The Greek bailout


(Mark Rimmer) #1

I thought the idea is to learn from history!


Nought from the Greeks towards me hath sped well.
So now I find that ancient proverb true,
Foes' gifts are no gifts: profit bring they none.


Sophocles (496 - 406 BC)


(Theo Fruendt) #2

Mark, its all about this:


(Mark Rimmer) #3

Theo,

The Ukraine situation is completely different - it is not even a member of the EU! Although it has received a little support from the EU, the bulk of its loans are from the IMF which does not fall within Dijsselbloed's remit.

What is so corrupt about Saudi Arabia, Kuwait & Bahrain? Sure, the rulers control business to suit themselves but these countries are at least self funding.

The Saudis have been negotiating directly with Germany for the supply of up to 800 Leopard 2 tanks to replace their French & American supplied armour so a few from Greece is not really going to make a difference.


(Theo Fruendt) #4

Mark, sorry but sending billions and billions to an even more corrupt country like Ukraine is probably politically correct? These guys there are pumped with cash and arms and they haven't payed anything ever since, neither to Europe not to mention to Russia... You can't have such double standards!

What I find really difficult is that Greece is now planing to sell a lot of their NATO equipment to other countries because the dates for end-user certificates/contracts have run out for the first lots since April 2015. Isn't it fantastic when then Leo II tanks are ending up in corrupt holes like Saudi-Arabia, Bahrain or Kuwait? The result will only be the production of more refugees, more misery etc.

But the benefits for Greece by selling out over-capacities of its defense equipment enables them to pay back most their debts at once and they will be still liquid to do those reforms they possible can do without harming the society. The nice side-effect will be: no possiblity for installment of another Junta, as it was already envisaged as a so called "security-emergency-government" after Syriza is ousted.

So, the Greeks escape a repetition of another military dictatorship. Ironically, it where the Turks who then liberated the Greeks from their first dictatorship after Greeks Military Fascists lost the war, they where just military cowards who could torture people on remote islands till they died and fed them to the sharks.

So, once the overload of arms are gone Greeks need do their deals with Turkey as usual and because without any industrial infrastructure the only option of what is left is helping with the transit of all those people who want to come to Europe because something went wrong with the 'humanitarian' bombing in this countries and that's why the 'liberated' people there don't want to live in their countries anymore. I know, - yes, they are just naughty and ungrateful to us for our beloved humanitarian bombing... Why should the Greeks bother about refugees who want to go to Europe why should they feed them, and they host more then the UK, Holland and Denmark together (actual UNHCR stats) I think Dijsselbloed need to learn a bit...


(Peter Scawen) #5

Hi

It seems to me that we are now in a position where nobody can win so in my opinion I think it is time to stop the posturing and work towards a pragmatic solution

The Greek Gov't have clearly not helped their cause not least by appearing to be untrustworthy but equally their debt mountain cannot be repaid - their economy is too small and there is little room for import substitution.

So, in my opinion the Greek Gov't gets its deal, more loans, but paid over time and on condition that the reforms are actually being implemented so that the Greek Gov't has to stay committed to the reform package and in turn the "creditors" take a massive cut so that the debt becomes sustainable as the Greek economy grows.

If Greece leaves the Euro zone, 100% of the debts are effectively written off but Greece is reduced to penury, (indeed the EU has I believe contingency plans to provide "aid" to the Greek people) so that is the worst possible solution.

I hold no candle for the various Greek Gov'ts but as a country we support failing nations around the world, now its time we supported a failing nation within our own community.


(Mark Rimmer) #6

The head of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said ahead of the Brussels meeting: "There is a major issue of trust.

"Can the Greek government be trusted to do what they are promising in coming weeks, months and years?"

The Greek Government has already spat in the face of those trying to save them, now with the full support of the population who have voted against any cost cutting measures but feel they can go back to the well for more.

I find it difficult to sympathise with people who have no intention of helping themselves. I wonder what they will do when their welfare, health service & essential services cease to operate?


(anon52461035) #7

Money In = Money Out = happiness (sort of) and Money Out > Money In = unhappiness (at some point)

If my parents wanted something, say a TV in the 50's, they saved for it. HP was anethma to them. As inflation was low then the value of the savings stayed constant as opposed to paying the high HP interest charges. When I wanted a TV in the early seventies it was normally via interest free credit (especially from Hitachi etc. who were determined to ruin the UK TV industry and many other parts of the UK manufacturing industries, something they had a great deal of success with). After that debt became the driving factor in the Advert Driven Consumer Culture with ever higher interest rates and easy credit for people who could not afford it and so it goes.

You do not spend money you have not got, it is as simple as that. Socialist governments in particular just do not seem to get that simple fact. The other major factor that they all seem to forget is that it is not "THEIR MONEY" it is the taxpayers and they are simply custodians of that money and should be obliged to look after it and spend it carefully. Wish-Fool thinking I know, but one lives in hope.


(Theo Fruendt) #8

But the Greeks are not alone in 're-negotiating' rules of the EC... There are some more people jumping around fishing voters with fairytales of 're-negotiating'. So why the hell they have been joining on the first hand?

Of course, its clear, you do not ask for a credit when you do not have any intention to pay it back, - that would be deliberated betrayal...


