So if Greece goes bust and or the €uro breaks up, what happens?
Should we move our savings accounts (if any) to - well where? Germany (only they won't let us), UK, where what?
So if Greece goes bust and or the €uro breaks up, what happens?
Should we move our savings accounts (if any) to - well where? Germany (only they won't let us), UK, where what?
Bob I think its all not over yet. Here is something nice to watch in the sun on you ipad: Lapavitsas Calls for Exit as the Only Strategy for Greek People
We should let ourselves all be surprised. Ultimately the USA wants a strong, stable Euro for when the TTIP is finally signed and Europe becomes the playground in multinational corporations. If Greece are willing to be good children and do what nanny says then they can stay to play but if they continue to be naughty papa will send them away. Whichever one the Euro benefits from will decide whether the Hutchins Center on Fiscal and Monetary Policy at Brookings University has interpreted Treasury Secretary Jack Lew's words that are being cited by finance journals in the USA, so that the US Department of the Treasury can read Wall Street opinion the 'advise' European puppets colleagues. All good clean stuff - for a hippopotamus down at the local slurry pit.
Hello Theo and Brian. Yes, I am the one who needs to calm down, but I agree that it is already a done deal (and has been for some months). Certain people in Northern Europe as you so quaintly put it have already decided that Greece is a dead duck and it doesn't matter a damn what Tsipras comes up with - nothing fits their plan except a Grexit. The election of Syriza sent shock waves through Europe, and was on no account something to be tolerated. by definition, Syriza doesn't fit the mould and needs to be discredited. (that's the 'Establishment' view, not mine!).
BTW you mention the ship owners. That business about not paying tax was law long before I came to live in Greece (18 years ago). I have said before, and say again:
Throughout the free world, people vote for the party that offers what they see as the best deal for them, the public. That 'bribery' on the part of the politicians is rarely thought through by the Greek public (who let's face it, outside of Athens, Thessaloniki and Melbourne are mainly simple peasants whose main concern is feeding the chickens, goats and sheep). The same happens in the UK where people are swayed by hysteria generated by the media at the behest of the politicians.
We are all ruled by people who have their own vested interests that they want to protect at all costs. As for Greece - we are about to be stuffed. God alone knows what will happen after midnight on Sunday, but I think it is going to be very messy. Spare us a thought! Bob.
Brilliant analysis Theo, especially the closing words!
Bob, did you know that the guys in Brussels, this "super democrats" have had invited the „Nea Dimokratia“ und "PASOK" to negotiate how to proceed in case of a "yes". And who knows here about the obstructive habits of directors of tax-offices who refused to process demands by this rather naive new government to impose taxes? Or e.g. Greek law says Shipowners shall not pay taxes in Greece; so any no stupid yacht owner pays taxes for them? But most important for me is your last sentences, - to calm down. I have the suspicion some in the North of Europe want that the whole issue slips into free fall to end up as complete crap...
With you there, but it was the same people, Draghi and so on, talking about the issues put on the table by Tsipras and Varoufakis that were supposedly there to negotiate a deal. Although an exception should absolutely have been made, I think they all did the politicians' usual thing and got to everything but the real point. All along they have said what they have done, not what they have not, over the last five months but seem to have avoided talking about the preceding governments' inactions on certain points that were agreed and actually mainly make sense. Also, despite starting to block the tax avoidance of the wealthiest they have done nothing to set about demanding 'back taxes' from the large amounts of month outside of their country.
It will move quickly now Bob. Reading the FT, Wall St Journal and a couple of others the economists their journalists are talking to are split down the middle either way, but what they have in common is that this needs to be resolved by Monday so that a 'normal' week can begin and markets given a chance to recover.
I'm sure you are right, but the crucial bit - "because of the negotiations those matters have not been presented for immediate business" are the words which are going to condemn Greece to the scrap heap within the next 72 hours. Words. Mrs Merkel famously said more than once in recent days 'where there is a will, there is a way'. Fat chance as long as words are used as an excuse. Rules can ALWAYS be either ignored or changed. Not in this instance, it seems. Sorry, don't mean to rant, but you can probably imagine what it is like living here in Greece just now and we all get a bit tense. Promise to calm down soon! Bob.
