite the rhetoric the new Greek government has accepted that at least 70% of the debt and has entered into negotiations for the balance.
The markets and the Euro have started to recover.

It looks like as with any politician getting elected was more important than keeping its promises however insane they may have been.
Not 70% of the debt. 70% of the measures in the bailout package. The markets have been bouncing about all over the place. And the chief promise overall was to put the Greek people above the debt repayment in terms of priority and I don't think for a moment this government will renege on that - they have to show some tangible improvement in the conditions being endured by the worst off.
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Old Feb 18th 2015, 12:29 pm
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Looks like Greece has blinked first - getting interesting now
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Old Feb 19th 2015, 8:21 am
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Hmm this is an interesting perspective on what the Greek leadership is really thinking:
The mouse that roared

This year marks the sixty years since the publication of Leonard Wibberley’s novel The Mouse That Roared and Greece’s strategy in negotiating with its creditors is strangely reminiscent of the book’s plot. In it, the prime minister of a tiny alpine duchy, the cunning Count Mountjoy, sends a twenty-man force led by a hapless game warden-turned-field marshal to conquer New York. Mountjoy’s hope is that, as was the case for West Germany and Japan after World War II, the ever-magnanimous Americans will agree to rebuild the economy of its defeated foe.

Much like the newly minted field marshal, Greece’s finance minister was dispatched on his tour of European capitals not to win the war but to lose it. The ultimate goal of Greece’s prime minister, Alexis Tsipras, is not to compromise, but to facilitate an exit from the eurozone and regain control of both his country’s fiscal and monetary policies.

Because relinquishing the euro is likely to be unpopular, resuscitating the drachma must be framed as a patriotic response to the economic aggression of Greece’s foreign enemies. The villainised Troika of its international lenders and, better still, German chancellor Angela Merkel and her finance minister Wolfgang Schäuble serve this purpose. The loan extension that has emerged from negotiations in Brussels this week merely buys time for the Greek government to plan a more orderly return to its own currency.
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Old Feb 19th 2015, 11:49 am
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And the white flag has beenrun up the pole in Athens - Varoufakis' bluff has been called and as we all suspected he was holding a pair of twos playing aginst a Royal Flush!

Sub para (f) = troika supervision methinks?



Athens, February 18, 2015

Dear President of the Eurogroup,

Over the last five years, the people of Greece have exerted remarkable efforts in economic adjustment. The new government is committed to a broader and deeper reform process aimed at durably improving growth and employment prospects, achieving debt sustainability and financial stability, enhancing social fairness and mitigating the significant social cost of the ongoing crisis.

The Greek authorities recognise that the procedures agreed by the previous governments were interrupted by the recent presidential and general elections and that, as a result, several of the technical arrangements have been invalidated. The Greek authorities honour Greece's financial obligations to all its creditors as well as state our intention to cooperate with our partners in order to avert technical impediments in the context of the Master Facility Agreement which we recognise as binding vis-a-vis its financial and procedural content.

In this context, the Greek authorities are now applying for the extension of the Master Financial Assistance Facility Agreement for a period of six months from its termination during which period we shall proceed jointly, and making best use of given flexibility in the current arrangement, toward its successful conclusion and review on the basis of the proposals of, on the one hand, the Greek government and, on the other, the institutions.

The purpose of the requested six-month extension of the Agreement's duration is:

(a) To agree the mutually acceptable financial and administrative terms the implementation of which, in collaboration with the institutions, will stabilise Greece's fiscal position, attain appropriate primary fiscal surpluses, guarantee debt stability and assist in the attainment of fiscal targets for 2015 that take into account the present economic situation.

(b) To ensure, working closely with our European and international partners, that any new measures be fully funded while refraining from unilateral action that would undermine the fiscal targets, economic recovery and financial stability.

(c) To allow the European Central Bank to re-introduce the waiver in accordance with its procedures and regulations.

(d) To extend the availability of the EFSF bonds held by the HFSF for the duration of the Agreement.

(e) To commence work between the technical teams on a possible new Contract for Recovery and Growth that the Greek authorities envisage between Greece, Europe and the International Monetary Fund which could follow the current Agreement.

(f) To agree on supervision under the EU and ECB framework and, in the same spirit, with the International Monetary Fund for the duration of the extended Agreement.

(G) To discuss means of enacting the November 2012 Eurogroup decision regarding possible further debt measures and assistance for implementation after the completion of the extended Agreement and as part of the follow-up Contract.

With the above in mind, the Greek government expresses its determination to cooperate closely with the European Union's institutions and with the International Monetary Fund in order: (a) to attain fiscal and financial stability and (b) to enable the Greek government to introduce the substantive, far-reaching reforms that are needed to restore the living standards of millions of Greek citizens through sustainable economic growth, gainful employment and social cohesion.

Sincerely,

Yanis Varoufakis

Minister of Finance

Hellenic Republic
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Old Feb 19th 2015, 1:34 pm
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Originally Posted by Garbatellamike View Post
And the white flag has beenrun up the pole in Athens - Varoufakis' bluff has been called and as we all suspected he was holding a pair of twos playing aginst a Royal Flush!
So - if Greece has so meekly and totally capitulated - why is Germany being obstructive?

