Slashdot Mirror
Greece Rejects EU Terms
New submitter Thammuz writes: With almost all ballots counted, Greeks voted overwhelmingly "No" on Sunday in a bailout referendum, defying warnings from the EU that rejecting new austerity terms would set their country on a path out of the euro. Figures published by the interior ministry showed nearly 62% of those whose ballots had been counted voting "No", against 38% voting "Yes". "Today we celebrate the victory of democracy, but tomorrow all together we continue and complete a national effort for exiting this crisis," Greek Prime Minister Alexis Tsipras said in a televised address.
One size doesn't fit all, so it should come as no surprise that a currency made for industrial nations doesn't work so well for a tourist economy.
Umm... that wasn't what this referendum was about. The Greeks will never accept an exit from the Euro. Even though they thoroughly deserve to be booted out.
Translation: My government and my country's banks exhibited an utter lack of fiduciary responsibility. Please help me continue to deny their responsibility.
Finally you can stop robbing the eurozone with "loans" that you never planned to repay. (And let's stop this "The loans are impossible to repay" nonsense - Greece's loans are less than the total value of its state assets. Now obviously nobody in Greece wants to sell off their assets - just to pick one category, a military without any hardware isn't much of a military. But the concept that Greece can't pay back its loans is a lie.)
Now, Greece "can't" without selling off extensive assets that nobody would realistically expect them to ever consent to selling... but the only reason for that is because Greece's worker productivity is so terrible and tax collection so pathetically low. Mind you, it's not the fault of Greek workers that productivity levels are low - you work more hours per week than most of Europe (including Germany). But you make a lot less with those hours. You have a highly inefficient economy, and the extensive tax fraud just makes it worse - businesses have disincentive to grow (and thus gain better economies of scale) because it makes it harder to avoid paying taxes. And your military is a financial black hole. Even if everyone just wrote off 100% your debt tomorrow, if you kept trying to live like the rest of Europe (let alone better, like you try to do in a number of respects), you'd be back in the hole in short order.
Anyway, enjoy having your money (both in the banks, and your salaries) devalued to a small fraction of its former value while the cost of all of your imports shoots up, without a corresponding export boost because you hardly export anything compared to the size of your economy - also, a non-Eurozone economy in chaos isn't exactly a good recipe for a healthy European tourism sector, so don't expect the tourism boost from a devalued currency that you may be envisioning. Just don't think that people are sad to see you go - they're just mad for having dumped so much money into your economy when it was obvious that you planned to weasel your way out of ever paying it back.
(Note: the Troika isn't faultless either. In exchange for loans, rather than focusing on trying to improve the raw numbers with austerity, they should have been focused 100% on trying to force you to fix your structural problems so you can be competitive enough to stay in Europe. They tried to tackle the root problem in a totally counterproductive way and ended up earning a lot of hate for that.
The human body can be drained of blood in 8.6 seconds given adequate vacuuming systems.
Oh cry me a river. Our country was completely ravaged in both those wars (ever heard of the fields of Flanders or the battle of the Bulge?) and we're not crying about war reparations. Why? Because it is over. I was not alive then, you were not alive then, probably your parents weren't even alive then. World War II's impact on your economy is astonishingly small compared to all that has happened since.
You have countries in Eastern Europe with lower standards of living than you loaning you money out of solidarity. That you refuse to pay us back, and try to wave your moral obligations away by trying to appropriate the suffering of people long dead is disgusting.
just to pick one category, a military without any hardware isn't much of a military. But the concept that Greece can't pay back its loans is a lie.)
Greece can't pay back its loans and basically remain Greece. You never give an order which you know will not be followed. And you should know ahead of time whether your orders will or will not be followed.
(Note: the Troika isn't faultless either. In exchange for loans, rather than focusing on trying to improve the raw numbers with austerity, they should have been focused 100% on trying to force you to fix your structural problems so you can be competitive enough to stay in Europe. They tried to tackle the root problem in a totally counterproductive way and ended up earning a lot of hate for that.
Notably, austerity tends to shut down the economy, which will only lead to further financial insolvency.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Democracy is not a failure, don't be silly. There are lots of democratic countries that have managed to get a grip on public spending. Most obviously, Germany. Less obviously, the UK just went through an election where the party promising more austerity won a clear victory. California went through a massive crisis where they took their state to the brink due to referendums allowing the creation of unfunded mandates, but last I heard they had learned their lesson and got that problem under control. And so on, and so on.
What's more, it's not like dictatorships are all paragons of budgetary discipline. Far from it.
So whilst undoubtably there will be many further spending crises in advanced nations, democracy is not the problem - it just means a society has to learn to control their borrowing impulses as a group.
"Drop the hammer on them."
That's the easy part. The hard part is dealing with what happens after the hammer has been dropped.
