Greece II or: How I learned to stop worrying and love the euro.

[Hayyoth]

We're listening to him now. He's completely unrepentant. I doubt his tone is going to reassure anyone whom his latest deal today was addressed to.

He's doubling down on the referendum and has said how shameful the pictures of people lining up at the bank are. Of course, the cause of those lines are 'certain conservative circles'. Read: the IMF, et. al.

The guy's an idiot.

So he's saying that the referendum is going ahead and that folks should vote on the bail out, which he's just accepted anyway? Has he lost his fucking mind??

[The Marquis de Leech]

That would be true, if Greece was not stuck in the Euro. So they can't engage into "inflation mode". So where would they get new cash?

A default pretty much requires a Grexit. Trying to hang in the Euro after a default doesn't solve anything.

[A Horse Named Stranger]

So he's saying that the referendum is going ahead and that folks should vote on the bail out, which he's just accepted anyway? Has he lost his fucking mind??

He has not accepted a bail.

He made an offer for a bail out deal, which gives in to around 90% of the demands.

As of now, there's NO BAIL OUT DEAL ON THE TABLE TO ACCEPT! That ship has sailed.

[Solmyr]

You forgot the essential point: Greece cannot print its own money.

That would be true, if Greece was not stuck in the Euro. So they can't engage into "inflation mode". So where would they get new cash?

It was implied that a default would entail exiting the Eurozone (but not the EU). It would be near-impossible for a defaulted country that is stuck with a currency it cannot print to recover from a default.

Dropping the Euro might have net positive effects on Greece in the long term, so it's nothing as scary as the default in itself, and we've already established that even a default is not the end of the world.

[A Horse Named Stranger]

Yes, but Tsipras insists, that Greece will remain in the Eurozone. Now if your aim is to remain in the Eurozone, do you still think defaulting to IMF is not such a bad idea?

[Solmyr]

Yes, but Tsipras insists, that Greece will remain in the Eurozone. Now if your aim is to remain in the Eurozone, do you still think defaulting to IMF is not such a bad idea?

Technically it's not impossible to live through a default and remain in the Eurozone. Why you'd wanna do that is a different question.

He can just trade IOUs or use a form of barter or any other made-up temporary fiat currency imaginable to trade imports for exports.

[A Horse Named Stranger]

Well, bare in mind Greece is highly dependent on imports. And having your commercial banks running on IOUs... Like I said, I see the ECB pulling the plug for the Greek banks sooner or later. If you want to do that you must be highly masochistic. Greece is not Argentina that has natural resources (namely mining products) to sell. So this will not be over in 3 or 4 years. And you still have that unpleasentness of a dysfunctional administration.

[dalThor]

It was implied that a default would entail exiting the Eurozone (but not the EU). It would be near-impossible for a defaulted country that is stuck with a currency it cannot print to recover from a default.

Dropping the Euro might have net positive effects on Greece in the long term, so it's nothing as scary as the default in itself, and we've already established that even a default is not the end of the world.

In many ways, Greece under a sovereign currency is a good way forward. Were there someone at the helm other than Tsipras I would support such a move.

So he's saying that the referendum is going ahead and that folks should vote on the bail out, which he's just accepted anyway? Has he lost his fucking mind??

Pretty much. He continues to give completely contradictory messages. On the one hand he seems contrite and offers to accept a new bailout and in the next breath he exhorts the citizenry to vote against the very institutions he just asked for money from. Again.

[dalThor]

Sorry, double. Seems they can't even manage to keep teh Internetz working properly here.

[Hayyoth]

He has not accepted a bail.

He made an offer for a bail out deal, which gives in to around 90% of the demands.

As of now, there's NO BAIL OUT DEAL ON THE TABLE TO ACCEPT! That ship has sailed.

Yes he has, it's all over the news that he's accepted the bail out. And who says it's off the table? The IMF repayment hasn't been made but as far as I'm aware the other parts of the troika haven't withdrawn any offers.

Pretty much. He continues to give completely contradictory messages. On the one hand he seems contrite and offers to accept a new bailout and in the next breath he exhorts the citizenry to vote against the very institutions he just asked for money from. Again.

