Will Greece exit the Euro? (Thread now a poll)

Simply based on some background knowledge about these presidents. And, no, I do not even plan to prove this. Continue to believe they are heros and so on, I couldn't care less.

Ask yourself, you have quoted them.

Not interested. If you prefer to believe NYT lies, I couldn't care less. And,given that I consider sources as more or less reliable which you reject outright as pure propaganda, and reverse, there is in fact no chance to prove you something which contradicts Western propaganda. I know how to extract information from propaganda sources, by the way, but this is a subtle technique, and also gives you nothing sufficient to prove something to a believer. The article in the NATO-paper Zeit about the Greek press was such a point - it nicely described the state of the Greek press as one-sided propaganda for a Yes. The journalist obviously thought this is allowed, once it is only about the Greeks, not the NATO press in general.

I prefer high quality information sources. The Zeit has been one in the past, 20 years ago or so. If they comfort my beliefs or not is secondary. If I think Stratfor has high quality, I read Stratfor, even if it is American and fights on the side of the Empire. Putin himself is, an an information source, quite good, at least in comparison with most other politicians. Despite the fact that he is not a libertarian, thus, many things he says don't comfort my libertarian ideas.

 

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Agree with everything you say. I see the EU has given them a further extension of a few more days and there will be an absolutely final emergency meeting of ALL 28 EU countries, not just those in the Eurozone, on Sunday, which will decide whether to stop supporting them and let them go bust, or not.

I think either they will cut them off or they will agree to try to get support for assisting Greece further from their own national parliaments - which will not be forthcoming in Germany, Netherlands or Finland and possibly not in Spain, Ireland, Portugal Estonia, Lithuania and Poland either. So I think Greece will be out, either immediately or within a few weeks. And then as you say we will be into humanitarian aid while the chaos in Greece eventually leads to Syriza being replaced with a government that recognises the need to reform and collect taxes - a process that could take a decade. The frightening thing is that Greece itself seems to suffer from a kind of suicidal euphoria and to have embraced victimhood, blaming foreigners for their troubles, when in fact it is their own governments that have failed to make them into a modern functional state, of the standard that the EU demands. This could breed further political extremism and threaten democracy.

Meanwhile there will be a quiet I-told-you-so from countries like Britain that pointed out the flaws in the Euro concept at the start (Maastricht) and refused to join it. Thank you, John Major, for that. (And, I suppose, thank you to Gordon Brown, who stymied Blair's later rather feeble attempts to get Britain into the Eurozone.) And, one hopes, a serious drive for fiscal integration and acceptance of a full transfer union within the Eurozone, now that the bad actor has been expelled. All the others are "good guys" by comparison - or at least that has to be the way Merkel presents it domestically, to justify further German handouts to the periphery.

 

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This just in:
Greek Prime Minister Alexis Tspiras has announced that the rallying cry "We are Sparta" is to be replaced with "I will gladly pay you Tuesday for a Gyro today".

Bismarckian socialism *tick*
- Two world wars.
Leninist socialism *tick*
- Hundreds of millions slaughtered and enslaved
Supra-National Socialist EU *tick*
- .... ..... ....


Big God, Little State
Little God, Big State
You got to give it to Theo- and State-bots, if anything, they are persistent.

 

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If you are trying to tell us that Tsipras is from the Far Left, I think we all know that by now.

Your assertion that Bismarck's social policies in the 1880s (described here: https://en.wikipedia.org/wiki/State_Socialism_(Germany) )
were the cause of the First and Second World Wars strikes me as eccentric, to the point of derangement. How on earth do you justify it?

 

How do you think these wars were funded? As an example, take our war. We've (Americans) spent trillions on it, and continue to spend trillions. Where's that money coming from? I don't recall the State instigating a War Tax. So? How's the never ending war being funded?

Anyway, from: How has Bismarck escaped most of the blame for the first world war?

 

What linkage do you see between Bismarck's social policies, which you are alleging are responsible, with how these wars were funded? I cannot fathom what you are talking about. Surely, any expenditure by the state on social policy would reduce, not increase, the funds available for waging war, wouldn't they?

In any case, as I understand it, the sorts of social policies Bismarck followed were taken up by countries such as Great Britain too. Are you suggesting that somehow this too led to war? How? By what mechanism?

 

I don't expect much of substance to come from the Sunday meeting. Tsipras will present vague incoherent proposals. Merkel won't be satisfied. So will the Eurozone leaders or the EU as a whole respond by taking resolute action? Probably not, that's not how Europe works. (They talk, and if negotiations go nowhere, they schedule more meetings.) The way that the EU is set up, actually doing something requires unanimity, which they won't have. So I expect another murky opaque meeting with no clear result. Whatever result emerges from the meeting will be de-facto, implicit in the fact that Greece won't have received a new bail-out deal.

