Greek spending has actually been rising

[opebo]

Germany took painful measures during the early years of this decade to increase competitiveness and they are now reaping the benefits of that.

Translation - they made life worse for the working class.

In fact of course the real problem with Europe isn't Greece, it is Germany.

[Franzl]

Obviously. It's always good policy to punish success.

[Mopsus]

Obviously. It's always good policy to punish success.

Ah, but, you see, Germany is only successful because of thievery... from Europe... or... the poor... or... something... yeah.

[Landslide Lyndon]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

[All Along The Watchtower]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

We're too generous. We love them, they don't love us back.

[Gustaf]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

Californians and New Yorkers can, at least in theory, outvote Alaska and Mississippi.

I think your approach, saying that "if Germany wants to be the boss they have to pay for us" is wrongheaded. It's more that "if Germany is to pay for Greece, they'll want to be the boss"

Right now, they're paying without control. But control over decisions has to be aligned with carrying the risks. Otherwise, you have a recipe for disaster.

[Landslide Lyndon]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

Californians and New Yorkers can, at least in theory, outvote Alaska and Mississippi.

I think your approach, saying that "if Germany wants to be the boss they have to pay for us" is wrongheaded. It's more that "if Germany is to pay for Greece, they'll want to be the boss"

Right now, they're paying without control. But control over decisions has to be aligned with carrying the risks. Otherwise, you have a recipe for disaster.

California and New York outvoted Alaska and Mississippi back in 2000. The rest as they say is History.

And maybe you haven't noticed, but nothing gets done in EU until Germany approves. Germany's unwillingness to act, due to internal politics, is after all the reason why this crisis dragged on for months the first half of 2010, exacerbating the problem.
And it was Germany who insisted the IMF be a part of the rescue package and then put in place punitive conditions as to make an example out of us, despite vocal opposition by France and the IMF.

[Gustaf]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

Californians and New Yorkers can, at least in theory, outvote Alaska and Mississippi.

I think your approach, saying that "if Germany wants to be the boss they have to pay for us" is wrongheaded. It's more that "if Germany is to pay for Greece, they'll want to be the boss"

Right now, they're paying without control. But control over decisions has to be aligned with carrying the risks. Otherwise, you have a recipe for disaster.

California and New York outvoted Alaska and Mississippi back in 2000. The rest as they say is History.

And maybe you haven't noticed, but nothing gets done in EU until Germany approves. Germany's unwillingness to act, due to internal politics, is after all the reason why this crisis dragged on for months the first half of 2010, exacerbating the problem.
And it was Germany who insisted the IMF be a part of the rescue package and then put in place punitive conditions as to make an example out of us, despite vocal opposition by France and the IMF.

...


So, here is the chain of events, again.

Greece goes bankrupt.

Greece asks Germany for money.

Germany puts in place certain demands to give that money.


It isn't as if Germany first put these demands out and now you can ask for money in exchange for following those demands.

And the introduction of the euro, as I noted, is a prime example of something being pushed through without Germany wanting it. France has been calling the shots in EU development up to quite recently. Are you not aware of that?

[Sbane]

Europe needs to form a fiscal union, or they should just say "fukc it" and get rid of the Euro. Neither is a viable option though. Ugh.

[Sam Spade]

Greek short-term bond yields have now risen above their post "bailout" highs - 2 yr bond yielded 44% today. 

lol, that's called default.

[republicanism]

And adoption of the Euro did not lead to skyrocketing exports in Germany.

While you are basically right about that, if the Euro would go down now, a reintroduced D-Mark (or what ever a German currency would be called) would be revalued and go through the roof and hurt our exports badly.

Which, in the long run, wouldn't even be such a bad thing imho, as Germans were forced to give up the policy of wage restraint we practiced in the last 20 years.

But it would still be very painful. So instead, we pay some money to avoid that. Look at it as a charge we pay, in exchange for the privilege of cheap exports.

If we bailout Greece every 10 years or so, it should still be a net surplus for Germany.
Not that this is a healthy way of interacting between the Euro nations, but well, the whole Euro wasn't a healthy idea in the first place.

[Franzl]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

To an extent. Yes, I agree. I don't think their money should go to MS and AK, at least the way it's done now.

But at least....despite everything....it is one country consisting of Americans. As much as I support decentralization, it's still true.

