Greek Referendum on IMF/Troika deal

[Velasco]

Greece should vote "no" and be ready to leave the Euro if necessary, says Krugman.

http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html?_r=0

Well, Greek government has chosen it. And wants its choice ratified in a popular vote.

No, that's false. Greek government has faced an ultimatum and refused to submit for legitimate reasons. Given that the situation is desperate, it's almost mandatory to confront the decission to people's verdict.

[ag]

No, that's false. Greek government has faced an ultimatum and refused to submit for legitimate reasons. Given that the situation is desperate, it's almost mandatory to confront the decission to people's verdict.

You have a strange notion of what ultimatum is. Ultimatum is what Austrians gave the Serbs in 1914.  It had a deadline of 48 hours and only two possible responses: yes and no. That was an ultimatum.

In contrast, Europeans have been talking to the Greeks for years now, and were very willing to continue to negotiate. It is the Greeks who broke the negotiations. In fact, the government seems to have done that without even talking to its own negotiators. The Greek government's "legitimate reason" seems to be simply that they lilke seeing Greek children starve.

[ag]

Greece should vote "no" and be ready to leave the Euro if necessary, says Krugman.

http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html?_r=0
 

Now, leaving the Euro is, probably, a legitimate thing to do under the circumstances. In fact, Greeks should have been negotiating how to do this, while minimizing the negative consequences for its people. Of course, they never even considered doing that - because the last thing they care about is the Greek people.

[Velasco]

More opinions.

"The way to Grexit and Beyond"

by Wolfgang Münchau

Financial Times
June 28, 2015

When a shock you predicted actually happens, it still feels like a shock. Alexis Tsipras was right to walk away. But it was a momentous decision nevertheless when the Greek prime minister rejected an offer that would have allowed it to pay its debt to the International Monetary Fund and the European Central Bank. What I am struggling to understand is why he suddenly decided to call a referendum on whether to accept a bailout for next Sunday.

There might be some super-smart strategy behind this beyond my capacity to comprehend. The problem with the referendum is that the offer on which the Greek people are asked to vote is no longer on the table. And the programme to which it relates expires tomorrow at midnight. Why should the Greeks vote Yes to a package the creditors themselves no longer support?

By far the biggest tactical error committed over the weekend, however, was the rejection by eurozone finance ministers of a five-day extension of the Greek bailout programme to beyond the referendum. With that decision, they foreclosed the only way to keep the show on the road. They have unwittingly strengthened the political argument of the Greek prime minister. He will now be able to say: first the creditors wanted to destroy the Greek economy with their austerity programme. And now they are hoping to destroy Greek democracy.

The Greek government's "legitimate reason" seems to be simply that they lilke seeing Greek children starve.

If they like to see children starve, it's a rather weird strategy. In that case it would have been easier just to follow the Troika's instructions.

[ag]

Just to clarify. Funnily enough, I am not far from Krugman in analysis. Yes, the worst is going to happen anyway - is happening as we speak. Given that it is happening, there is no point of Greece staying in the euro. I even agree that Greece "austering its way out of the trouble" is unrealistic - in fact, that has been my point for a long time. Greece is, at this point, would be less badly of outside the euro, than inside - no question there.

Where I disagree are three things. A. - I do not believe the other Europeans are to blame. They are also democracies and it is unrealistic to insist they subsidize Greece. Condititional on Greeks asking for subsidies they were getting much softer treatment than what any non-European country in similar circumstances would get from creditors.   B. - I do not Mr. Tsipras has any particular reason to politically exist. Especially under the circumstances. And C. - I tend to despise politicians for whom national pride and independence mean more than the wellbeeing of their citizens.

[ag]

If they like to see children starve, it's a rather weird strategy. In that case it would have been easier just to follow the Troika's instructions.

Oh, no. They will be much more efficient this way.

