Greek Referendum on IMF/Troika deal

[ingemann]

It would have been so much better if all this were accompanied by a European program designed to somewhat soften the impact of what is coming up on the population. This is what they should have been discussing all this time. And none of it seems likely now.

I was idly wondering the other day whether maybe it would have made sense to propose some form of aid to social services alongside any demanded structural economic reforms of whatever. Bit late now I guess.

The problem was that in the early crisis Greece wasn't the only country going through tough structural reforms, and I'm not talking about just southern Europe, half of eastern Europe was hard hit, in fact the Baltic countries was harder hit in the early crisis. Not that you hear a lot about it, because they made their structural reforms, even through it was hard. Of course while they was harder hit than Greece in the early crisis, they didn't need to reform as much, because they had made many of the reforms earlier.

So if this crisis had only had hit Greece we could have seen that kind of aid, but because half of Europe was hit, there was really not enough money to aid to everybody, and the Greek behaviour didn't place them high on the list as aid recipients.

[ingemann]

At the Greek Parliament debate Samaras makes a point that I am also confused about as well.  It seems yesterday the two sides were actually getting close to a deal.   The EU asked for a primary surplus of 1% of GDP this year and 2% 2016, compared with 3% and 4.5% in the original bailout plan. Greece agreed.  If so the rest is mostly details on how to get to this primary surplus.  So why did Tsipras throw this last minute bomb?  Only thing I can thing of is his own party would agree to this and that Tsipras will be destroyed if he tries to bring this deal up for a vote.

The only sane explanation are that the Greek government are playing a game of chicken.

[ingemann]

It's a sad indictment of the competence of European politicians (within and outside of Greece) that THIS fcking mess is what we ended up with.

An orderly Grexit 4 years ago would have been infinitely better.

Yes for Greece, but the primary goal have never been to save the Greeks, that at best was a secondary goal. The primary goal was not to pull Portugal, Spain, Italy and France down if Greece ended up going bankrupt. Whether the Greeks succeed in pulling themselves up the same time was up to the Greeks. By now it look unlikely that a Greek bankrupcy will have much bigger effect outside Greece than a few bad days for stock exchanges. So the primary goal seem to have succeed. The Greek got a opportunity and they didn't take it, that's sad, but now it's them who are going to pay most of the price.

[ingemann]

It would be easier to not attack a strawman, if the "anti-austeritists" told us what their alternatives are. It's hard to have a debat with people who have decided their opposition is evil and you don't know what they're thinking as a alternative. What can Greece do instead of austerity, if they also want to stay in the Euro? If the other side doesn't have a coherent alternative, they choose to be strawmen.

[ingemann]

In phone conversation, Hollande & Merkel agree that result must be respected - AFP.

It's interesting whether they agreed on what the referendrum meant and how it should be respected.

[ingemann]

Maybe the Greeks were trying to find out what would fly first today. Anyway, when the Greeks do put a plan on the table, then what happens? Do the Euros then put some other plan on the table? Is making the Greeks put up something first for cosmetic purposes? Or is the idea that they are being told you need to put up a plan with this or that content, and if you don't we will just say no, because the only plan that will fly is one that you propose yourself, so this chat about bullying you, is put to an end?  None of this makes much sense to me. Maybe part of the answer is that the Euros themselves can't agree on anything, and thus need something concrete to talk about first. But there seems to be quite a bit of agreement (France and Italy perhaps being the exceptions) on one thing:

EU ask Greece to put out a plan for several purposes.

1: EU expect the member countries to know best what kind of reforms they can make.
2: EU also get to see whether the Greeks are serious this time (yeah right)
3: The rest of EU limit the amount of time and resources they're going to waste on the Greeks, if they're not serious. If they come with a complete unrealistic suggestion, they can be send home again.

[ingemann]

So the Greeks reject an austerity plan of circa 9 billion euros in a referendum, and now a few days after the referendum they may have to swallow an austerity plan of 13 billion euros? Are the Syriza people going to admit that the referendum was a mistake?

This are a article just before the election.
http://www.marketoracle.co.uk/Article51304.html

It have a interesting analyse of the Greek government motivation behind how it have acted.

But more interesting, it also give some insight into why the Greek government seem to have completely surrendered:

Any fears of the markets reacting in more than a marginal way to a Grexit are gone. The Greeks strongest card have shown itself to be worthless, and now they can only beg for mercy.

[ingemann]

I will suggest a compromise France give up their part of the Greek debt, France can also send more money to Greece on Greek terms, these can be used to buy out less forgiving creditors, this will France the position needed to decide how much Greece need to reform.

