World Politics

[blutto]

....The money Greece owes compared to the bailouts banks got...just sayin'...

https://twitter.com/ShafikFM/status/617773061304135680

Cheers

 

[python]

the 2 latest developments reported in the guardian seem to have advanced the chance of a 'deal' soon:
http://www.theguardian.com/world/live/2015/jul/06/greek-referendum-eu-leaders-call-crisis-meeting-as-bailout-rejected-live-updates

Snap reaction: Greece heading towards national unity

IMF "stands ready to assist Greece"

 

[Alpe d'Huez]

Thanks for the good posts guys. I think Stiglitz nailed it, to be honest. This has to do with controlling the debt, which allowed creditors to get their money for nothing. Blutto's posts seem to cut right to the gut of it, especially that bailout comparison. Out of that $370b, how much really made it into the pockets of the working poor in Greece? I imagine very little. It appears as if the banks got easy money, while working poor people get as little as possible. Just like America.

The deeper I look, the more it appears something akin to what Python and Foxxy said though is likely to happen. No matter what Greece does as a nation, IMF may have the muscle, but they're left holding the Old Maid card, and they'd love to first save their own skins, and second, control the debt, which means overall control as noted. If they can't control all of it, they'll control as much as they can. As Foxxy noted, most of this is already out of the books and anticipated anyway it seems. All this appears to allow Tsipras some wiggle room in negotiating in Brussels. And if I were him, I'd come with a big bat and play hardball.

As insane as it once seemed, I now can more easily see why the Greek people voted the way they did. And it wouldn't surprise me if they don't like any forthcoming deal, they'll speak out loudly about it. Even if the ATM's stop working and the pension checks bounce.

 

[blutto]

....interesting development...
-------------------------------------------------------------------------
"Greece creditors will gain nothing from toppling Europe-lover Yanis Varoufakis

---

It appears that Euclid Tsakalotos will take over as finance minister. Another brilliant economist - educated at St Paul's and Oxford, with a Celtic wife - he has earned a reputation as safe pair of hands since becoming chief negotiator in the debt talks.

He is a man who keeps his outward emotions in check. Mr Tsakalotos will not be calling anybody a terrorist.

But be careful what you wish for. If the creditors think that he will be a push-over - more willing to accept terms that fall short of genuine debt relief - they are likely to be disappointed. He is comes from the radical Marxist wing of Syriza, and shares little of Mr Varoufakis's European idealism.

Scratch a little and you start to discover a eurosceptic who never wanted Greece to join the euro, indeed who already foresaw with remarkable prescience in this paper in 1998 that EMU would not bring about the convergence of the core and peripheral countries. He was miles ahead of the amateurs religiously touting the benefits of EMU.

http://www.telegraph.co.uk/finance/economics/11720907/Greece-creditors-will-gain-nothing-from-toppling-Europe-lover-Yanis-Varoufakis.html

....trading a European idealist for a Marxist....hmmm....this may get to be even more fun....

Cheers

 

[Amsterhammer]

Apologies if already posted, but this hard hitting and pretty lucid piece goes straight to the heart of the clusterfcuk that Greece has become.

To put that in plain English – the troika’s 2012 plan was designed to leave Greece in disastrous economic shape if the troika believed its own dogmas and its own wildly optimistic projections. It was only after forcing the Greek people into a pointless purgatory of a decade of disaster that the troika would consider providing “debt relief.” The reality, in 2015 (and 2014 under the prior Greek government), is already far worse in terms of the Greek debt-to-GDP ratio that the troika used in its supposedly worst-case projections for how bad things could get by 2020.

Given German politics, and Germany’s hegemony over the EU and the ECB, the German disdain for the Greek people, and German politics it was dubious that there would be any debt relief even after a decade of pointless human sacrifice by the Greeks. The probability that Germany would agree to allow adequate debt relief in 2020 to permit the Greeks to finally escape the creditor’s debt trap was effectively zero.

Debt relief for Greece is unquestionably what is needed, as all serious financial analysts agree. Such debt relief is routine for corporate debtors – but when a public debtor seeks the same type of relief the character of the nation’s leaders and peoples are endlessly abused. The troika’s “bailout” went overwhelmingly to the creditors of Greek banks – not the Greek government of people. Those creditors are overwhelmingly EU banks. The troika’s “Greek bailout” is fundamentally a bailout of EU banks.

It is nonsensical to force a nation into a decade of Great Depression-level unemployment – and then provide debt relief. Providing the debt relief now (which should have been provided five-to-seven years ago) is the policy that would minimize damage not just to the Greek people, but the peoples of the EU.

http://neweconomicperspectives.org/2015/06/the-imf-defense-of-it-actions-against-the-greeks-is-an-unintended-confession.html

 

[Alpe d'Huez]

Re:

Apologies if already posted, but this hard hitting and pretty lucid piece goes straight to the heart of the clusterfcuk that Greece has become.