That's the impression I'm getting. He's asking people to vote no on the referendum when he's accepted already? On the surface it's insane but I suspect it's got more to do with him looking to save his sorry ass when it's realized by his own supporters what a mind fuckingly stupid idea his whole prisoner dilemma negotiating strategy was.

[A Horse Named Stranger]

There you are wrong.

Check Dijsselbloem or Schäuble.

The Bailout deal has expired yesterday, it coincided with the default of the IMF loan.

If he wants a new bailout deal, they would need to start from scratch, which would probably take months. And they made it clear.

• And here comes German finance minister Wolfgang Schäuble to poor some cold water on things:
  
• 01-Jul-2015 10:46:58 - GERMANY’S SCHAEUBLE SAYS NOTHING CHANGED IN FACT THAT THERE WAS NO AGREEMENT BETWEEN GREECE, CREDITORS BY MIDNIGHT
  
• 01-Jul-2015 10:51:07 - GERMANY’S SCHAEUBLE SAYS OLD EFSF PROGRAMME FOR GREECE HAS EXPIRED, NOW A NEW ESM PROGRAMME WOULD BE NEEDED WITH DIFFERENT CONDITIONS
  

I copied and pasted that from the Guardian website.

http://www.nytimes.com/live/greek-debt-crisis-live-updates/last-weeks-offer-is-no-longer-on-the-table-merkel-says/

In Berlin, Chancellor Angela Merkel indicated that the German government no longer considered the offer that the Eurogroup of eurozone finance ministers made to Greece over the weekend to be valid.

Ms. Merkel told lawmakers in an address to Parliament on Wednesday that the proposal had been tied to the aid program that expired at midnight Tuesday.

“With the expiration of the program, the basis for the offer has been removed,” Ms. Merkel said.

The chancellor repeated her view that the future of Europe depends on trust and compromise, but she added that Germany was not willing to make concessions at any price.

She emphasized that Europe’s strength meant that it was in a position to take time to hammer out a new aid program for Greece, and she made clear that the involvement of the International Monetary Fund, the European Commission and the European Central Bank would be essential.

“The overarching goal has always been to create a union of stability in Europe, with responsibility and corresponding rewards,” the chancellor said

Madame Lagarde

http://www.keeptalkinggreece.com/2015/06/28/lagarde-claims-greek-referendum-will-be-legally-invalid/

MF’s Managing Director Christine Lagarde finally found the needed strength to express her view on Greece’s Referendum. Speaking to BBC, Lagarde said that next Sunday (July 5th) referendum will not be valid as the creditors’ proposal and program end on June 30th.

“I can’t speak for the IMF program, because the IMF program is on, but the European financial arrangement expires June 30. So, at least legally speaking, the referendum will relate to proposals and arrangements that are no longer valid.”

[Shryke]

Fez, that's exactly what he was alluding to in his just-ended speech. Vote no and we can tell them to get stuffed and they'll listen this time!

:bang:

I believe the point is more that given the monumental nature of taking either decision, he is passing the buck via the referendum. So if anyone comes at him about what actions he takes, he can just say "Well, the people decided and I'm just exercising the will of the people".

[Biglose]

I believe the point is more that given the monumental nature of taking either decision, he is passing the buck via the referendum. So if anyone comes at him about what actions he takes, he can just say "Well, the people decided and I'm just exercising the will of the people".

I think the point of what his strategie might have been is mood. It becomes more and more obvious that they do not really know what they are doing.

There is a difference of some bullshit that reads great on a blog or in a newspaper and actual politics. The major one is, that it is not really bad, if you are wrong in the newspaper buissness if the story was juicy and you hit the taste of your audience. But if you ignore the facts on the ground in politics it ends badly. (Mostly not for you but for the people you have responsibility over. And then you might not get reelected)

[Shryke]

I think the point of what his strategie might have been is mood. It becomes more and more obvious that they do not really know what they are doing.

There is a difference of some bullshit that reads great on a blog or in a newspaper and actual politics. The major one is, that it is not really bad, if you are wrong in the newspaper buissness if the story was juicy and you hit the taste of your audience. But if you ignore the facts on the ground in politics it ends badly. (Mostly not for you but for the people you have responsibility over. And then you might not get reelected)

It doesn't matter if they know what they are doing really. The point of the referendum is to cover their asses on any decision they make. That is actual politics.