I like you, px...but Greece isn't my country and Greeks aren't entitled to (one of my) country's money I think we made a massive mistake getting so deep into this union so quickly. No offense, but if you're going to do somethink like the Euro, it needs to be done among countries that are somewhat comparable in economic power and wealth. I'm afraid Greece never really qualified...admitting countries like crazy was the feel-good pro-Europe position. It just had to be done!

[Landslide Lyndon]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

To an extent. Yes, I agree. I don't think their money should go to MS and AK, at least the way it's done now.

But at least....despite everything....it is one country consisting of Americans. As much as I support decentralization, it's still true.

I like you, px...but Greece isn't my country and Greeks aren't entitled to (one of my) country's money I think we made a massive mistake getting so deep into this union so quickly. No offense, but if you're going to do somethink like the Euro, it needs to be done among countries that are somewhat comparable in economic power and wealth. I'm afraid Greece never really qualified...admitting countries like crazy was the feel-good pro-Europe position. It just had to be done!

Unlike some of my compatriots, I never asked for charity. I understand the harsh conditions (but not the punitive ones) and if I were in your shoes I'd probably feel the same.
But it wasn't feel-good sentiments that put Greece and Portugal into the Eurozone. It was Germany's calculation that thanks to the wage-restraint policy that followed it would dominate financially over these countries (and the massive trade surplus shows they were right).

And adoption of the Euro did not lead to skyrocketing exports in Germany.

While you are basically right about that, if the Euro would go down now, a reintroduced D-Mark (or what ever a German currency would be called) would be revalued and go through the roof and hurt our exports badly.

Which, in the long run, wouldn't even be such a bad thing imho, as Germans were forced to give up the policy of wage restraint we practiced in the last 20 years.

But it would still be very painful. So instead, we pay some money to avoid that. Look at it as a charge we pay, in exchange for the privilege of cheap exports.

If we bailout Greece every 10 years or so, it should still be a net surplus for Germany.
Not that this is a healthy way of interacting between the Euro nations, but well, the whole Euro wasn't a healthy idea in the first place.

Thank you, you put it better than I ever would.
And I'm sure that if Germany concludes that the costs of bailing out the PIGS are greater than the profits, it will have little problem abandoning the Euro and returning to the Mark. The whole notion that some people propagate about Germans being dragged into the Euro against their will, is laughable. 

[Gustaf]

Obviously. It's always good policy to punish success.

I guess Californians and New Yorkers could say the same seeing how their money go to welfare states like Alaska and Mississippi.

To an extent. Yes, I agree. I don't think their money should go to MS and AK, at least the way it's done now.

But at least....despite everything....it is one country consisting of Americans. As much as I support decentralization, it's still true.

I like you, px...but Greece isn't my country and Greeks aren't entitled to (one of my) country's money I think we made a massive mistake getting so deep into this union so quickly. No offense, but if you're going to do somethink like the Euro, it needs to be done among countries that are somewhat comparable in economic power and wealth. I'm afraid Greece never really qualified...admitting countries like crazy was the feel-good pro-Europe position. It just had to be done!

Unlike some of my compatriots, I never asked for charity. I understand the harsh conditions (but not the punitive ones) and if I were in your shoes I'd probably feel the same.
But it wasn't feel-good sentiments that put Greece and Portugal into the Eurozone. It was Germany's calculation that thanks to the wage-restraint policy that followed it would dominate financially over these countries (and the massive trade surplus shows they were right).

And adoption of the Euro did not lead to skyrocketing exports in Germany.

While you are basically right about that, if the Euro would go down now, a reintroduced D-Mark (or what ever a German currency would be called) would be revalued and go through the roof and hurt our exports badly.

Which, in the long run, wouldn't even be such a bad thing imho, as Germans were forced to give up the policy of wage restraint we practiced in the last 20 years.

But it would still be very painful. So instead, we pay some money to avoid that. Look at it as a charge we pay, in exchange for the privilege of cheap exports.

If we bailout Greece every 10 years or so, it should still be a net surplus for Germany.
Not that this is a healthy way of interacting between the Euro nations, but well, the whole Euro wasn't a healthy idea in the first place.

Thank you, you put it better than I ever would.
And I'm sure that if Germany concludes that the costs of bailing out the PIGS are greater than the profits, it will have little problem abandoning the Euro and returning to the Mark. The whole notion that some people propagate about Germans being dragged into the Euro against their will, is laughable. 