[Velasco]

Where I disagree are three things. A. - I do not believe the other Europeans are to blame. They are also democracies and it is unrealistic to insist they subsidize Greece. Condititional on Greeks asking for subsidies they were getting much softer treatment than what any non-European country in similar circumstances would get from creditors.   B. - I do not Mr. Tsipras has any particular reason to politically exist. Especially under the circumstances. And C. - I tend to despise politicians for whom national pride and independence mean more than the wellbeeing of their citizens.

Well, the argument of Europe subsidizing Greece is a clear strawman. EU taxpayers have been subsidizing other people through Greece. Obviously EU countries are democracies and the large amounts of money invested in bailouts are understandably unpopular. The second reason you give is understandable under your point of view, and funnily enough it's shared by the "negotiators". It's not strange that they seek to destroy Tsipras politically, since their purpose is holding on the asuterity dogma despite all contrary evidence... or should I say that people like Legarde realised that old recipes don't work but would prefer dealing some kind of relief with someone less politically uncomfortable? Finally, I'm not a fan of nationalisms of any kind. However, it's understandable that appeal to national pride given how Greek dignity has been trampled. On the other hand, it would be disingenous to deny a remarkable dose of nationalism and prejudice on the 'other side'. Don't you read German press?

[jaichind]

Tsipras hinted he might resign if the Greek people vote in favor of the creditors' proposal.   So the battle lines are drawn.  Yes means Tsipras resigns and No means Greece exits Euro with the complete meltdown of banking system.

[jaichind]

http://www.bloomberg.com/news/articles/2015-06-29/hedge-funds-wagering-greeks-will-vote-yes-in-sunday-s-referendum

Hedge Funds Are Wagering Greeks Will Vote Yes in Sunday’s Referendum

I am also looking into Greek ETFs.  But with the big market correction today there are a lot of tasty buying opportunities so might not even bother with Greek ETFs.

[BaconBacon96]

Voting No is the only way out. A Yes vote is an endorsement of what we've seen these last five years. The cycle cannot continue indefinitely.

Grexit will be painful but so will never-ending austerity.

[ag]

Where I disagree are three things. A. - I do not believe the other Europeans are to blame. They are also democracies and it is unrealistic to insist they subsidize Greece. Condititional on Greeks asking for subsidies they were getting much softer treatment than what any non-European country in similar circumstances would get from creditors.   B. - I do not Mr. Tsipras has any particular reason to politically exist. Especially under the circumstances. And C. - I tend to despise politicians for whom national pride and independence mean more than the wellbeeing of their citizens.

Well, the argument of Europe subsidizing Greece is a clear strawman. EU taxpayers have been subsidizing other people through Greece. Obviously EU countries are democracies and the large amounts of money invested in bailouts are understandably unpopular. The second reason you give is understandable under your point of view, and funnily enough it's shared by the "negotiators". It's not strange that they seek to destroy Tsipras politically, since their purpose is holding on the asuterity dogma despite all contrary evidence... or should I say that people like Legarde realised that old recipes don't work but would prefer dealing some kind of relief with someone less politically uncomfortable? Finally, I'm not a fan of nationalisms of any kind. However, it's understandable that appeal to national pride given how Greek dignity has been trampled. On the other hand, it would be disingenous to deny a remarkable dose of nationalism and prejudice on the 'other side'. Don't you read German press?

1. I am sorry, but the Greek problem started because Greeks borrowed more than they could repay. Not because the Germans did, not because the French did, not even because Lithuanians or Bulgarians did. Yes, they should not have been permitted to - no doubt of that. But it was their decision to borrow. Right now the discussion is about subsidizing that consumption that Greeks already had - but it does not stop being Greek consumption.

2. Given that Greeks continued to insist that they want to stay in the eurozone, other countries did what they could. If anything, they have been bending backwards for Greeced. Mexico would never get such terms and so much patience. I do not see what would a Greek government have to feel upset about. Greek people - that is another matter. They are being screwed, and I do not blame them for tossing out the previous governments that got them there. Unfortunately, the only one left available was this nincompoop.

3. Yes, of course, Greeks should not have insisted on staying in the eurozone. They would have been a lot better of in the first place.