It's not like there's really any amount of knowledge that would actually save them though. Tsipras doesn't really have any options. Greece can't pay it's debts, just period. And the conditions imposed on them for the previous bailout are killing the Greek economy making that first part more true. And the troika have no interest in extending them another chance. So all he's got is bloviating.

[Biglose]

It doesn't matter if they know what they are doing really. The point of the referendum is to cover their asses on any decision they make. That is actual politics.

It's not like there's really any amount of knowledge that would actually save them though. Tsipras doesn't really have any options. Greece can't pay it's debts, just period. And the conditions imposed on them for the previous bailout are killing the Greek economy making that first part more true. And the troika have no interest in extending them another chance. So all he's got is bloviating.

Look, the repayment of most depts is scedualed in around 10 years. (If one reads the NSA documents about Merkel thoughts, whe thought about a depts cut. She probably can't do it right now, because it would be like spitting in the face of the other european contries. Look at the reaction to the development in italy, spain, or eastern europe.)

And about the conditions, well if a good part of your economy is based on depts meaning does not really exist is just building swimmingpools with money you do not have, of course that breaks apart the second the cash flow stops. The point is, that it is not sustainable. What could europe do? Support greece with around 50 billions every year? And as a matter of fact the greece economy was growing, then along came syriza.

Honest questions did you even read the last proposal? On top of all there were 30 billions worth of investments promised. People always say there should be a marshal plan for greece. That would be 2 times a marshal plan(germany), (if you break it down for the population 10 times). And that was the icing on the cake. An additional consession on top of everything else. Honestly if you read the comments of experts who are not just touting political talkingpoints, they can't for the love of god tell, why he rejected it. The EU has been paing the greek banks so they could pay out he pensions, salaries for government employies etc. 60 billion in this year alone. (Or even more, I did not even check for the last numbers)

So what else? Do you even know how hard this was (for probably merkel) to make happen. The finnish position still is that they want securities. (Which they actually got! The question is, if those securities are safe and if it turns out they are not, well guess what would happen. And yes, if one government says no, thats that. If I remember correctly the first reaction from finnland after greece walked out to say, that the deal is off the table. Meaning they were probably strongarmed into it. Well now, guess who might have been doing that and who might not even have a remote chance now to do it again.)

And again, thats 1 (in letters ONE) country, you think it looks so much better in the rest?

[Lyanna Stark]

Greece could continue to be a member of the EMU should they enter full default, but given the perceived urgent requirement for a competitive devaluation they won't. If there's no more extend and pretend money from the Germans what would be the point of staying in?

Did I ever claim I thought it would be a good idea to stay in the EMU and be unable to devalue? No, I did not. In fact I think an exit from the EMU and a devaluation should have been done years ago. Hell, I live in a country that devalued its currency during my life time. Not at all comparable of course, and it only sucked a little compared to what it's going to be like for the Greeks, but still something that makes more sense than the alternative, imho.

The main issue with your linked article which you claimed "nailed it" was that the person writing it seemed to have no idea that the EU and the EMU are different, and that exiting the monetary union does not necessarily mean exiting the EU. Not to mention the random blathering about socialism, which just goes to show that the article was so far from "nailing it" as it could possibly be.

In many ways, Greece under a sovereign currency is a good way forward. Were there someone at the helm other than Tsipras I would support such a move.

Pretty much. He continues to give completely contradictory messages. On the one hand he seems contrite and offers to accept a new bailout and in the next breath he exhorts the citizenry to vote against the very institutions he just asked for money from. Again.

I saw some articles discussion a re-election. Do you think that might happen if Tsipras sulks and moans a bit longer. He does come off a bit childish actually, even if it's always difficult to tell through translations since stuff can get lost.

[Shryke]

Look, the repayment of most depts is scedualed in around 10 years. (If one reads the NSA documents about Merkel thoughts, whe thought about a depts cut. She probably can't do it right now, because it would be like spitting in the face of the other european contries. Look at the reaction to the development in italy, spain, or eastern europe.)