So things will totter along the way they are now for eight more days, until July 20. That's when, as I understand it, 3.5 billion euros worth of Greek government bonds held by the European Central Bank as collateral for its Emergency Liquidity Assistance program supporting Greek banks become payable and due. Greece has already said that it won't be able to make the payment, unless it has a new bail-out agreement by then. So the whole thing will fall into Mario Draghi's lap. (I don't envy him.) The ECB's rules seemingly require that if a government defaults on repaying its government bonds, the ECB can no longer accept that government's bonds as collateral. But Greek banks apparently don't have anything else. The Greek government has been funding its deficits by selling government guaranteed bonds, and there was nobody willing to buy them except the Greek banks. If the bonds become worthless, so do the banks.

So Mario Draghi will have the decision on July 20 or in the days following, whether to terminate Emergency Liquidity Assistance to the Greek banks, forbidding them from drawing upon the 80-something billion euro emergency facility set up to keep Greek banks at least marginally liquid. It will be a momentous decision, since cutting them off will mean bank failures and the collapse of the Greek economy. Athens will have little choice but to start printing drachmas to recapitalize their banks, and the Grexit will have effectively taken place, without any explicit decision by the Eurozone leaders to expel Greece.

The pressure on Draghi will be tremendous. If the leaders' endless negotiations still hold out any continued hope for an eventual resolution, collapsing the Greek economy would be blamed squarely on him. So he will be under great pressure to ignore the ECB's own rules and to keep the ELA facility in place while talks continue, even without the required collateral.

Wouldn't a new bail-out agreement have to be ratified by the parliaments, since it would commit those governments to spending large sums of money? I can't see Greece's demands being very welcome in eastern Europe, which entered 1990 with nothing but dinosaur state-enterprises and had to undergo their own painful transitions to market economies. They will probably perceive Greece as cry-babies.

That's an interesting thought. If the Greek economy collapses and there is lots of suffering among the Greek people, its EU partners will be under great pressure to render humanitarian assistance. That might start to resemble the bail-out with a new name. But donors will have more control over how the money is spent, and there won't be the moral-contagion aspect. Other 'club med' countries will be less apt to want to follow that path themselves.

Any party in power in Greece will face the same problems if Greece exits the euro and loses large infusions of European cash necessary to finance their deficits. Greece will have to learn to live within its own domestic means.

Which suggests that if they reintroduce the drachma, they will probably print too many of them in hopes that their printing-press will make them all rich. So the new drachma will plummet in value relative to the euro and massive inflation will devastate Greece. Imports will disappear from store shelves and Greece isn't really self-sufficient in anything.

Right now, Syriza in Greece kind of reminds me of the early days of Hugo Chavez in Venezuela. And I'm old enough to remember Greece being ruled by military juntas. Hopefully the Greek people won't let Greece slide in those kind of directions.

That decision is looking very good in retrospect.

 

One the point about Draghi (who I agree is in an almost intolerable position and who I think is playing a brilliant game in the circumstances), I gather what he has done before is to offer to extend further loans to Greece on condition that they are guaranteed by the other Eurozone countries. That way, he avoids being put in the invidious position of being a central banker who is effectively deciding the fate of a nation, and passes the buck back to where it belongs, viz. among the heads of state of the EU countries, whose club it is. After all, cutting Greece off is not just a technocratic financial decision, it is a political (even geopolitical) one and so must be signed off by politicians.

 

It matters little how many reintroduced drachmas Greece does nor does not print. The reintroduced drachma will have little value regardless of how many newly introduced drachmas Greece prints or doesn't print. It will not buy them the foreign currency importers will need to buy the goods (e.g. oil, medicine, food, clothing, vehicles, tools, etc.) Greece needs. It's already a problem or Greece. The dwindling supply of Euros is already causing supply problems for Greek importers. Greece runs significant trade deficits, for every dollar of goods Greece exports it imports three dollars of goods. Greece is heavily dependent on imports. And Greece's foreign suppliers will want hard currency, not the newly introduced drachma. The will not want to bear the currency risk. Why would foreign suppliers want to hold newly introduced drachmas? What could they buy with the new drachma? The answer is not much, even if there was no inflation risk. There would be little demand for the new drachma, so it would have little value regardless of how many the Greek government creates.