Sorry Bob, what it means is that they have done too little to make any impression whilst acknowledging that 20 weeks in office is nothing.
The problem with what you call technocrats is that the predecessors of the present Greek administration signed up to certain conditions for loans they had over seven years, some of which were offered by Greece and accepted by the ECB. They cannot be reversed by a single person, so have to go to the Governing Council then be approved by the Executive Board but because of the negotiations those matters have not been presented for immediate business. Greece has signed away any means of taking unilateral action several years ago and would make it all the more complicated by setting a precedent for other countries to follow.
It is what is most commonly known as a 'dog's breakfast'.
Done far too little? How much do you think they could achieve in 5 months, especially being occupied most of the time with the technocrats in Brussels? And what about the reforms they have tried to introduce to pensions etc only to be told by the same technocrats that they (the Greeks) are forbidden to take what the idiots in Brussels referred to as 'unilateral action' until a proper full deal was signed?
Ooof, you too! We have just seen what has happened to a report we wrote on child refugees in the countries around Syria. UNICEF, Save the Children with support from ILO and UNHCR have 'edited' it. They have taken out everything, literally everything, about the children's rights. We are supposed to be going to Athens later this year because the international agencies are becoming too afraid to go to Amman for this meeting. It will be interesting to see Greece on the street - I shall have time for that.
Tsipras stuck to some of his promises, not all by far, but chose the ones that made news and has done nothing in such areas as increasing benefits for children in impoverished families who cannot afford school materials that were meant to be provided by schools that no longer have funding... Also for school meals that were free for people below a certain income level that has been 'suspended' some time ago. The minority with ridiculous pensions starting 'young' is getting attention whereas many Greeks receive little or no pension at all although they have paid social security and pension contributions and many rural people still work until their last day. Scratch the gloss of the Syriza picture and they have done far too little.
Brian, you are too tolerant ;-) Of course its a dirty game all around. What drives me a bit mad is the attitude how this left-wing Syriza party-guys are getting bashed by people in Media and politics, who even don't know themselves how a castrate administration or state auditors are working, but demanding exactly this from this new government to get such institutions working in 6 month. Alexis Tsipras did the only thing he could do and to stick to his election promise, - he offered a referendum in order not to look like swindler.
Remember all this wise chatter arm-chair journalists predicting he can't keep his promises anyway..., and now after he did, the same wise dumbo's with bold heads and vacuum between their ears are hauling again the very same nonsense. The only good thing with these guys is that they even can not be effected by headache due to their vacuum... I personally have no illusion that the EC bureaucracy is just mad about Tsipras because he sticked to his promises. So, this is why I hope for the people in Greece there will be a cut and a fair start. I will be in September back in Greece to cover the situation for and of refugees from the "wider middle-east" who are being hosted by Greece. Then, after UNHCR comes out with a report, we will see if some crocks are still considering to establish again a kind of Junta to appease the people of this country. This then would be really the nail for the coffin for the EC...
Bob, simple its working like this: export credit guarantees are offered by the Federal German government (Central government) to exporters to hedge shipment risk cover during fabrication phase and export coverages during the call phase. To make matters worse there are also credit guarantees for banks who are passing loans to foreign buyers of German products to boost German exports. Ironically much of them are not even manufactured in Germany, or at least EC but in Far-East so only sold solely for profit. Central government is obliged to evaluate both the economic and political risks. So, and now this is why the mess in Greece is not just the fault of the corrupted Greeks governments responsible before 2010 it is because the distinction between export guarantees and credit guarantees is not carried out according to the legal bases of both warranty forms, but in terms of the formal status of the respective importer. This means so to speak, they can first sell and if they don't get their cash, the taxpayer pays.