And about the conditions, well if a good part of your economy is based on depts meaning does not really exist is just building swimmingpools with money you do not have, of course that breaks apart the second the cash flow stops. The point is, that it is not sustainable. What could europe do? Support greece with around 50 billions every year? And as a matter of fact the greece economy was growing, then along came syriza.

Honest questions did you even read the last proposal? On top of all there were 30 billions worth of investments promised. People always say there should be a marshal plan for greece. That would be 2 times a marshal plan(germany), (if you break it down for the population 10 times). And that was the icing on the cake. An additional consession on top of everything else. Honestly if you read the comments of experts who are not just touting political talkingpoints, they can't for the love of god tell, why he rejected it. The EU has been paing the greek banks so they could pay out he pensions, salaries for government employies etc. 60 billion in this year alone. (Or even more, I did not even check for the last numbers)

So what else? Do you even know how hard this was (for probably merkel) to make happen. The finnish position still is that they want securities. (Which they actually got! The question is, if those securities are safe and if it turns out they are not, well guess what would happen. And yes, if one government says no, thats that. If I remember correctly the first reaction from finnland after greece walked out to say, that the deal is off the table. Meaning they were probably strongarmed into it. Well now, guess who might have been doing that and who might not even have a remote chance now to do it again.)

And again, thats 1 (in letters ONE) country, you think it looks so much better in the rest?

You really seem to be mad about this. I have no idea wtf you are on about here, but it has nothing to do with anything I've said. And I don't think you get that the conditions imposed on the original bailout tanked the economy even worse then it would have otherwise and under the strictures of the Eurozone, Greece has no way to deal with this. It's not the debt that's the problem, it's that austerity tanks economies. Even the IMF has fully admitted the conditions of the bailout killed the Greek economy, which wasn't exactly healthy to begin with.

For all your ranting here, you can't get around the fundamental fact that you can't get blood from a stone. Greece simply cannot pay back this debt while part of the Euro. It will not happen.

[Arakan]

Yeah, as I am preaching for years now: a healing of the Greek economy and society is possible only outside the Eurozone.

Then the healing circle of devaluation and inflation (in controllable limits) can begin. Without this the Greek economy can never restructure itself and all EU funds will be like burning money.

Of course I am of the opinion that the EU should show solidarity towards Greece after GREXIT and then we can speak about a "Marshall Plan". Before GREXIT it's useless.

With GREXIT a new debt cut will be neccessary. Gernany will show solidarity I am sure of that.

[Hayyoth]

The main issue with your linked article which you claimed "nailed it" was that the person writing it seemed to have no idea that the EU and the EMU are different, and that exiting the monetary union does not necessarily mean exiting the EU. Not to mention the random blathering about socialism, which just goes to show that the article was so far from "nailing it" as it could possibly be.

I think George WIll knows the difference between the EMU and EU, but you're arguing 1) as if they were separate institutions which they're not and 2) that Greece could stay in when they default, which they practically can't.

[Lyanna Stark]

I think George WIll knows the difference between the EMU and EU, but you're arguing 1) as if they were separate institutions which they're not and 2) that Greece could stay in when they default, which they practically can't.

1. They ARE separate institutions (if you want to call the EMU and "institution" and I am not certain it is even the correct word for the EU either, since the EU is a political (at least for the "pillar" areas) and economic union). There are lots of countries who are not members of the Eurozone, i.e. the EMU who are at the same time members of the EU (the European Union) and I ought to know as I've lived in two different EU countries who are not members of the EMU. The money was a dead give away.

From the EU's own sodding page:

Economic and Monetary Union (EMU) represents a major step in the integration of EU economies. It involves the coordination of economic and fiscal policies, a common monetary policy, and a common currency, the euro. Whilst all 28 EU Member States take part in the economic union, some countries have taken integration further and adopted the euro. Together, these countries make up the euro area.

Not sharing fiscal policies, monetary policies or currency are pretty important differences between a Eurozone country and an EU country not in the Eurozone.

2. The main question is whether or not Greece will stay in the EMU, not whether it will exit the EU, which is a completely different thing. Nine EU countries are currently not members of the EMU and are doing just fine as EU countries without the Euro. You won't (and can't) get booted out because you don't accept the Euro, either by not agreeing to it in the first place (Denmark, the UK) or by avoiding it (Sweden).