Greece is suppose to deliver its plan/proposal to the Eurogroup today. The EU normally does kick the can down the road on virtually everything. But I think the patience of major European players is running thin with Greece and more specifically with Tsipras.

 

Europeans should thank God everyday Draghi is running the ECB.

 

Of course, these social policies strengthened the state. And a stronger state has more income to make war. Moreover, Bismarck has unified Germany into a state strong enough to fight a war. And, of course, one could blame him for the peace of 1870 being the base for future conflict between Germany and France - not that fatal like Versailles as the base for WW II, but of course not a base for German-French friendship too.

On the other hand, after 1870, when the aim of his wars, the unification of Germany, has been reached, his policy was very reasonable, with a strong interest in friendship as with Russia, as with England. With a continuation of this, there would have been no WW I, or in another, much better constellation for Germany.

 

Yes I don't for a moment doubt that Bismarck had very aggressive ambitions for the state he was forging and that his attitudes were in part responsible for what was to follow. What I take issue with is Michael's apparent blanket assumption that socialism is responsible for all the wars. I simply cannot see that the defining feature of Bismarck was any way what we call "socialism", or that the social provisions of the nascent German state were what led to the warmongering.

In the books I have read it was nationalism, not socialism, that was the pernicious mindset that set the countries on the road to war.

 

I know. And yet I have not heard or read one word of recognition of what he is managing to do. In addition to his technical abilities, which seem unsurpassed, the guy must have an iron constitution, balls of steel, the patience of a saint and world class acting talent. And he has that type of cool, rather reptilian, face that reminds me of those portraits of Italian Renaissance princes. Just Google his "images" and you'll see what I mean.

 

Socialism and Nationalism fit together like hand in glove.

How are we paying the trillions and trillions to fund our never ending wars? Is there a War Tax? Where is the money coming from?

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LOL

 

It would be more persuasive if you would offer some support for that remarkable assertion. Pasting a book title, with no argument, does not do the job.

 

That is just your usual dump of nonsense Michael. And how is that in any way related to the events in Greece? It isn't.

 

It appears Tsipras has given in to EU demands. Now he must get it through his parliament.

 

Most of the outside economists seem to agree that the only workable solution that would keep Greece in the Euro would be a voluntary writeoff of most of the Greek debt.

The problem with that is that a bunch of rich bankers would lose money from making bad loans to Greece (after corrupting and influencing Greek government, to get the Greek taxpayer on the hook) . They are trying to lay this off on the various taxpaying publics available, but they have a ways to go yet.

The other available option is an involuntary writeoff. That would work for Greece almost as well, on pure economic grounds (see Argentina, say), and would cost the rich bankers even more, so the operation now and for the past few months has been to arrange extra and more severe consequences than the straight economics would impose on such a default. The bankers's need is for maximum delay, so the bankers can lay off more of the eventual loss unto other people.

The penalties for this delay, which makes the eventual hole significantly deeper and muddier, they expect to be imposed on non-rich non-financiers.

 

We all need to grow up and get beyond this adolescent finger-pointing at some mythical bunch of evil "rich bankers". It is silly leftwing mythology that these "bankers" corrupted the previously noble Greek governments of the past. Greece has been a corrupt country, full of crooks and tax evaders, since I was a kid, 40 years ago. What happened was they joined the Eurozone, on data they had faked , and then used the implied safety net of the Euro to borrow huge amounts, at low interest rates, to satisfy their political client groups.

This crisis is half of their own making and half due to the intrinsic faults in the Euro currency concept, which failed them because it took away the discipline of a local currency whose value tracked the real health of their economy.

The money given to prop up Greece has come from individual taxpayers in the rest of the EU, notably from Germans. It is the German people (and the Dutch, the Finns and others feel the same) who are resistant to the idea of writing off this debt, not surprisingly. They feel this way precisely because they are NOT bankers. The real bankers (the IMF etc) do recognise that in reality the money is spent and can't be repaid. But in the EU, we have democracy. This means Merkel cannot just piss away the money she has been given by the taxes paid by her voters. She has to account for it to the Bundestag. That is the reason why "extend and pretend" is being used instead of upfront write-off. It is pragmatic EU politics.

If they do now agree a write-off, which I quite agree with you must come eventually, in some form, the question will be how the hell Merkel and the other N. Europeans can get their parliaments to sign off on it. It will be buggeringly difficult. My personal view is that it may now be better all round if Greece leaves the Eurozone and then the N European leaders can push for a full transfer union among the remaining members, on the basis that the one bad actor has been chucked out and the rest have done their duty and deserve help as good Europeans.