[ingemann]

Well, I understand Germans, they want Nazis in power in Greece, at last, people will stop singling them out for Hitler.

Same for their collaborationist Danish friends.

We have as much influence on this as you do, of course we do stand to lose money on a Grexit, as we bought Greek bonds in our great solidarity with the Greeks and EZ. Which are why I support a French takeover of the Greek debt, which would make everyone happy. Greece get rid of its debt, Germany don't need to pay again to Greece, France can put its money where it mouth is and we doesn't lose money on a Greek collapse. Everyone are happy, including the bankers who now can see how France will cover every future Greek loans.

[ingemann]

And there you go, Germans officially dropped the mask. They never wanted to find a mutually acceptable compromise to keep Greece in the Eurozone. All they wanted is an excuse to kick it out. Whatever Tsipras could have done, it wouldn't have changed their position.

Some countries never learn the lessons from their own history.

Germans or the Finns?

The Finns, Slovaks and all those other self-righteous pricks are part of the chorus, but it's Germany that leads it. Without Germany leading the way, those countries wouldn't amount to anything.

GDP per capita

Greece 21,653
Slovakia 18,454

Yes "self-righteous pricks".

[ingemann]

Hollande said: "If the No will win the referendum, then we'll enter into a unknown dimension".
Tsipras and the Greeks wanted it. And now they will pay the consequences.
Tsipras could easily have accepted the june deal without the referendum. Now, if there will be a deal, it will be harder than the june deal.
The Greeks believed at the Tsipras's lies. This is the consequence.

To some degree I agree, but what really destroyed the Greek negotiation position was the little reaction from the markets. If they (the markets) had reacted with panic, the Greek position today would have been much stronger. The whole yes or no result was secondary.

[ingemann]

So, did Tsipras call the Referendum only to act like he's open to austerity because he knows that Germany will turn anything down, and that this way he gets a Grexit while making it seem like Merkel is the bad guy (girl) and that he tried to prevent a Grexit? This whole thing looks like a clusterfyck and a case of regional schizophrenia.

I linked to a article in the post below, which I think give a rather good explanation to why Tsipras called the referendum. The Greeks expected market panic, they thought the Greece was more important to the markets than it was. Tsipras also warned EZ in the week before he called the referendum, that a Greek crash would start a domino effect with Portugal, Spain and Italy falling. So I think he called the referendum, because he thought it meant that EZ would give into his demands, when they say the consequences. When he saw that the markets barely reacted, he panicked before the referendum and offered a deal. He behave as a man who have seen his last gamble hasn't paid off, and now he's offfering the bookmaker his first born, so that he doesn't end up with a pair of cement shoes.

So the Greeks reject an austerity plan of circa 9 billion euros in a referendum, and now a few days after the referendum they may have to swallow an austerity plan of 13 billion euros? Are the Syriza people going to admit that the referendum was a mistake?

This are a article just before the election.
http://www.marketoracle.co.uk/Article51304.html

It have a interesting analyse of the Greek government motivation behind how it have acted.

But more interesting, it also give some insight into why the Greek government seem to have completely surrendered:

Any fears of the markets reacting in more than a marginal way to a Grexit are gone. The Greeks strongest card have shown itself to be worthless, and now they can only beg for mercy.

[ingemann]

Does nobody see a contrast?




I've been very disappointed with krugman recently, he doesn't understand there is a difference between borrowing for investments that grow the economy and pays back the debt by increasing future growth(AKA: WW2 era american spending). And pointless spending for clientism and votes(AKA Greece)

Krugman has created a terrible monster, a whole political spectrum that wants to spend just for the sake of spending.

Yet doesn't realize the country that overspent did worse than the one that didn't.

There's nothing tto blame Krugman for, he hates Germany, it's nothing new and he have always made the anti-German arguments (here's a lovely oldie from 1999 http://web.mit.edu/krugman/www/kompete.html, which are completely opposite to his arguments today), no matter how little sense they make. If you find anything useful in his ideas, you simply ignore any arguments he makes in discussions which can be connected to Germany.

[ingemann]

There's so much stupidity in this thread, that any debate would be superfluous.

I just hope that, if one of you preachers of good financial virtues ever find yourselves in debt, your creditors will show a bit more common sense that you do.

First of all debt are not something you find yourself in, it's something you choose. It may sometimes be the least ugly choice, but it's always a choice.

Second if I behaved as the Greek state have done, I would be lucky to not end up in prison or in cement shoes depending on who I borrowed the money from.