So...you think I have a conspiracy theory and your idea is that Germany created the Euro to be allowed to dominate financially over Greece and Portugal? Why would they even want that? Germany has never favoured a fiscal union for Europe.

The only reason Germany is gaining from the Euro NOW is the fact that the other countries ed up. Had they acted like Germany that gain wouldn't have been there.

Why do you think Germany demanded the stability pact to be introduced as a prerequisite for having the euro? Was it because they really, really wanted the euro and wanted the other euro countries to screw up their public finances so they could take over Europe (sane theory)?

Or was it because they were worried about ending up having to pay for those other countries and not really wanting the euro in the first place? (craaaaazy conspiracy theory)?

Germany has tied themselves emotionally to the European project as a way of dealing with the Nazi past. That's why they've been unable to say no to stuff (until fairly recently). And it's why France has been allowed to push the European agenda throughout most of the EU's history. This is rather well-known and hardly a conspiracy theory. It would be very difficult, economically, yes, but above all politically for Germany to abandon the euro.

[republicanism]

The only reason Germany is gaining from the Euro NOW is the fact that the other countries ed up. Had they acted like Germany that gain wouldn't have been there.

The funny thing is, that it is just impossible that everybody "acts like Germany". If every nation had a export surplus, practiced wage restrain and had a high saving ratio, the world economy would collapse.

If one has a surplus, another one has to have a deficit, inevitable. Germany competed (and still competes) its customers into the ground, and than punishes them for this very fact.

I'm not saying that the GIPS are without guilt, but so ain't Germany.

[Gustaf]

The only reason Germany is gaining from the Euro NOW is the fact that the other countries ed up. Had they acted like Germany that gain wouldn't have been there.

The funny thing is, that it is just impossible that everybody "acts like Germany". If every nation had a export surplus, practiced wage restrain and had a high saving ratio, the world economy would collapse.

If one has a surplus, another one has to have a deficit, inevitable. Germany competed (and still competes) its customers into the ground, and than punishes them for this very fact.

I'm not saying that the GIPS are without guilt, but so ain't Germany.

Yeah...not everyone can have an export surplus, that's true. There is no obvious reason why not everyone could practice wage restrain or have a high savings ratio. Besides, this only applies within the euro zone so any imbalances could be picked up by other countries, say in the third world.

Anyway, your reasoning here is something along the lines of me losing my job to you because I'm an alcoholic and then complaining that if you were also an alcoholic I might have been allowed to keep my job. True as that may be it seems more reasonable to say that had I not been an alcoholic I would have kept my job and the appropriate course of action is to get fewer alcoholics rather than more.

And Germany had to increase competitiveness because their economy was doing so badly in the first years of the euro.

If your point is that it's problematic to force all the euro countries to adopt the same policies and the same level of competitiveness, I agree. That's why the euro is such a bad idea in the first place and should not have been adopted. But given that it's there it seems smarter to try and make all countries have equally strong economies rather than make them all conform to the weakest economy.

[Gustaf]

Sorry but I didn't see this topic earlier.

1)The spending rising is a combination of a deeper recession that forces increased safety net spending and the unwillingness of certain parts of the administration to tighten their belts.
It's disappointing and frustrating but somewhat expected. Going cold turkey after decades of profligacy was never going to be easy, especially when large parts of the society and the political world refuse to accept reality and demagogue like it's the 90's (even the conservative parties).
Also the fact that our constitution says that civil servants are permanent employees that can't be fired makes our choices even more limited when it comes to scaling down our public sector.

2)Ousting Greece out of the Eurozone will only make matters worse as it will show to other EU countries that the concept of European Solidarity is just empty words and that if they fall in difficult times, the great powers will have no qualms to do the same to them. Needless to say that will mean the end of EU as a legitimate organization that can influence world policy (even though I understand that many people here don't see anything wrong with that).

3)Cutting military expenditures is an excellent solution. There is only one problem with that: Germany and France vehemently oppose such a measure. The reason? We are one of the best clients of their military/industrial complexes.
When our prime minister visited Merkel and Sarkozy, it was really hilarious seeing them advising a strict austerity plan and at the same time lobbying for even more german and french weapon purchases by our army.