Someone once said that the definition of a bad policy is one that leads to a place where you have nothing but bad options. I believe everyone (not just the Greeks) thought back in 2000 it woudl be good policy to bring Greece into the Eurozone. But now we've now reached the point where otherwise rational people are talking about "dropping the hammer", as if having an incipient failed state in Europe is a small price to pay for 600 euro in your pocket. The frustration is understandable, but the the satisfaction of dropping the hammer on Greece would be short-lived -- possibly on the order of weeks depending on the scale of financial disruption.
The unhappy truth is that bad policy choices fifteen years ago means all the options available today lead to long-lived, complicated, and expensive consequences.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
It doesn't help that Greece was forced into an austerity plan in their last bailout. Essentially that kicked off a death spiral. Austerity has already been well discredited (see here, here, and here. Original paper here) yet it keeps being foisted off on citizens everywhere.
I'm not suggesting that Greece should spend money like a drunken sailor on leave, but following a faith based economic theory even after it has been disproven (even to the satisfaction of the writers of the original paper) is not the answer.
Dude, you just don't get it do you? You don't get to appropriate the glory or suffering of your (supposed, claimed) ancestors and assign blame to the (supposed) descendants of another group of people that wronged your (supposed, claimed) ancestors. That world view has a name: nationalism. It is completely and utterly discredited (largely by the Nazis in the second war) as an effective paradigm within which to govern the world. It is furthermore pretty well discredited by anthropologists, historians and geneticists.
If you insist on taking a nationalistic world view that prizes historic myths over reality, please feel free to pay the Anatolians eleventy gazillion gold coins in reparations for the sack of Troy. Since there are a bunch of Turks living in Germany today, you can send their share directly to the German government. I am sure that in the name of bureaucratic efficiency, the Germans would be happy to accept payment in the form of you never talking about the WW2 thing again. Meanwhile I am Belgian and don't really care about your beef with the Germans.
Now, we are back where we began. I am Belgian and I loaned you money out of solidarity. You are not going to pay it back even though you could if you chose to. That is disgusting and I hope my government does everything it can to make a pariah out of you.
If you lie to get a mortgage [join the Euro-zone], it's your own fault when things go wrong. What if the bank knows that you are lying? It was common knowledge that the figures Greece used to justify joining the Euro-zone were not realistic. Those bureaucrats must have known. Who is at fault now?
The real problem here is not Greece, but the precedent that it sets. There are much larger economies in the Euro-zone that may need a bail-out in the future.
The real "Libtards" are the Libertarians!
Germany will return to the DM, which all the sensible people in Europe will shift their savings and investments to, at which point the "new drachma", as the euro will be called then, won't be worth the paper it's printed on.
The vast majority of German exports are to Europe, and the majority of those to the Eurozone.
If Germany had a separate currency, it would appreciate relative to the rest of Europe. That would result in German exports being effectively becoming much more expensive. Similarly, with a drop in the value of the currencies (or joint currency) of the PIIGS countries, their own exports would suddenly become much more competitive and their wages much lower (without the pain of internal deflation).
That is the whole freakin' point of floating currencies. It allows effective inflation/deflation without internal real inflation/deflation, allowing the system to respond much more fluidly and rapidly. For example, German sovereign debts would have appreciated in cost (relative to other currencies), while Greek sovereign debts would depreciated sharply (relative to other currencies).
Switching to the Euro froze that, pushing all revaluations back internally, but the Eurozone failed to implement the internal corrective mechanisms that nations use (Federalised revenue and payment systems to compensate for regional downturns.)
Essentially, Germany has been gaining a huge advantage from the Euro. It prevents them pricing themselves out of the European markets via currency appreciation, while simultaneously not having to pay for failed regions within Europe. All the advantages of Euro-Federalisation with none of the costs to Germany that true Federalised economies like the US have.
Even better, Germans can play this bullshit "holier than thou" game when the system finally collapses in on itself.
Science is all about firing a drunk pig out of a cannon just to see what happens.
All EU citizens should demand a referendum asking if the taxpayers should pay this 'debt' created by derivatives and fraudulent market trading, or tell the bankers to write it off, suck it up, and never again be allowed to put depositor funds at risk on this commodities shell game ever again. And I have no trouble using some form of asset forfeiture against them to recover some of the stolen funds.
“He’s not deformed, he’s just drunk!”
No one forced Greece to accept the IMF and EU bailout. Greece could have restructured its debt before its bailout, but decided against it. Somehow I am missing how the IMF was cruel for offering loans to Greece and then expecting to eventually get the money paid back.
that's what the greek people expected to happen. just printing more money.
NOW essentially what the goverment can do is to tax all money that is being held in greek accounts, almost the same as just printing new money.
they can't just print more money since they're in the euro, but the people still expect (and syriza promised to !) to pay money as usual. they expect that the government pays out more money than it has because that's "democratic".
also a confusing ballot is democratic according to syriza.. with an unlawlully short campaign time to boot. not that it matters, the cash is going to run out anyways. it's like the prime minister and finance minister either deliberately try to run the country into a crisis or they don't have even cursory knowledge of how things work.
world was created 5 seconds before this post as it is.
