Greece III - It's all downhill from here.

[dalThor]

Even though I've been right all along, I quit.
~ Yanis Varoufakis

http://www.theguardian.com/world/2015/jul/06/greek-finance-minister-yanis-varoufakis-resigns-despite-referendum-no-vote?CMP=fb_gu

Looks like a no vote. Which is at least consistent with electing Syriza in the first place.

I still have issues seeing January as a SYRIZA victory. It was really more a matter of, I'm certain not going to vote for them. SYRIZA didn't get a majority and ended up forming a government with a far, but not extreme right, anti-austerity party.

Tsipras 'won' by default.
(No pun intended.)

[ummester]

Perhaps these 'partners' have just said the price of making a better deal for Greece is his resignation?

It could be no more complicated than it seems, a populist finance minister stirs the pot, gets the country onside and is now hoping he (and the country's vote) has done enough to secure a better deal from whatever creditors they use - probably still the EU (Germany/France) - on the condition that he steps down and stops stirring the pot.

Interesting article here:

http://www.businessinsider.com.au/greece-referendum-result-and-the-meaning-of-debt-2015-7

[Solmyr]

I feel invigorated by the results of the referendum - it gives me hope that the Greek people want to take matters into their own hands once again and work their way from there. As for all the foreign creditors - you will swallow your loss and think better next time. This is what the bloody interest premium on loans is about - you are making a profit in exchange for the risk of not being paid back. If you are always paid back though, then there is no risk and your profit is undeserved.

As long as the country doesn't run out of food and fuel (the former can be internally produced as far as I know Greece's economy) everything else will be worked out.

[midi]

Perhaps these 'partners' have just said the price of making a better deal for Greece is his resignation?

Varoufakis called the creditors "terrorists" before the vote. To even get the eurogroup back to the table he had to go. This doesn't signal any move towards a new agreement with Greece, make no mistake.

[dalThor]

Technically, he referred to their behavior as 'terrorism' but why split hairs.

FOR THE RECORD, I'm fully prepared to eat my heaping piles of humble pie if at some point Tsipras & Co. manage to prove me wrong. In fact. as a friend said on FB, "I've never hoped to be wrong in all my life, more than I do tonight. Here's hoping our benevolent leader can pull this off."

The meeting between the party heads of the government is now ongoing. I didn't think either KKE the communist party, or Golden Dawn the neo-Nazis would show up but apparently KKE did.

[ummester]

The word terrorism has lost it's meaning and clout anyway, so often is it thrown around. Everyone is someone's terrorist now. Our species has become such cry babies that all of our favorite words end in 'ist' or 'ism' :D

Varoufakis basic idea was correct - the bank threats were about instilling fear to try and get the Greek populace to vote yes. So, whatever the future holds for Greece, you do have to admire that as a nation they did not give into financial fear.

[Lyanna Stark]

Varoufakis called the creditors "terrorists" before the vote. To even get the eurogroup back to the table he had to go. This doesn't signal any move towards a new agreement with Greece, make no mistake.

Good for him, he stuck it to the man. Although, he also had to go I guess since he did indeed stick it to the man. Lefties sticking it to the man in 2015 Europe is Not To Be Done, apparently.

FOR THE RECORD, I'm fully prepared to eat my heaping piles of humble pie if at some point Tsipras & Co. manage to prove me wrong. In fact. as a friend said on FB, "I've never hoped to be wrong in all my life, more than I do tonight. Here's hoping our benevolent leader can pull this off."

For your sake, I hope it does work out, even is Tsipras might not be the best choice, but then there doesn't seem to be one. (Or, is there ever one? It seems more and more often the answer is "no".)

[Arakan]

I feel invigorated by the results of the referendum - it gives me hope that the Greek people want to take matters into their own hands once again and work their way from there. As for all the foreign creditors - you will swallow your loss and think better next time. This is what the bloody interest premium on loans is about - you are making a profit in exchange for the risk of not being paid back. If you are always paid back though, then there is no risk and your profit is undeserved.

As long as the country doesn't run out of food and fuel (the former can be internally produced as far as I know Greece's economy) everything else will be worked out.

Yup all fine except Greece didnt pay "a bloody interest premium", thanks to being part of the Eurozone. Even the loan packages they got in the past 5 years were basically for free. As of now after the debt cuts of the past, basically all of Greece's debt are owed to her fellow Eurozone members, i.e. the European taxpayers.

But nothing is as sweet as a good Asterix story against the big bad Romans I guess.

To the part "it will be worked out" somehow someway...there are scores of countries in the world which are poorer than Greece, quite a few in her neighborhood (Romania, Bulgaria, Albania, Serbia, Macedonia, Bosnia). So of course Greece will survive this but the issue is: pressumably much closer in lifestyle to the aformentioned nations.

[Arakan]

Oh Yannis declared his resignation. Of course he followed "wishes"...I say: coward.

But hey I guess he will sell quite a few books in the future and will earn a shitload of money when touring around the world, selling himself as the "martyr" against capitalism.

[ummester]

Oh Yannis declared his resignation. Of course he followed "wishes"...I say: coward.

I considered the coward explanation but, if it was about running away from being hung out to dry when it turns to shit, why is he hanging around to help the PM? Evidence seems to suggest that his resignation has been sought before creditors will communicate with the PM.

[Arakan]

Evidence seems to suggest that his resignation has been sought before creditors will communicate with the PM.