It is nonsensical to force a nation into a decade of Great Depression-level unemployment – and then provide debt relief. Providing the debt relief now (which should have been provided five-to-seven years ago) is the policy that would minimize damage not just to the Greek people, but the peoples of the EU.

http://neweconomicperspectives.org/2015/06/the-imf-defense-of-it-actions-against-the-greeks-is-an-unintended-confession.html

Good post, link. Did not realize that about the lion's share of the bailouts basically going to EU controlled banks. but it seems very logical now. This all seems very American to me, the more i read about it.

That last paragraph seems to sum things up well.

 

[blutto]

Re: Re:

Apologies if already posted, but this hard hitting and pretty lucid piece goes straight to the heart of the clusterfcuk that Greece has become.

It is nonsensical to force a nation into a decade of Great Depression-level unemployment – and then provide debt relief. Providing the debt relief now (which should have been provided five-to-seven years ago) is the policy that would minimize damage not just to the Greek people, but the peoples of the EU.

http://neweconomicperspectives.org/2015/06/the-imf-defense-of-it-actions-against-the-greeks-is-an-unintended-confession.html

Good post, link. Did not realize that about the lion's share of the bailouts basically going to EU controlled banks. but it seems very logical now. This all seems very American to me, the more i read about it.

That last paragraph seems to sum things up well.

...yeah its nonsensical only to someone with a conscience but probably makes perfect sense to some money grubbing someone berefit of morals ....therein lies the rub...

Cheers

 

[blutto]

....for what its worth...

"Piketty: My book recounts the history of income and wealth, including that of nations. What struck me while I was writing is that Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the First nor the Second World War. However, it has frequently made other nations pay up, such as after the Franco-Prussian War of 1870, when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt. The history of public debt is full of irony. It rarely follows our ideas of order and justice.

ZEIT: But surely we can’t draw the conclusion that we can do no better today?

Piketty: 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."

the rest:
https://t.co/Dc2pPFrHRM

Cheers

 

[Amsterhammer]

That Piketty quote is an excellent find, blutto! Thanks.

 

[FoxxyBrown1111]

Germany is the country that has never repaid its debts. It has no standing to lecture other nations.

Germany does not lecture anyone. If at all, Germany is lectured by outside influences, while "Der dumme Michel" works for their profits. Just have a look who owns the Dax-30 companies. For starters...

 

[python]

https://www.stratfor.com/weekly/greek-vote-and-eu-miscalculation?utm_source=freelist-f&utm_medium=email&utm_term=Gweekly&utm_campaign=20150707&utm_content=readmoretext&mc_cid=fe84a80645&mc_eid=c44ae8e977

This is an exceptionally lucid analysis from a rather conservative source ...the eu low game is exposed and and greece's options are explained

 

[Amsterhammer]

The general level of misinformation that has been fed to western news consumers becomes more appalling when you realize how long it's been going on. Another excellent article that debunks stereotypes and myths.

On Sunday, Greek citizens overwhelming rejected the bailout plan penned by its creditors. Subsequently, many observers have condemned the Greeks as lazy, ungrateful and unwilling to accept the consequences of their spendthrift ways.

But the Greeks were right to say no. What lenders were trying to force upon them is patently unfair and ultimately destructive to the entire EU. The real problems are inherent to the euro system itself and treating Greece like an irresponsible teenager who must be scolded by their parents is both a mis-diagnosis and a guarantee of continued problems.

http://www.forbes.com/sites/johntharvey/2015/07/07/five-reasons-greeks-were-right/

 

[Amsterhammer]

Written Greek proposals for second and third phase assistance structure to be received by Thursday at the latest.

Complete summit of all EU country leaders next Sunday.

End of this week is the final limit for Greece.

 

[Merckx index]

Here’s a very simple summary of what happened in Greece. I don’t think there’s anything here that hasn’t been discussed in the links provided by Blutto and others, but it puts it all in a nutshell:

Stage 1: The first and foremost reason that Greece got into trouble was the “Great Financial Crisis” of 2008 that was the brainchild of Wall Street and international bankers. If you remember, banks came up with an awesome idea of giving subprime mortgages to anyone who can fog a mirror. They then packaged up all these ticking financial bombs and sold them as “mortgage-backed securities” at a huge profit to various financial entities in countries around the world.

Stage 2 is when the financial time bombs exploded. Commercial and investment banks around the world started collapsing in a matter of weeks. Governments at local and regional level saw their investments and assets evaporate. Chaos everywhere!