The European commission had described the Greek proposal – widely seen as a climbdown on some of Greece’s key demands – as a positive sign that could pave the way for compromise.
But Germany said the Greek plan failed to meet eurozone ministers’ demands that Greece stick to its bailout programme – a set of demands laid out on Monday at an acrimonious meeting in Brussels that failed to end the deadlock.
“The letter from Athens is not a proposal that leads to a substantial solution,” finance ministry spokesman Martin Jaeger said in a statement.
“In truth it goes in the direction of a bridge financing, without fulfilling the demands of the programme. The letter does not meet the criteria agreed by the Eurogroup on Monday.”
A Greek government official said its latest proposal included measures to deal with the country’s “humanitarian crisis” and kickstart the economy. The request for a six-month loan extension would give Greece room to negotiate a new deal for growth with its eurozone partners, the official said.
http://www.theguardian.com/business/...loan-extension
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Old Feb 19th 2015, 2:00 pm
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Originally Posted by Red Eric View Post
So - if Greece has so meekly and totally capitulated - why is Germany being obstructive?[/URL]
That is a very good question Eric and one I have been asking myself this afternoon - I hope it is now Germany that is bluffing to put the wind up Greece with the intent of then rolling over and playing dead at the last moment.

The interesting thing for me at the moment is that the Bond Market for 3 of the 4 PIGS are at record lows and the 4th (the G) is at a level generally considered unsustainable and certain to lead to backruptcy in the medium term.

This may suggest that the Market feels that a GREXIT is now non-contagious. I also see Germans pointing out that the Greek economy amounts to less than 1.8% of the Eurozone total - so who'd miss it.

Is there an agenda to force Greece out of the Eurozone - it is one way of interpretting things. However, I tend to think it is the Eurozone playing Varoufakis at his own stupid games in order to teach him a lesson in realpolitik rather than a representing a genuine German stance.

Politicans are notoriously vindicative in these sort of things but a deal will still be forthcoming methinks now Greece has moved from lunacy and negotiations can replace bluffing and bluster based on this significant capitulation.

PS: I attach no credence or credibility to reports in down market politically-biased tabloids like the Mail and the Guardian so have not opened your link.
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Old Feb 20th 2015, 6:54 am
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Originally Posted by Garbatellamike View Post
PS: I attach no credence or credibility to reports in down market politically-biased tabloids like the Mail and the Guardian so have not opened your link.
I don't know what The Guardian has done to upset you so badly since you opened a link to an article in it posted on this thread a few days ago and pronounced it an interesting read.

However, just so nobody thinks I'm trying to indoctrinate them :-

When I quote from elsewhere I generally use the quote facility provided and add a link to the source for two reasons
1) out of courtesy to the original author and publisher
2) so that anybody who's interested can follow the link to see the quoted material in its full context

I feel this is preferable to copying and pasting without acknowledgements (or stealing, as it might otherwise be termed).

In this case it happened to come from The Guardian because it was the first place I read it in English. It wasn't an opinion piece (so nothing contagious) - just straight news reporting. Even non-devotees have respect for the credibility of the paper's news items.

Your paranoia does help to explain why you appear to think that whatever deviation from the Master Agreement the Greeks are suggesting can instantly be labelled "loony". Presumably, despite your apparent yearning for change, what you actually want is for everything to remain the same, which would put the Greeks back to square one with no room for manoeuvre.
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Old Feb 20th 2015, 9:10 am
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Originally Posted by Red Eric View Post
Presumably, despite your apparent yearning for change, what you actually want is for everything to remain the same, which would put the Greeks back to square one with no room for manoeuvre.
Don't be ridiculous, how on earth did you come to that erroneous conclusion.

The issue here for me is that the letter sent by Greece should have been where they started the negotiations from not their best and final offer. They have pretty much burnt their bridges and the German Finance Minister is now being vindictive because Varoufakis was a complete **********. It has got personal now.

Going back to square one is insane as you allude to!

Giving the Greek government more of other people's money without reform is insane based on their track record and the basis on which the extreme left won the election - SPEND! SPEND! SPEND!

Asking Eurozone members with lower standard of living than Greece to give a truckload of free money to Greece to perpetuate the high levels of Bureaucracy is completely insane.

Put simply you cannot go on like this (bailout) and you cannot go back to borrowing shed loads of money you can't pay back to live beyond your means. Therefore, you need to find a third way.

It seems to me that the only sane way out is rapidly becoming a default and concomitant GREXIT. This will cause lots of pain in Greece in the short-term but medicine tastes bad and the Greek people will be better off in the long run. Is this the third way/best way? I honestly don't know!

The bailout was actually nothing to do with the Greek people but more a question of protecting the rest of the Eurozone from contagion. If Greece had gone under in 2010 then Italy would have followed quickly as it was on the brink and then the domino effect..... The EU Commission and the ECB have spent the intervening years working to eliminate the contagion risk and seem to have suceeded.

