Have you read Lewis’ Boomerang ?
Some hillarious shit happening over there. Like hospital supplies systematicaly being sold by employees, taxes being waved on election year, state employees collecting 3 salaries, etc.
But of course, in the mind of Greek people, what is happening to them is the fault of the ones who lent them money.
I’m not arguing that the Greeks are victims. But to say the economy has been improving over there is just not accurate by any reliable metric.
Good spot.
It’s possible that the same could be done to Greece in the near future to exert extreme political pressure and force the current govt to collapse in spite of their extraordinary popularity bringing in a new govt that will toe the line. People are quick to blame Tsiparas and maybe he is naive and inexperienced but he’s the first person I have seen to completely outplay Merkel’s strategy of ‘Aussitzen’.
The best thing the Greeks could do now is take a page out of Putin’s book and introduce a flat tax rate instead of the ridiculously complex shit they have going on. It’s also interesting that apparently there is no legal provision in the framework of the Eurozone to throw a country out and Greece has the option to take Germany to the Euro courts if they are thrown out against their will (word of mouth, not sure if this is accurate). Either way the Greeks are in for tough times but they still have one of the largest shipping fleets and pulled in upwards of 20 million tourists last year. Plan appropriately and they could come out stronger.
There has to be more going on than the ‘Greeks are lazy’ crap. Anti-austerity movements are gaining pace in Britain and there is now a clear rift between France and Germany. Interesting times. On a lighter note weren’t the Greeks denied almost 11 Billion even though they refused to write off Germany’s debt circa 1950? Karma is a bitch.
So a 1/2 greek, 1/2 german friend who works at a prominent political institution just posted on f’book that she’s hearing they’re already using drachmas on one island.
Obviously I’ve msgd her to find out more - but is that even possible? weren’t old currency notes exchanged for euros?
If what she says is true then my god greece is gonna collapse quicker than we thought
Greece doesn’t even have the machines to print drachmas. Personally, I like this Tsipras guy, a leader actually trying hard to think about his citizens welfare? How novel.
What do Greece, Italy, Portugal and Ireland have in common?
This… http://blog.thomsonreuters.com/wp-content/uploads/2012/11/european-gov-debt.jpg
And… http://jakubmarian.com/wp-content/uploads/2014/06/europe-iq-2012.jpg
Realistically, there is no scenario in this family, where Greece ever “wins” in the competition with their Northern European brothers. Since there was really no other possible outcome, you can’t really say it was their fault. More like destiny?
Wait, why are we talking about (the lack of) GDP growth in Greece? Everyone knows that GDP will fall with austerity. This is unfortunate, but keeping the country solvent is the primary concern at the moment, for Greece and for the EU. Greece’s budget deficit has generally been narrowing since about 2010. The EU’s proposals to Greece this year aim to create a budget surplus by 2017 or so.
Greece’s population is anti-austerity since this means reducing living standards (which they feel) in exchange for improving government finances (which they do not feel).
If things are going to suck anyways, then it’s better to screw over your bond holders than your citizens. Default might suck, but so will austerity.
Because of this:
Yes, the deficit has narrowed (although it’s a deficit).
I think the points of contention are 1) whether the plans put forth by the EU were viable and would actually lead to a surplus and 2) whether that situation would hold if rates were not at essesntially zero levels. In other words, if rate float up in 2 to 5 years are you right back in a deficit and possibly headed towards default.
As far as these points go, I actually don’t know. I just know the economy has not been improving through austerity.
Well, the Greek state doesn’t have the money to pay its expenses. At some point, it will have to issue vouchers or IOUs or something. When that happens, those things could end up being a de-facto second currency. It could very well start to look like Argentina, which has pesos for exchange, but most everyone actualy does their accounting in dollars.
I think the bigger issue here is not whether the Germans get their money back, or whether Greece is in or out of the EU, but what happens when the Greek government simply shuts down. It is a major security risk, since failed states are where terrorists and many other unpleasantries grow. If this happens, one could even imagine a case where some Euro-police-military force feels the need to intervene. It would look more or less like an invasion after the collapse of a failed state.
Also remember that getting kicked out of the EMU is different from being kicked out of Europe. Citizens and labor forces and money can still travel easily between countries (barring capital controls like the recent measures), it’s just that prices are demonimanted differently. A failed state may involve special sanctions that look like the Greeks getting kicked out of Europe entirely, but then does it become a launching base for ISIS?
Part of the question is now “What’s the reason for having an EMU?” Originally, when there was just a common market, the goal was to tie Germany and France together so they wouldn’t be tempted to go at each other again the way they did in WWI and WWII, particularly when the USSR seemed to be an existential threat to Western Europe. Today it seems to be about creating an economic bloc that can measure up to the US and China in terms of economic heft (and to a lesser extent, vs Russia and Japan). Whether Greece is in or out is kinda irrelevant in the big picture, but of course it raises the question of whether countries like Portugal, Spain, and Italy are in danger of following the Greek pattern. Ultimately, one could even see France in this kind of trouble, though not in the very near future.
I wasn’t attempting to undermine you or your facts. Just pointing out that one could make the case the austerity measures were helping. Had they stuck with it, who knows? My main point was it doesn’t really matter because Greeks are too damn lazy to stick with something as difficult as austerity. They’d rather be your hairy friend that always asks for money and repays you with the occasional gyro.
I disagree with the assertion that austerity was helping the economy and I still don’t think it’s even remotely possible to make that argument in a marginally credible way. If you looked at those facts which present a real view of the economic activity, there is simply no arguing that austerity has had any positive impact.
If you’re trying to say that austerity was helping to decrease the deficit - then yes, to an extent that is true- but that so far is not the point you’ve attempted to make, having only provided one very, very weak chart tied to GDP from the fed using a tangential dataset that actually shows no significant improvement and lies contrary to all other data out there.
I also think it’s simplistic to say that the Greeks are simply lazy because they’ve decided that after 3 years of 25% unemployment they’d rather have a return to growth.
Yes, I hate it when I say that some metric is improving and laymen question it without bothering to look beyond its third derivative.
What is the definition of the economy getting better? Austerity has certainly reduced the level of economic activity in Greece. However, it could still be considered an improvement, as the probability of national bankruptcy is now greatly reduced.
I actually can’t tell if we’re agreeing or not.
I’ve heard a significant number of analysts make the case that a restructuring is inevitable even with austerity as put forth. So I’m not entirely disregarding your statement that the situation may be improved, but I’d have to see a case made that long term solvency is actually a possibility. Additionally, you can look at the decreasing deficit, but I’m looking at a debt load that has ballooned from 82% of GDP to 175% of GDP in 8 years and seriously questioning the assertion that the credit profile has improved.
It’s agreeing.
Econoception
Greece has a lot of HCBs who like to protest it seems.