4)If the Eurobond means Germany paying more, then so be it. You can't pretend to be the boss and when time comes to fulfill your responsibilities to start whining about how hard is your job. Germany didn't have a problem when greek banks borrowed money which Greeks used to buy German goods or when the adoption of Euro led to skyrocketing exports and its commercial surplus. 
And the idea that Germany didn't want the Euro is about as credible as the conspiracy theories about Obama's birth certificate.

You should probably bring this up with Wikipedia, they've apparently been taken over by the Birthers:

"France and the UK were opposed to German reunification, and attempted to influence the Soviet Union to stop it.[7] However, in late 1989 France extracted German commitment to the Monetary Union in return for support for German reunification.[8]"

http://en.wikipedia.org/wiki/History_of_the_euro#Relaunch

I'd hope for an apology for you calling me a conspiracy theorist and a propagandist pushing ridiculous theories when I just stated the standard history but I suspect that would be too much to ask.

[Landslide Lyndon]

Yeah, a wikipedia article talking about something that happened 13 years before the Euro was introduced (and never mentioning explicit official German opposition) is undeniable proof that you were right all along.

Happy now?

[opebo]

Obviously. It's always good policy to punish success.

We traditionally do punish the successful - people who are very good at murdering, raping, stealing can all be punished with jail terms (except if they are 'soldiers', or bankers, or businessmen). 

Please remember that all economic 'success' is, under the current system, also a crime against others (and of course I don't mean 'crime' in the sense of a 'moral wrong' - I mean simply that the success was in utilizing power over others, not in some namby pamby 'skill' or 'talent').  And thus, in every society where there are social or economic problems resulting from the impoverishment of some members, the first thing we have to do to solve such problem is to jettison the idea that the poorer party caused the problem - only the richer can cause the problem.  In this case Germany by its 'success' is caught red-handed, and Greece by its 'failure' is completely acquitted.

[Mopsus]

Obviously. It's always good policy to punish success.

We traditionally do punish the successful - people who are very good at murdering, raping, stealing can all be punished with jail terms (except if they are 'soldiers', or bankers, or businessmen). 

Please remember that all economic 'success' is, under the current system, also a crime against others (and of course I don't mean 'crime' in the sense of a 'moral wrong' - I mean simply that the success was in utilizing power over others, not in some namby pamby 'skill' or 'talent').  And thus, in every society where there are social or economic problems resulting from the impoverishment of some members, the first thing we have to do to solve such problem is to jettison the idea that the poorer party caused the problem - only the richer can cause the problem.  In this case Germany by its 'success' is caught red-handed, and Greece by its 'failure' is completely acquitted.

See? Exactly what I said.

[Gustaf]

Yeah, a wikipedia article talking about something that happened 13 years before the Euro was introduced (and never mentioning explicit official German opposition) is undeniable proof that you were right all along.

Happy now?

Ok, now you're being hilarious.

So, you might think that the euro just jumped into existence by itself. That is not the case though. The article I quoted is titled "history of the euro"

The reason for this is that it explains the HISTORY of the euro. You see, the decision to launch the Euro was, surprising and counter-intuitive as it may seem, taken BEFORE it was actually created!! Who could have guessed!

So, that decision is what is known as the Maastricht treaty. It was approved in the early 90s. And it was done because the Germans were forced to accept it in exchange for getting unification. Like the article quotes.

Now, you claim the article is "never mentioning explicit official German opposition" That's strange, since the paragraph I quoted (I'm assuming you read the link) says: "Germany was cautious about giving up its stable currency, i.e. the German Mark" I know you don't like facts to trouble your prejudices but you might want to read this: http://specials.ft.com/euro/FT3SS4YUTPC.html It describes German opposition to the Euro.

But, then again, since I was offering a ridiculous conspiracy theory, I assume you have plenty of proof of your position, right? I mean, the Wikipedia article probably mentions Germany creating the Euro to gain dominance over Europe, since that's what actually happened? Please feel free to quote all the sources you have for this self-evident position of yours.

[Landslide Lyndon]

Thirteen years is VERY long time, even for a multi-year project like the Euro. A lot of things had changed between 1989 and 2000 when the final decision was taken.

The wikipedia article is vague about what kind of opposition existed in Germany: was it the government that opposed it, the parliament, the voters? And "being cautious" isn't the same as being opposed.
And of course according to the article even France (the driving force of the project according to you) approved the creation of Euro with only a narrow majority.