Greece is the architect of her own downfall and the Eurozone has been complicit in this with the bailout conditions designed to save the Euro and the wider European project rather than addressing the root causes of Greece's problems - OVERBORROWING.

The question now for many Eurozone members increasingly seems to be:
is a GREXIT not only palatable but desirable???
Lots of things are uncertain in this and anyone who says he has an easy answer is either is a liar or a fool.

The only thing we can be 100% sure of is that the Greek debt will never be paid back - they can't afford to and never will be able to. Increasing that debt is throwing good money after bad.......
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Old Feb 20th 2015, 12:39 pm
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Originally Posted by Garbatellamike View Post
Don't be ridiculous, how on earth did you come to that erroneous conclusion.

The issue here for me is that the letter sent by Greece should have been where they started the negotiations from not their best and final offer. They have pretty much burnt their bridges and the German Finance Minister is now being vindictive because Varoufakis was a complete **********. It has got personal now.

Going back to square one is insane as you allude to!

Giving the Greek government more of other people's money without reform is insane based on their track record and the basis on which the extreme left won the election - SPEND! SPEND! SPEND!

Asking Eurozone members with lower standard of living than Greece to give a truckload of free money to Greece to perpetuate the high levels of Bureaucracy is completely insane.
My conclusion was drawn from your rather triumphant post about total surrender on Greece's part - a notion you now appear to have toned down a notch or two.

You may not like Varoufakis but his public statements have made perfect sense and carry far more logic than simply saying (as his opponents seem to insist) you must carry on down the same path. It's quite normal for negotiations to start with both sides claiming more than they expect to end up with.

Greece (and the other bailed out countries) have never received free money - it comes at a very hefty price and most of it has been channelled to foreign banks.

Yes, previous administrations can certainly be held responsible for some of today's problems but any analysis that says it was all her own fault oversimplifies everything and ignores the crisis of 2008, its origins, the manner in which it was(n't?) dealt with and the effect on the weaker European economies in particular.

Originally Posted by Garbatellamike View Post
The only thing we can be 100% sure of is that the Greek debt will never be paid back - they can't afford to and never will be able to. Increasing that debt is throwing good money after bad.......
And that is the crux of the matter. There is a new administration committed to cleaning up some of the remaining failings, which it won't be able to do without a bit of breathing space. Is it fair on the Greek population to throw them to the dogs just when they appear to have the best chance of having a proper go at that? Surely the response to that can't forever continue to be "They brought it on themselves" when clearly neither the current administration nor the general population did.
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Old Feb 20th 2015, 1:35 pm
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Originally Posted by Red Eric View Post
My conclusion was drawn from your rather triumphant post about total surrender on Greece's part - a notion you now appear to have toned down a notch or two nice try -no biting sorry.

You may not like Varoufakis but his public statements have made perfect sense Hmm -on this we would have to agree to differ as I find his statements non-sensical bufoonish game playing which is having exactly the opposite effect on the other 18 countries than he needs i.e. he is generating enemity not cooperationand carry far more logic than simply saying (as his opponents seem to insist) you must carry on down the same path. It's quite normal for negotiations to start with both sides claiming more than they expect to end up with.Yes exactly which is why the letter of yesterday is where they should have started from rather than all the vacuous posturing and insulting behavoiur - the letter is a logical place for Greece to start and compromise from. The problem is they have promised impossible things to the Greek people to win the election and now, unsurprisingly, cannot deliver the undeliverable.

Greece (and the other bailed out countries) have never received free money - it comes at a very hefty price and most of it has been channelled to foreign banks Greece did - the hair cut.

Yes, previous administrations can certainly be held responsible for some of today's problems but any analysis that says it was all her own fault oversimplifies everything and ignores the crisis of 2008, its origins, the manner in which it was(n't?) dealt with and the effect on the weaker European economies in particular. And blaming it all on the Germans wasn't a gross oversimplification, what part of complicit was I unclear on


And that is the crux of the matter. There is a new administration committed to cleaning up some of the remaining failings, which it won't be able to do without a bit of breathing space and here is indeed the issue in a nutshell if they are committed to clearing up the mess why don't they stop posturing and start doing something about it - going back to borrow and spend is just as nuts as continuing with Austerity in its current form. Is it fair life ain't fair, that is the reality whether you like it or not - "it's not fair" the cry of most 4 or 5 year old kids. Don't you think we need to be more grown up than thaton the Greek population to throw them to the dogs just when they appear to have the best chance of having a proper go at that? Surely the response to that can't forever continue to be "They brought it on themselves" when clearly neither the current administration nor the general population did. I agree that the populace didn't but the current administration actually seem determined to make it worse not better with a return to the policies that got the country in to trouble in the first place - so far it is not a fresh start but more of the same madness: borrow spend borrow spend. No one will be happy than me if this coalition of Marxists, Communists and Trotskyites can sort out the economic mess in Greece but I ain't holding my breath on the evidence to date
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