(Theo Fruendt) #9

I understand you Peter, you know about this animosity of Greeks towards Macedonia and a person sympathetic to Greek cultural views would accuse you to be pro Macedonian. (haha, like there is a difference). And that's the catch: It is expected that no member can be expelled, this is on what the Greek government is counting on... I think that expelling a member state would be totally wrong, - but that's Adornos "Minima Moralia", or less poetically: the simple reality a la Charly Marx: When capital can not generate enough reveneues it will fail (K. Marx, Kapital III, MEW 25, 839.)

What we are being told by this media outlets is that all what is happened with Greece are actually 'natural phenomena' triggered by over consuming Greek people, but media have lost their monopole on reality since Tim Berners-Lee invention.. The very plain reality is that all these banks and multi-national companies with their accounts in tax heavens have been lending irresponsible to Greece's economy, knowing they can rely on their governments bailout insurances if Greece is failing. So there is no solution and better a shock with an end then an everlasting shock...

@ Simon Roxburgh, let them hope to get support from Russia. Madame LePen also got support from Russia in form of a 40 million credit. The Cypriots (also EU) haven't received help and Russia just let it happen to have Cypriots being looted by sharks. Same Russia will do when it comes to the final stages with Greece. The tragic is we are picking up the bill via our taxes and at one point this can really be bad for the economies here. TF2 recently published a statistic that it will be € 600 per French citizen, and this is certainly a 'gentle' statistic...


(Theo Fruendt) #10

... and here are the next who want to hang on life support by the EC: Goldman Sees Ukraine Default in July as Debt Standoff Holds .

Greece was useful as a NATO member to contain the another NATO member, Turkey, as it was necessary to station there the missiles during Cold War. Its true, in the end taxes are squeezed out of everybody, even the homeless when they pay VAT on their beer...


(Mark Rimmer) #11

The tax payer pays for everything anyway - where else does the money come from?


(Peter Scawen) #12

Yes John you say "What makes the difference in Ireland is growth, none of which is down to our Goverment. It's FDI and the Multinationals that's made the difference."

It doesn't matter how you get out of the hole, just so long as it works for Ireland. Clearly the Irish Gov't has set up tax schemes to make FDI attractive. Surely that is good news.

I am sure the Greeks would be delighted if they were "rescued" by FDI.


(John Scully) #13

Still on the ferry so connection is poor. I’ll watch the video later on dry land:-)


(John Scully) #14

The Irish issue for me Peter is that the Goverment has wasted a good crisis, as thay say. I could even swallow the bank debt outrage if the opportunity to reform the Public Sector had been grasped. Our politicians and civil servants are amongst the best paid and best pensioned in the EU. Our public services, apart from tax collection, surprise, surprise, are amongst the worst. I suppose the point I was making is that while Ireland is seen as the best boy in the naughty class (other pupils being Portugal, Spain and Italy) in reality we are not much different in the reform stakes than Greece ehi are being beaten up. What makes the difference in Ireland is growth, none of which is down to our Goverment. It’s FDI and the Multinationals that’s made the difference.


(Peter Scawen) #15

John S: I agree entirely that the ONLY way out is to increase austerity.

But once the Greek gov't signs up to a root and branch reform of the way it works, see video for some pointers, then the necessary changes will take place, will come into effect over time against which money can be borrowed as there will be a way to repay the debts.

But, so far it appears the "troika" do not view the proposals by the Greekl Gov't really address the central issues:

Productivity per hour is very poor

Too many people employed by the state

Retirement is too early

Pensions are too high

Tax system in crap

VAT system too complex

I agree that none of this is open to a quick fix, this is a multi - generational issue but you have to start somewhere.

Peter


(John Scully) #16

I agree with your list of actions the Greeks need to undertake but the situation is rather like the American tourist that stopped his car and asked directions from a Kerry farmer. The farmer told him “I wouldn’t start from here”. For the Greeks to be able to execute the plan you outline they need an economy that is growing and more austerity isn’t going to delever that.


(Peter Scawen) #17

I found this short video of interest

http://www.bbc.com/news/world-europe-33336195

Peter


(Peter Scawen) #18

John

You are obviously more knowledgeable about Ireland than I am, but the fact remains that an elected Gov't chose a path to deal with its indebtedness, reasonable, fair we can debate but the fact remains that the Irish Gov't acted to address the problem and the Greek Gov't has not.

It is all too easy to blame the bankers, but so far as the UK is concerned, we all enjoyed the increase in house prices, low interest rates (so we could borrow up to the hilt) but then the bill came due and we couldn't pay back our debts - hence the fiscal crisis.

We collectively have to own up to our self indulgence, not complain and learn the lesson.

Right now the £/Euro rate is great for us, but I hope nobody is silly enough to plan their finances and expenditure that it will stay at this level for ever. It will, I think, get better (for us) over the short medium term but then revert down again. Same issue in another guise.

And before you think I am being a pompous ass, yes, I have made these mistakes in the past and will do my best not to repeat that error.


(John Scully) #19

I agree with you entirely Mar, on a personal level. I am a man of my word as well but the German and French (and indeed US) bankers are not, nor indeed are any of the politicians I’ve come across. I think the Greeks are fighting fire with fire whereas the Irish Government just rolled over and dumped 64 billion of private debt on the Irish tax payer.


(Peter Bird) #20

Interesting thoughts Peter, thank you.

From what I gather the 'rich Greek' will be hit yet again with more taxation. It doesn't seem logical to me that any government would wish to make the rich poorer in order to make the poor a little 'richer' unless you are a desperate left wing govt with only short-term policies.