This is what Yannis himself said. It's a pretext. I wouldnt wonder if his bullshit accusation of terrorism was deliberate to burn all bridges, so that he can leave the sinking ship.

[baxus]

To the part "it will be worked out" somehow someway...there are scores of countries in the world which are poorer than Greece, quite a few in her neighborhood (Romania, Bulgaria, Albania, Serbia, Macedonia, Bosnia). So of course Greece will survive this but the issue is: pressumably much closer in lifestyle to the aformentioned nations.

As someone living in one of those countries (Serbia, to be exact), I must say that Greek people will not have it easy especially after being used to a better lifestyle.

It's been over 20 years since Yugoslavia fell apart and people all over the place (with a possible exception of Slovenia) still talk how life was much better back in the day.

Sure, I don't expect Greece to fall as low as remnants of Yugoslavia did back in the early '90s, but it will still be hard.

[Solmyr]

Yup all fine except Greece didnt pay "a bloody interest premium", thanks to being part of the Eurozone. Even the loan packages they got in the past 5 years were basically for free. As of now after the debt cuts of the past, basically all of Greece's debt are owed to her fellow Eurozone members, i.e. the European taxpayers.

It's not Greece's fault it was offered a too favourable deal. If you're offered a loan at a lower-than-market interest rate, would you not take it? And when you can't pay it back later and the bank wails that you cheated it, should you feel guilty? It's the bank's fault, not yours, they failed to perform their due diligence.

Edit: I can echo baxus' statement. Greek people are in for rough times, but they will survive.

[Arakan]

As someone living in one of those countries (Serbia, to be exact), I must say that Greek people will not have it easy especially after being used to a better lifestyle.

It's been over 20 years since Yugoslavia fell apart and people all over the place (with a possible exception of Slovenia) still talk how life was much better back in the day.

Sure, I don't expect Greece to fall as low as remnants of Yugoslavia did back in the early '90s, but it will still be hard.

Out of interest: how is the Greek drama viewed in Serbia?

Many of my football mates come from Serbia and Bosnia and interestingly they all have quite a negative view on the Greek behavior.

[Arakan]

It's not Greece's fault it was offered a too favourable deal. If you're offered a loan at a lower-than-market interest rate, would you not take it? And when you can't pay it back later and the bank wails that you cheated it, should you feel guilty? It's the bank's fault, not yours, they failed to perform their due diligence.

Edit: I can echo baxus' statement. Greek people are in for rough times, but they will survive.

First: I refuted your claim that Greece paid an interest premium. What you are doing now is just moving goalposts.

The Banks are laughing their asses off at this stage. Anyway a discussion with you makes no sense because we simply have a different approach to life. My father taught me one thing that when you borrow money from someone your honour demands it to pay it back.

[Lyanna Stark]

The Banks are laughing their asses off at this stage. Anyway a discussion with you makes no sense because we simply have a different approach to life. My father taught me one thing that when you borrow money from someone your honour demands it to pay it back.

A person is not a country though, and often the reverse is true of what you need to do if you have private debts as opposed to national debt. For instance, when cutting down on spending to be able to pay down your personal debt may be a good thing, for a country to cut back on spending can have disastrous consequences, not just short term but long term. A country who keeps cutting back on spending on infrastructure and education etc is a country with no future.

[Jo498]

That link in #2 is to very enlightening article.

here is another good article with chronology (German, by an Austrian (but not of the Austrian School) economist)

http://www.profil.at/ausland/stephan-schulmeister-griechenland-weg-in-die-depression-5746226

[Arakan]

A person is not a country though, and often the reverse is true of what you need to do if you have private debts as opposed to national debt. For instance, when cutting down on spending to be able to pay down your personal debt may be a good thing, for a country to cut back on spending can have disastrous consequences, not just short term but long term. A country who keeps cutting back on spending on infrastructure and education etc is a country with no future.

I am a supporter of Keynes and I was never a big supporter of austerity. But to efficently and effectively spend money to invest, you need a functioning economic system. You need people paying their taxes, you need to minimize the cancer of corruption, you need to have a innovative and competitive fundament. Where is this fundament in Greece, where are the structural reforms to attract foreign Investment?

But no economic system can exist when debts are not honored and can be simply brushed away. Especially when we are speaking of loans since 2010 which basically were for interest free and with very favourable repayment conditions.

If Greece weren't protected by the Eurozone, no one would loan them money or only to outrageous interest rates.

Why is it that Syriza talk a lot of "pride"? Are the other countries (whose representatives have been accused of terrorism) not allowed to have Pride but simply should shut up, pay and accept anything?

[ummester]

This is what Yannis himself said. It's a pretext. I wouldnt wonder if his bullshit accusation of terrorism was deliberate to burn all bridges, so that he can leave the sinking ship.

Time will tell. If he hangs around, through the thick and thin to come, he's not a coward. If he leaves Greece high and dry, he is. Too early to judge, though I hope he is a financial idealist, who is genuinely trying to do the better thing by his country. The world needs more leaders that are prepared to try and pull the current system down.

[dalThor]

Whether or not one believe's that Greece's interest rates were high or low, the simple fact remains that the vast preponderance of the bailout money has gone right back into the coffers of the lenders.

Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.

Most of the money went to the banks that lent Greece funds before the crash.

Unlike most of Europe, which ran up large budget deficits to protect pensioners and welfare recipients, Athens was then forced to dramatically reduce its deficit by squeezing pensions and cutting the minimum wage.

http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go