My position is reality based, unlike yours. Unless of course you think that Germany being the big beneficiary of the creation of the Eurozone is just a coincidence which nobody, not even Germans themselves could've predicted.

[Gustaf]

Thirteen years is VERY long time, even for a multi-year project like the Euro. A lot of things had changed between 1989 and 2000 when the final decision was taken.

The wikipedia article is vague about what kind of opposition existed in Germany: was it the government that opposed it, the parliament, the voters? And "being cautious" isn't the same as being opposed.
And of course according to the article even France (the driving force of the project according to you) approved the creation of Euro with only a narrow majority.

My position is reality based, unlike yours. Unless of course you think that Germany being the big beneficiary of the creation of the Eurozone is just a coincidence which nobody, not even Germans themselves could've predicted.

Final decision? You're not seriously claiming the decision was taken in the late 90s are you? Maybe you should read up on this. Maastricht Treaty. Google it.

Now, the French voters almost rejected the Euro, but that's because the Euro has not been popular hardly anywhere in Europe (except in Club Med where people expected to piggy-back on Germany). The French political establishment, on the other hand was heavily in favour. Again, this is very, very basic. It's like I'm teaching a child on basic European politics. I suspect you're just pretending not to be aware of this to avoid having to admit that you were wrong.

Again, your claim is that Germany created the Euro to gain dominance over Europe. You have yet to come up with anything to back this up. Please. Since it's the mainstream idea (as opposed to my conspiracy theory) I assume it must be cited somewhere right? Maybe on Wikipedia? The Economist? Wall Street Journal? Take your pick.

And of course, I already explained why Germany is now benefitting to the Euro. They did the things that Greece or any other country could have done. Increased competitiveness. There is no secret conspiracy involved, just sound policy in face of difficulty.

[Politico]

I would reject this idea that Germany wanted the Euro or wants to keep the Euro in order to gain/maintain "dominance" over Europe. It just does not make sense and does not jive with history, as others have pointed out. I think the current state is mostly a matter of much of Germany wanting a peaceful Europe, which is most likely achieved through a united Europe. This is a noble goal and what one would expect from Germany considering 20th century history, the guilt that comes with that, etc.

With that said, it is hard to see the Euro being around at the turn of the decade. It is not possible to coordinate fiscal policy effectively unless all nations give up their sovereignty, which is not going to happen. As a result, how does one sustain the common currency of the Euro indefinitely?

I do believe the European Union itself, the single market and such, will likely remain in place beyond this decade at least. However, I suspect by 2020 each nation will have its own unit of currency (Think of it being the EU as it is today, but every nation is like Britain and Sweden in that they maintain their own currency and monetary policy instead of using the Euro). The biggest question, in my mind, is how they are going to manage to move from the Euro back to national currencies. The shedding of the Euro will probably not be pretty nor nearly as smooth as the adoption of the Euro was...

[Landslide Lyndon]

Oy.

You know, as in the DSK thread you take something someone writes, interpret it completely different and then launch a self-indulging tirade about how wrong is what the other person "says" and how right your opinion is. No wonder you are so sympathetic every time we mock people like Palin.

Just because something was negotiated and written it doesn't mean that its implementation is inevitable. Otherwise we'd have a European Constitution by now. Heck, just see what happens now with the July decisions about the bailout mechanism.
If Germans REALLY didn't want the Euro then they could have used that "overwhelming" public opposition and scuttled the entire project, Maastricht or no Maastricht.

And by saying that the Euro was "popular" here in the Mediterranean you are showing your ignorance. Here at least it was always viewed with suspicion, if not outright hostility, and the rising inflation that came with its adoption did nothing to enhance its popularity. Even during better times the populace always remembered fondly our old drachma.

The "painful" measures Germany took was a decision to increase wages by a lower % than the rest of the Eurozone countries. That was impossible to do here (and probably the other regional countries) because our wages were already lower and because of the inflation caused by the Euro. Obviously it was a sound policy decision but to the detriment of the other european economies and not exactly helpful in the supposed ongoing quest of erasing the inequalities between the EU countries.   

This is the last time I respond to you. You can now have all the fun you want by misinterpreting what I wrote and giving another lesson to your "ignorant" pupils.