4. I have been avoiding expressing an opinion on Mr. Tsipras till now. It is his irresponsible behavior of the last few days that made me say things I am saying.

5. When you go asking for money you'd better supress your pride. If you cannot - do not ask for money.

[ag]

Voting No is the only way out. A Yes vote is an endorsement of what we've seen these last five years. The cycle cannot continue indefinitely.

Grexit will be painful but so will never-ending austerity.

Ideally, they would vote yes, change the government and then negotiate a less painful Grexit.

[BaconBacon96]

Voting No is the only way out. A Yes vote is an endorsement of what we've seen these last five years. The cycle cannot continue indefinitely.

Grexit will be painful but so will never-ending austerity.

Ideally, they would vote yes, change the government and then negotiate a less painful Grexit.

Realistically though, would a New Democracy led government actually be willing to go through with Grexit? I'm not sure about that.

[ag]

Voting No is the only way out. A Yes vote is an endorsement of what we've seen these last five years. The cycle cannot continue indefinitely.

Grexit will be painful but so will never-ending austerity.

Ideally, they would vote yes, change the government and then negotiate a less painful Grexit.

Realistically though, would a New Democracy led government actually be willing to go through with Grexit? I'm not sure about that.

They may not have another option at this point. By the time a new government gets elected, drachma will be reality anyway.

[jaichind]

I wonder if there is not going to be an October Surprise.   Something like a joint Tsipras-Putin Saturday press conference with a lot of fancy words of a "package" from Russia to help Greece in their "period of difficulty."  The package will be vague enough that it implies that Russia will finance Greek short term funding needs to stay in the Euro but makes no real commitment to doing so.  The point of this is for push undecided toward voting No thinking that Russia will bail out Greece when it will mostly turn into smoke by Monday after the vote, or at least a much weaker package that will help Greece in its transition out of the Euro but nothing to keep Greece in the Eurozone.

[Velasco]

1. I am sorry, but the Greek problem started because Greeks borrowed more than they could repay. Not because the Germans did, not because the French did, not even because Lithuanians or Bulgarians did. Yes, they should not have been permitted to - no doubt of that. But it was their decision to borrow. Right now the discussion is about subsidizing that consumption that Greeks already had - but it does not stop being Greek consumption.

2. Given that Greeks continued to insist that they want to stay in the eurozone, other countries did what they could. If anything, they have been bending backwards for Greeced. Mexico would never get such terms and so much patience. I do not see what would a Greek government have to feel upset about. Greek people - that is another matter. They are being screwed, and I do not blame them for tossing out the previous governments that got them there. Unfortunately, the only one left available was this nincompoop.

3. Yes, of course, Greeks should not have insisted on staying in the eurozone. They would have been a lot better of in the first place.

4. I have been avoiding expressing an opinion on Mr. Tsipras till now. It is his irresponsible behavior of the last few days that made me say things I am saying.

5. When you go asking for money you'd better supress your pride. If you cannot - do not ask for money.

It's not my intention to prolong this endlessly but, isn't it a bit simplistic the idea of blaming only past Greek governments? Right now, if I want to go to a bank in order to get a credit it's not as easy as taking the decision to borrow. However, some years ago it was different. If I only earned a modest wage, my bank would have encouraged me to get a consumer credit or (even worse) a mortgage loan. Are you familiar with the drama taking place in Spain? Do you approve what is happening with thousands of families trapped in loans impossible to repay? Are you sure that lenders have no responsibility at all?

On the other hand, you can't blame Greeks for insisting to stay in the Eurozone. A majority of the population wanted to stay, and it's understandable because the prospect of being sent to the cold is terrifying. They should not have joined, in the first place (isn't there liability on the part of 'Europe'?) Once a country is inside that terribly disfunctional mechanism called Eurozone, it's impossible to leave without paying a high price.  Also, any Greek leader with a minimum of dignity has every reason to feel upset about the way "institutions" have treated the country,; political affiliation doesn't matter when we are talking about something as fundamental as dignity. What was the point of throwing astronomic amounts of money while, at the same time, "institutions" were pushing the country down with extravagant demands? What was has been the usefulness of the high price paid by the population, due to the implementation of wrong policies based on absurd dogmas and fanaticism? Now, with all the damage done, the solution is as simple as washing hands and getting rid of Greece. Do you think that the problems of the Eurozone will end with that? According to some voices, Grexit might be well the beginning of a period of stagnation and decline in all the Eurozone. Time will tell, but for sure what are doing Europe and the "institutions" is morally repugnant.