Let's continue whoever57's analogy.
Your family have lived in a house for generations. A few years ago the house needed a bunch of work adding rooms and generally upgrading it to fit your new status as members of the respectable middle class. You didn't have the cash but you had the status and rates were cheap, so you took out a bank loan to cover it. As that loan came due, your husband lost his high paying job and had to take a cut.
So you begged with the banks and eventually they agreed to lend you more money, but at a higher interest rate. Paying more interest on less money is tough, the house continues to need work to keep it in good repair and you continued to not quite make ends meet. You go to the banks and beg for more money so you can keep paying the interest and repairs but the banks say no, they say you need to live within your means.
You promise to do that, and you quickly 'adjust' your finances to show how it's all going to work out. The bank sees through the farce immediately but he's a greedy fellow and with you agreeing to add 200 more basis points onto the rate, it's gotta be good for him. If you default, your cousin will probably cover it anyway so it isn't much risk.
You keep struggling, and you have to beg the banks for money every month. This starts to annoy and worry the banker, so he starts taking an increasing interest in your life. Don't do a good repair here, just leave the window broken... Don't send your kids off to uni, educate them at the local community college. These things save a little cash, but they also lead to you having to spend a whole lot more time looking after the house instead of making money. Even worse, your kids having a lower level of education means they can't get such a high paying job to help out which is a real problem since your grandparents have now retired and are moving back in.
You get desperate and crawl to the bank begging for more and more. They look over the situation and say, well, maybe, but you have to cancel all expenditure. House repairs, who needs them? Further education, completely abolished!
You hold a family conference. What to do? Give in to what the bank wants and destroy your family's future? Or default and have the bank potentially take possession of your family home. Put like that, it isn't such a hard call, you tell the bank to f. off and wait too see what will happen.
Who's at fault? You for living beyond your means? Yep. You for lying to the bank? Yep. The bank for accepting such an obvious lie? Yep. The bank for loaning money to someone that couldn't possibly pay it back? Yep. The bank for insisting on austerity measures that will have a negative long term fiscal impact, yep.
Does that help?
As a Greek, I am stunned, and disappointed, by the level of criticism (and hate!) in slashdot. What I clearly see is that fellow Europeans are being told huge LIES about the Greek crisis, and what this referendum means. I'll try to put things in perspective:
1. The money fellow European governments are giving us, are not free; They are loans, that we happily repay, even if the interest rate is a highway robbery compared to what they are paying.
2. Nobody said about "writing off the debt". What we ask is for the due date to go further in the future and the interest rate to be lower.
3. If the rest of the European governments cared at all to be repaid, then they wouldn't insist on "reforms" which have been 100% proven wrong, such as tax increases and pension/wage cuts. These are the stuff we object to. Many of the other important reforms (early pensions, unemployment benefits) are already imposed for quite some time now. I could write a book about how increasing taxes can't increase a country's GDP but guess what, there are even now so many books that prove this.
4. Especially to my Belgian friends: The 2 bailouts of Greece helped repay loans given by private sector banks. In effect, we traded private sector loans with state loans. In other words, you people lended us money so that your banks didn't lose their money. Now we owe you money (instead of your private banks) AND you think that this was a mistake. We do too, so we agree on this.
5. Greece doesn't need more money to "keep spending above its limit". We've had a more or less balanced budget for the last couple of years, apart from the loan interest payments. So we need you to lend us money so we can repay the loans you already gave us. Is this more reasonable than what we're asking? (To postpone the pay off date and decrease interest rate)
6. You are angry because we tricked our selves into the eurozone. You are right. We are angry too that you tricked us into the eurozone. There was nothing good for us there, no reason at all to be part of it, yet our politicians agreed with your politicians that we need to be part of it, no matter what. And they, all together, agreed to put Greece into the Eurozone, what a huge mistake that was and oh how many lies were told so we believed them (you did too). They made a ton of money out of it. Then they made a ton of money from the debt crisis itself. Meanwhile, half the Europe suffers from austerity (with Greece being the most hardly hit country, but Spain, Portugal, Ireland and Cyprus got a great feeling of what austerity means) and the other half is being taught that "lazy Greeks are asking to be given for more money).
Friends, stop hating each other, we're passed beyond this. The people is suffering, not only in Greece, but in other nations too. A Polish fried says "you should see my country", and some other said "we're poorer than you". And why is this? Who is benefiting? Does this mean that Poland et.al. have to double their taxes and cut their wages in half and pensions by 60%, destroy their healthcare and educational system, sell out everything that can be sold, just to become "richer"? Would anyone really suggest that? Then why is it a must-have for Greece? How on earth will this help repay the loans? Up until now, it has created a 27% unemployment and 99% misery.
So, please people, don't believe what your media say. You're not giving away money, we're not asking for free money. Greece has paid the price, and was punished hard, for decades of poor planning, bad habits and outrageous corruption. But it's time for other countries to stop hiding behind the propaganda and be realistic, just like we are now.