Vultures like Goldman Sachs and other big banks profited enormously in three ways: one, they could buy other banks such as Lehman brothers and Washington Mutual for pennies on the dollar. Second, more heinously, Goldman Sachs and insiders such as John Paulson…had made bets that these securities would blow up. Paulson made billions, and the media celebrated his acumen. (For an analogy, imagine the terrorists betting on 9/11 and profiting from it.) Third, to scrub salt in the wound, the big banks demanded a bailout from the very citizens whose lives the bankers had ruined!...

In Greece, the domestic banks got more than $30 billion of bailout from the Greek people. Let that sink in for a moment – the supposedly irresponsible Greek government had to bail out the hardcore capitalist bankers.

Stage 3 is when the banks force the government to accept massive debts...One of the proven techniques used by the parasitic international bankers is to downgrade the bonds of a country. And that’s exactly what the bankers did, starting at the end of 2009. This immediately makes the interest rates (“yields”) on the bonds go up, making it more and more expensive for the country to borrow money or even just roll over the existing bonds.

From 2009 to mid-2010, the yields on 10-year Greek bonds almost tripled! This cruel financial assault brought the Greek government to its knees, and the banksters won their first debt deal of a whopping 110 billion Euros.

Stage 4: Now, the rape and humiliation of a nation begin under the name of “austerity” or “structural reforms.” For the debt that was forced upon it, Greece had to sell many of its profitable assets to oligarchs and international corporations…

So what happens after privatization and despotism under bankers? Of course, the government’s revenue goes down and the debt increases further. How do you “fix” that? Of course, cut spending! Lay off public workers, cut minimum wage, cut pensions…All these measures have resulted in Greece going through a financial calamity that is worse than the Great Depression of the U.S. in the 1930s...

After all this, what is the solution proposed by the heartless bankers? Higher taxes! More cuts to the pension! It takes a special kind of a psychopath to put a country through austerity, an economic holocaust.

http://www.nationofchange.org/2015/07/05/greece-what-you-are-not-being-told-by-the-media/?utm_content=buffer53453&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

Added later: Piketty to Merkel: "Back off"

http://www.thenation.com/article/austerity-has-failed-an-open-letter-from-thomas-piketty-to-angela-merkel/

 

[meat puppet]

Re:

Written Greek proposals for second and third phase assistance structure to be received by Thursday at the latest.

Complete summit of all EU country leaders next Sunday.

End of this week is the final limit for Greece.

Yup, but maybe add a maybe. My understanding is that this week the Eurogroup will want to have the issue firmly framed in terms of either Bailout III or Grexit.

However, as EU stands for exceptions upon exceptions, so I would not be very surprised if other pathways such as upholding the current impasse emerge. I would be somewhat surprised if Tsipras sold out immediately after the Greeks voted against what in all likelihood will constitute the bulk of the bailout III. Also I would be very surprised if Syriza had the balls and hard pushed towards Grexit, and quite surprised if the Troika downright pushed Greece off.

I tend to think that the EU endgame is humiliating Syriza (and the left more generally) plus utilising the crisis for pushing for the federal state, and not Grexit. Minor debt reductions might be an expense they are willing to pay, but I doubt they will have to. In turn, allowing Greece any fiscal policy space is a no go, because it would very likely expose the austerity and rules based economic policy are workable -myths.

 

[l.Harm]

https://www.youtube.com/watch?v=P84tN0z4jqM

Speech of Verhofstadt, telling Tsipras what to do.

 

[FoxxyBrown1111]

Re:

Here’s a very simple summary of what happened in Greece. I don’t think there’s anything here that hasn’t been discussed in the links provided by Blutto and others, but it puts it all in a nutshell:

http://www.nationofchange.org/2015/07/05/greece-what-you-are-not-being-told-by-the-media/?utm_content=buffer53453&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

One great summary. Word for word. 100% correct...
Unfortunately it will be dismissed as a "CT" by a "suspect site".
When I read the vitriol against Greece in german and international forums (leave alone the Anti-Greece articles written by MSM newspapers), I just feel like vomiting... People are brainwashed to the max (the evil Greece, and only them, blabla) no matter if in Germany or Lithuania or any other eurpopean country.

 

[Alpe d'Huez]

That really does sum it up very well. I'd be curious to see what, if any, reaction there would be counter to this. Excellent find Merckx.

 

[rhubroma]

Among those who take great pleasure in the Tsirpras political victory (which, we just recall en passant, is a victory of the Greek left) and for a healthy, inevitable nudge inflicted upon the Europe nitpicker, there are many questionable subjects. Xenophobic champions like Le Pen and Salvini, reactionary isolationists like Farage, ire raising populists with good intentions, but little lucidity, like any number of the anti-Europe movements. This circumstance alone should make the troubled Europeanists understand that they need to do something and very soon at that, if they don't want the political confrontation to become between the obtuse eurofinancialists and the antieuronationalists, or worse fascists. If there actually exists a European "Protestantism," discontent over the dogmas of the merkelian Church, it would be most advisable that they affix their thesis - even if it has less than 95 points - to some important door that's well visible. It would be most welcome if they started to bang their fists on the table and shout that the European community can't sustain such starch provincialism and that Europe needs to change set before it becomes even to the eyes of the moderate public a German protectorate, or at best a Franco-German protectorate. I don't say incapable of governing, but even simply to understand the different economic calibers, or primary needs, or political cultures of its various members and not simply a boarding school for reeducation.