Of course, you can have whatever opinion you want about Tsipras. I think others are much worse than him. Also, I have a legitimate concern. Sadly, my country is trapped in the Eurozone and is vulnerable to a potential financial turbulence. Even if European leaders had the intent of fixing the Euro, and there's no reason to think that they have, it would take years building a solid structure.

 

[ag]

People who insist on calling this bullshoot "dignity" should suffer. I have no compassion for them whatsoever.

[ag]

As for your country.... Well, you will observe Greece and figure out, whether you care about dignity or not.

[ag]

Assuming, however, that Greece had no "dignity", I am pretty sure that it would have been able to negotiate a much better deal for its citizens.  And that is what is driving me mad.

[○∙◄☻¥tπ[╪AV┼cVê└]

The EU is definitely not the US. This is what happens in the US. We subsidize Mississippi year after year. The EU doesn't subsidize Greece.  But somehow, I think a lot of Greece bashers are fine with subsidizing Mississippi.

You must be logged in to read this quote.

http://www.vox.com/2015/6/29/8863313/theres-a-simple-solution-to-greeces-problems-but-europe-wont-try-it

[politicus]

The EU is definitely not the US. This is what happens in the US. We subsidize Mississippi year after year. The EU doesn't subsidize Greece.  But somehow, I think a lot of Greece bashers are fine with subsidizing Mississippi.

You must be logged in to read this quote.

http://www.vox.com/2015/6/29/8863313/theres-a-simple-solution-to-greeces-problems-but-europe-wont-try-it

Well, the EU is a confederation (of sorts) of sovereign states and not a federation, so there is no obligation to subsidize failed states.

Ironically Mississippi and Alabama would be bankrupt if the US was a confederacy.

[ag]

The EU is definitely not the US. This is what happens in the US. We subsidize Mississippi year after year. The EU doesn't subsidize Greece.  But somehow, I think a lot of Greece bashers are fine with subsidizing Mississippi.

You must be logged in to read this quote.

http://www.vox.com/2015/6/29/8863313/theres-a-simple-solution-to-greeces-problems-but-europe-wont-try-it

There is a reason for that. EU is not a state. This is the key flaw in the entire design. There is no fiscal federalism. There is no political federalism. The states of Eu are sovereign independent nations. If Greece were not independent, things would have been very different.

If and when the European Parliament adopts the budget that dwarfs those of its member states, and if and when everybody knows who the European President is and what he does - but has doubts about his own "state" governor, then this "simple" solution can work.

[Mehmentum]

The EU is definitely not the US. This is what happens in the US. We subsidize Mississippi year after year. The EU doesn't subsidize Greece.  But somehow, I think a lot of Greece bashers are fine with subsidizing Mississippi.

You must be logged in to read this quote.

http://www.vox.com/2015/6/29/8863313/theres-a-simple-solution-to-greeces-problems-but-europe-wont-try-it

Well, the EU is a confederation (of sorts) of sovereign states and not a federation, so there is no obligation to subsidize failed states.

Ironically Mississippi and Alabama would be bankrupt if the US was a confederacy.

Well, the U.S. tried the confederation route early on in its history. The Article of Confederation ended up failing (though for different reasons than what's plaguing the EU now).  

Its possible that Confederations simply aren't a feasible form of government.

[Antonio the Sixth]

The Articles of Confederation is the perfect metaphor for what the EU is right now. The only problem is, we have no James Madison and Alexander Hamilton to save us from this mess.

[jaichind]

Greece Asks for 2-Year Bailout Program From ESM: PM’s Office

Looks like there is another attempt at a deal