For more info please do have a look at the Foreign Trade and Investment Promotion Scheme on http://www.agaportal.de/en/index.html. This is only one example of how foreign trade and investment promotion when backed by the government can back-fire till it is ending up on your ever more increasing bills for your taxes. Sure you don't feel it too much when you bill is increasing just on +/- 300 p.a. but with 20 million taxpayers it is a considerable sum to bail out those who are having wages in their millions. The other credit guys of KFW https://www.kfw.de/International-financing/ almost drove full speed on a wall in 2008 and have had to be bailed out with billions...
Sure, Germany has done what you say. However, Europe is no whiter than white continent. Italy, Spain, Portugal and Greece have all had dictatorships, coups, civil wars, military regimes, people missing, detained, executed, tortured and 'eliminated' for being different. Then we can look at the former Soviet and Yugoslavian republics and all of the 'independent' nations under Soviet domination with endless lists of what was done. No country is exempt, not one is 'clean'.
The fact of the matter is that ordinary people, in Greece now but in turn other countries past, present and future are the 'cannon fodder' of the powerful and rich. The powerful, the politicians that is, tend only to exist because those with real power which is in banking, industry and trade put and keep them there. People are the puppets of the political class. Tsipras and Syriza have just used the Greek population to play out another apparently democratic action by the people. Oh yes! Their banks are still closed and money limited today, shops are still running out of goods and all of the things people are being told will end. We have heard that before, haven't we? The people who make the sacrifices believing tomorrow belongs to them are deceived and soon stand in the soup queues because there is no other food available.
This is a dirty game all round. The Greek people are not as such part of what has happened. The money the ECB and IMF has injected into Greece for seven years has been misused, now some politicians who have promised to change that and give the Greeks a better life are trying to do so by not repaying debts. Surely, for them to survive in or out of the Euro they will need revenues, so the people they can tax will be taxed, those who have avoided so long that some of them theoretically individually owe enough to keep a small town and its population solvent for a year! Blaming the rest of Europe for funding the disaster they are walking into is one-sided. There are always two sides and in this case both need to be looked at. Public funding from tax payers via any source, investors via private banks and any other source of funding are being written off to keep Greece going. There has already been a considerable amount written off. However, successive governments have failed to do what was made conditional for receiving funding. Syriza has made some steps in the right direction but made others that are simply mendacious. The whole notion of an amnesty of a kind for those who have avoided taxes is farcical. They know that sooner or later a new government will be in office, possibly one that will allow business as usual because those people 'amnestied' are the ones who run politics by holding its purse strings. That is also spiting the faces of the people of other countries who have been affected economically by their public money that may now never and none of be repaid.
Do the people in real power care? Some of them in Germany today are still standing on the foundations of great wealth the two wars earned them, Greece is not even seeing that dirty money in its own country. No number of wrongs ever make a right.
Hmm. This BBC graphic seems to show a lot of debt funded by the German state in terms of EU bailout loans (as opposed to private debt):
Per head of population though, a number of other smaller European states not in this graphic actually have a much higher debt risk from Greece, and they aren't likely to accept any debt reduction.
I think part of the problem about the debt reduction thing is though, if the Greek government had made the necessary changes to sort out the basic fiscal responsibility about collecting taxes properly and yes cuts also some five years ago as they were required to do, then the debt wouldn't be anywhere near the level it is today and they'd be in much better shape.
Unfortunately the previous Greek government chose to ignore all that, keep the status quo and dig the hole deeper, while pandering to various large Greek financial interests (eg: the media companies that pay no tax on their TV advertising revenue!) So they put their own populace in the proverbial.
To proceed further it's entirely understandable and normal that the other EU member states want to see an indication that proper fiscal responsibility will arrive or yes, it is throwing good money after bad.