 

[Amsterhammer]

The as always intelligent, articulate, and spot on, views of Simon Jenkins.

Talk of Greek bankruptcy and its dropping the euro as “an abyss … a nightmare … chaos … unthinkable anarchy” is bankers’ drivel. It will be tough to handle – made vastly more so by being delayed, unplanned and enforced. But handled it must be. Greece is bankrupt. It cannot pay its debts, let alone any more forced on it by “bailout”. There must be a managed default and a restarting of the engine of recovery. That is the only “deal” that should be discussed this weekend.

Sometimes the small voice of economics should rise above the shrieking hysterics of politics. The laws of bankruptcy were invented by the Victorians not to stick plaster over capitalism’s wounds. Insolvency and limited liability lay at the core of commercial enterprise. Borrower and lender alike had to accept risk for capitalism to thrive. Greece within the eurozone was allowed to borrow riskily and was lent to riskily. Any fool (except a eurofool) knew it would end in disaster.

The IMF last week admitted Greece’s debts were “unsustainable”. But such is the political arthritis now afflicting Europe’s “technocratic” rulers that they ignored the fact. They concentrate on their one concern: somehow extending Greece’s repayments so German, French and British banks could have even larger loans underpinned. It is bankers, not Greeks, who are being “bailed out”. They want Greek taxpayers to go on paying interest even if the principal is as beyond reach as a tsarist bond.

Austerity economics was always meant as a short, sharp shock, not a coherent economic policy. For Greece it has been about as productive as prisoners sewing mailbags. Growth has been stifled, demand suppressed and investment stalled. National output since 2008 has fallen by a quarter, unemploying 25% of its workforce. It is simply crazy. Greece cannot grow and cannot service future borrowings, let alone past ones. It is seeing Europe’s worst recession since the war – a deliberate, man made recession.

http://www.theguardian.com/commentisfree/2015/jul/08/greece-catastrophe-eurozone-grexit-default

 

[Alpe d'Huez]

Another excellent post and link. Thanks.

 

[rhubroma]

I'd only exchange "politics" for "economics," and vice versa, in the opening of paragraph two (which, in the age of homo economicus, as per my last post, is where the problem arrises).

 

[FoxxyBrown1111]

homo economicus, as per my last post, is where the problem arrises

Not true. Today its the economics, yesterday it was ideologies, yesteryear it was religions (ok, still is in some very dark places in this world... no, I don´t mean sub-sahara Africa)...

The true problem lays here, always did:
"Two things are infinite: the universe and human stupidity; and I’m not sure about th’universe!" (Einstein)

Without that human stupidity, no EU dictatorship, no fiat money system, no oil wars, no Grexit, and so on...

 

[rhubroma]

Re:

homo economicus, as per my last post, is where the problem arrises

Not true. Today its the economics, yesterday it was ideologies, yesteryear it was religions (ok, still is in some very dark places in this world... no, I don´t mean sub-sahara Africa)...

The true problem lays here, always did:
"Two things are infinite: the universe and human stupidity; and I’m not sure about th’universe!" (Einstein)

Without that human stupidity, no EU dictatorship, no fiat money system, no oil wars, no Grexit, and so on...

I was of course referring to the simple fact that the calling of politics today, in the age of homo economicus, has been to permit the economy to assume in our public life an abnormal position of utter dominance (as per another pervious post of mine).

More than stupidity, therefore, I'd say it's been the sinisterly shrewd and cynically motivated calculations of the credit institutions, which were egged on and abetted by their minions in the governments, that has allowed them to basically get away with murder.

A politics that does not defend the polis is obsolete and, historcally, a failure.

 

[FoxxyBrown1111]

OK, agree with that. Still the combined stupitidy of masses makes all the shit possible...
Imagine, a majority (I see that if only reading forums*) of people still think the crisis is because greeks don´t work, never pay taxes, are lazy in general... Yet with just a little investment of time, all these people could find out the truth. Same goes with the so-called "refugees" dramas, Ukraine conflict, Syria, etc, etc...
I mean we don´t live in the middle age where the only information source was the church...

* Now imagine older people that are fully dependent on the propaganda wars by ARD & ZDF in Germany. Lies, lies, and more lies... Still those older people can´t be excused. They shall be wise, having life experience alone shall show them something just doesn´t fit in the stories they are told.