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AP: Greece looks to reopen bailout talks (and general Greece discussion)


zoony

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Just let them hang themselves. In Germany they raised the retirement age from 65 to 67 to close budget gaps. In Greece it's still 58, if I'm not mistaken.

I get that their unemployment figures are now worse the America during the Depression, but they mortgaged their future away. Let them go back to the drachma.

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They invented hubris.

 

For years other countires have been paying their bills because they Greeks refuse to collect their own taxes.

 

An audit on their public transit system found that it would be cheaper for Greece to put everyone in taxi cabs.  Bribery of public officials is so common that it's not even considered bribery.  It's just part of life in Greece.

 

Just let them hang themselves. In Germany they raised the retirement age from 65 to 67 to close budget gaps. In Greece it's still 58, if I'm not mistaken.

I get that their unemployment figures are now worse the America during the Depression, but they mortgaged their future away. Let them go back to the drachma.

 

I will actually be mildly pissed if France and Germany cave.  Just cut the cord... the global economy has been prepping for years.  Let them go.

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So some perceptive on this from Europe (but outside the Euro Zone).

Greece made its own bed to a large extent here. It's has an awful record of tax evasion which continues unabated. Greeks owe over €70 BILLION of unpaid taxes. Estimates are that about €9Bn of that is still recoverable. If you go to Greece expect to be asked to pay cash rather than use a credit or debit card - that way there is no record and the cash goes undeclared so no tax! Even doctors do this. If they just paid their damn back taxes they would not need a bail out!

Add to this they have a bloated public sector, are unproductive when in work (public or private sector) and that corruption is rampant. So they have been living beyond their means for years ...and the bills are now past due.

However the EU and specifically Euro Zone along with the IMF and European Central Bank also deserve criticism. The bail out the Greeks received was more about saving the Euro and German and French banks that had huge exposure to Greek debt than Greece. If Greek had defaulted then the whole of the Euro Zone financial system would have melted down and there would have been contagion throughout Europe with other 'soft' economies like Italy, Spain, Portugal and Ireland following right after Greece.

One uncommented on disgrace in all this is the transfer of Billions of Euros of private debt from banks to European tax payers.

So most of the bailout did not in fact go to Greece but just shifted debt around on a balance sheet from banks to European Governments. Germany is owed the most - over $60Bn.

Now the new Greek Government came to power with slogans of staying in the Euro and also rolling back all the cuts and structural change agreed by the Greeks as conditions of getting Euro Zone funding. It now turns out radical socialists are rather better at shouting slogans at political rallies than running a Country and negotiating with International partners - who knew!

What's likely to happen now depends on what the Germans want mainly. They still call the shots within the Euro Zone. Could go either way but the bet is the Greeks will exit the Euro but with some humanitarian funding to keep their banks open and able to provide access to cash to the Greek people while the Greek Government reintroduce the Drachma. Efforts are being made to keep them in the Euro area though as once one Country leaves others may follow and the whole Euro may come under pressure from the markets and fall apart.

Whatever happens though the Greek people are in for a very rough few years - and they have a shambles of a Government who seem to be making things up as they go. I feel sorry for them, up to a point.

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On the other hand, if you had a few $thousand laying around, this might be brilliant.  

 

http://www.cnbc.com/id/102811409

 

It's gambling - you don't know which way it would go. Take some of the Irish financial stocks post crash. I inherited some stock in Allied Irish Bank from my father's estate ... that I haven't spent the modest legal fees on acquiring. It is currently worth less than one third of a percent of what it was at the peak. And this is for a major financial institution that employs many thousands.

 

fMDMnCL.png

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Martin, speaking of hubris, I think the original framers of the Eurozone were incredibly dumb.  I mean we're talking about a continent that slaughters millions of each other's citizens every 50 years or so.  

 

Just a casual trip through Europe, one is overwhelmed with the amount of nationalism, old scores, and genuine distrust and dislike of neighboring countries.

 

"I know, let's all join together!"   Duh.

 

Let's take Belgium.  The Flemish don't like the French.  They tolerate the Germans.  The French think the Flemish are backwards.  The Germans wish they were part of Germany.  And this is all within the border of Belgium!!

 

Take a cab ride in London and ask the driver what he thinks of the French.  Ask, well, pretty much anyone what they think of the Germans.

 

The more this goes on, the more I cannot wrap my head around who thought the EU could ever work.  Now it has to work, as everyone's economic future depends on it.  Will be interesting/fun to watch unfold


It's gambling - you don't know which way it would go. Take some of the Irish financial stocks post crash. I inherited some stock in Allied Irish Bank from my father's estate ... that I haven't spent the modest legal fees on acquiring:

 

fMDMnCL.png

 

 

Remember when all the Ron Paul zombies used to tell us circa 2006 that Ireland finally "had it right" with regard to Government regulation?