I don't know if you read the pdf that the EU commission published when the talks fell apart of what the actual proposition was on the table? ( http://europa.eu/rapid/press-release_IP-15-5270_en.htm ). It's 10 pages long, and while much is of course made in the media about stuff like the pension cuts being asked for, that is actually one page. Most of the 10 pages were concerned with stamping out corruption, ensuring accurate collection of taxes, reducing the possibility for undeclared work, reforms in accountability of the public sector, ensuring things like the media pay tax on their revenue (and putting media contracts out to public tender). Basic fiscal responsibility stuff and all of it fairly reasonable, and actually mostly should serve the Greek populace better in the long run. They Greek government have to at least be prepared to do those kind of things.
The comparison to the written off German debt is something of a difficult one too for this reason. In the case of the German debt they were at least seen to be engaged in some fiscal responsibility but the amount was too large. At the moment based on the last few years it's difficult to see that the Greek government has yet shown the necessary level of engagement, so why would you cut them some slack unless they're prepared to get their house in order? They'll just create the debt again. :)
And yes, it's awful for the Greek people, and yes they've been shafted at the hands of big business and politicians, but I fear mostly their own big business and politicians under their former government... They have to be seen to fixing that too.
The other strand Theo is that we keep hearing a lot about the German tax payer being fed up with bailing out Greece. The last I heard, it hasn't yet cost the German tax payer anything. The German funding has come from privately owned (as opposed to state-owned) Banks. I may be wrong, and willing to be corrected, but if it is true, then why are the German people being actively wound up by their politicians and news media to believe something that is not right. Simple answer. Doesn't matter what Tsipras comes up with, the eurozone want Greece out of it and by piling the pressure on and refusing to negotiate debt relief they are simply in a face-saving exercise so that when Greece is forced out of the zone, the politicians can stand on the sidelines and wring their hands in sorrow. Meanwhile, the grey suits who only understand spread sheets and balance sheets will be looking hard at the next lot of weak members and working out how to get them to leave too. Basta indeed! Bob.
Brian, I just try to argue from this view: Germany has brought in the past century so much misery all over Europe. Sure the comparence with the dept relief for Germany at the London Conference is 'limping' historically, nevertheless, just because the 1. & 2.WW, the KZ's etc is so long ago, does not make them undone and releases Germany from its responsibility to solidarity. Rather the opposite if a Germany Government want to demonstrate that the mindset has chanced in Germany...
I simply do not like this bullying of South-European EC member states. This is arrogant, something I'm ashamed off being German myself and now living in France. That the Dutch and Finns are hiding behind Merkel does not matter after at all. Their motives are not solidarity but selfishness.
The general question to answer is: Is there solidarity with the people or not! If not, shut this entire bureaucracy in Brussels down. Basta. If there is solidarity with the people in Greece there can only one way: writing the debts off.
Unfortunately it seem to me there is only solidarity with very corrupt Greek politicians and administrators in institutions because they where the ones who received huge bribes to decide on many of those deals which brought Greece into this mess it is.
That the mainstream pundits in media never mention this fact is showing to me only that they are nothing else that they are not impartial. Simply cross-eyed babble bags for nomenklatura of the "financial mafia" which does any business without any responsibility looking only for profit. To cover up their biased doctrine is shown with their rather laughable "critic" on the elected Tzipras gang. Ironically everyone knows this Tzipras gang is not responsible for the mess.
The fact that especially German defence industry (also SISU, Finnland) got bailed out (there are a lot of thousands of secret deal behind closed doors, dating back since Greece became a member of EC and which can be read & searched here by everyone...)
Yes, one of those unbeatable good questions.
Your last sentence Brian. Who doesn't?
Thank you Bob for being so clear, Draghi will know exactly all of this, he was working for G&S at the time Greece became EC Member with the help of G&S. As Varoufakis spoke about "financial terrorists" he did it to save the Euro. Now, I'm convinced the Euro will soon have the same fate as the Latin Monetary Union.(https://en.wikipedia.org/wiki/Latin_Monetary_Union)
How comes that "Thyssen Marine", "Hoch-Tief" and "Siemens" got out a few month before the obvious 2010? This whole thing is terror for the Greek people (even if they are not innocent either just a abused NATO member as well.