 

That was fun.  Where are those guys nowadays?

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Martin, speaking of hubris, I think the original framers of the Eurozone were incredibly dumb.

Could not agree more.

The European Union is at heart a political project. It's about a drive towards a Federal Europe with political and well as economic union. The Euro was a plank in this and was again a political project dressed up as economics. As you note the politicians are out of step with most of the people within Europe - there is little ground up enthusiasm for further European integration in many Countries, it's not just in the UK you will find Euro sceptics!

It was always a nonsense to think you can have a shared currency without even economic union let alone political union. You have strong economies like Germany coupled with weaker economies like Greece, Spain Italy and Portugal (I would argue Ireland's problems came from different issues). Same interest rates applied Euro area wide and countries did not have the ability to print money and so no control of their fiscal policy. So when times get hard weaker economies are screwed.

There are still a lot of politicians around though who's life work and dream has been a fully integrated and Federal Europe. They will keep fighting for that political vision whatever the economics say.

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Another perspective on this

 

http://www.huffingtonpost.co.uk/2015/07/06/thomas-piketty-germany-austerity-greek-crisis_n_7734178.html

 

Link for rest

 

 
Thomas Piketty Claims Germany Should Be The Last Country To Lecture Greece On Debt

 

The German government is on course to destroy Europe with its attempts to impose austerity across the continent, a leading French economist has claimed.

Thomas Piketty, an academic and capitalism commentator who was named the 'world's most influential thinker', launched a scathing attack on Angela Merkel and European bureaucrats on Monday for blistering hypocrisy over attempts to force Greece to adopt austere repayment plans.

In an interview with German magazine Die Welt, published just hours before Greece's finance minister Yanis Varoufakis announced his resignation, Piketty called for a conference on all Europe's debts, similar to ones held in the aftermath of World War Two.

 
 
 

"When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: 'what a huge joke!' Germany is the country that has never repaid its debts. It has no standing to lecture other nations," he said.

"There is neither a reason for France, nor Germany, and especially not for Europe, to be happy. I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history."

 

 

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There's that famous European solidarity. I suppose most French people are still pissed about the Treaty of Versailles.

Whether he has a point though, is irrelevant. Greece has lost ALL credibility and bargaining position. They are in a position to say "thank you sir" and that's it. Period.

Otherwise, screw 'em. Maybe those brave Greek protestors could kill a few more innocents because they're pissed they can't retire at 50 anymore. Worthless scum.

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From the Greek perspective the sky has fallen and they really have nothing more to lose.

 

A Grexit, while painful short term, helps out Greece and the Euro long term

 

From Vox

 

http://www.vox.com/2015/7/5/8895937/greek-referendum-no-consequences

 

If Greece had its own currency, the Greek central bank would engage in aggressive monetary easing to boost economic growth and bring down its 26 percent unemployment rate. But Greece shares a currency with countries like Germany and Austria that are currently enjoying low unemployment rates. So the European Central Bank hasn't done enough to support the Greek economy.

And this may not be a one-time problem. Economic downturns will happen at different times and with different severity in the various European countries. The euro's one-size-fits-all model will make it impossible to provide each European country with an optimal monetary policy.

 

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Also, 18 posts in, and nobody has started with the rants about how Socialism doesn't work.

Not sure if I'm disappointed or pleased

From the Greek perspective the sky has fallen and they really have nothing more to lose.

A Grexit, while painful short term, helps out Greece and the Euro long term

From Vox

http://www.vox.com/2015/7/5/8895937/greek-referendum-no-consequences

The power to devalue is kind of important. People thought the Swiss and Brits were crazy when everyone went in the Euro. Guess not

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Also, 18 posts in, and nobody has started with the rants about how Socialism doesn't work.

Not sure if I'm disappointed or pleased

The power to devalue is kind of important. People thought the Swiss and Brits were crazy when everyone went in the Euro. Guess not

 

The Swiss are the smartest people on earth 

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The Swiss are the smartest people on earth

Heaven is where the Swiss run the government, the French are the cooks,the Brits are the police, the Germans are the mechanics, and the Italians are the lovers.

Hell is where the Greeks run the government, the Germans are the police, the Brits are the cooks, the French are the mechanics....

and the Swiss are the lovers.

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Thinking about the geopolitical implications of a Greek Exit is also troubling.  One of the biggest checks against further Russian aggrandizement is a Europe that is politically united against them.  If Greece gets politically and diplomatically alienated from the rest of Europe, and other countries start to follow... it would change the geopolitical balance of power in Europe and open up a window for Russia to escape it's diplomatic isolation.

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