This is desperately sad and upsetting (Greek Crisis)

[RYH64E]

jsf said:

Like most problems in life, there can be more than one path to follow to find the appropriate solution. Only a bad doctor will continue to prescribe the same medicine if it isn't working for the patient, in very serious illnesses it often takes many different approaches before you find a solution that works for the individual.

Who's the patient, Greece or the EU?

[anonymous-user]

RYH64E said:

jsf said:

Like most problems in life, there can be more than one path to follow to find the appropriate solution. Only a bad doctor will continue to prescribe the same medicine if it isn't working for the patient, in very serious illnesses it often takes many different approaches before you find a solution that works for the individual.

Who's the patient, Greece or the EU?

Both, and its not the EU, its the Euro and the systems that are bankrolling this whole nonsense.

[RYH64E]

jsf said:

RYH64E said:

jsf said:

Like most problems in life, there can be more than one path to follow to find the appropriate solution. Only a bad doctor will continue to prescribe the same medicine if it isn't working for the patient, in very serious illnesses it often takes many different approaches before you find a solution that works for the individual.

Who's the patient, Greece or the EU?

Both.

To use your analogy, treatment has been prescribed based upon Greece being the illness and the EU the patient, loans to Greece have enabled them to repay various French and German financial institutions thereby limiting the spread of the illness, to the point where the doctors think that the patient will survive an amputation.

Treatment has never been intended to help Greece, rather it's (successfully) been targetted at protecting the EU from the consequences of a Greek financial collapse, which could have been disastrous back in 2008, less so in 2015.

[turbobloke]

RYH64E said:

jsf said:

RYH64E said:

jsf said:

Like most problems in life, there can be more than one path to follow to find the appropriate solution. Only a bad doctor will continue to prescribe the same medicine if it isn't working for the patient, in very serious illnesses it often takes many different approaches before you find a solution that works for the individual.

Who's the patient, Greece or the EU?

Both.

To use your analogy, treatment has been prescribed based upon Greece being the illness and the EU the patient, loans to Greece have enabled them to repay various French and German financial institutions thereby limiting the spread of the illness, to the point where the doctors think that the patient will survive an amputation.

Treatment has never been intended to help Greece, rather it's (successfully) been targetted at protecting the EU from the consequences of a Greek financial collapse, which could have been disastrous back in 2008, less so in 2015.

Quite so, Greece's agony has been prolonged deliberately to allow others to get their vaccinations up to date. The EU is nothing if not indifferent to democracy and and tolerant of suffering which allows the sacred project to march on with Alice.

[Condi]

Efbe said:

forgive me for being naive and simplistic, but the way I always thought this(Europe's economy) would work is this...

currency goes up and down in value according to how well the economy is doing.
The better it does, the more it is worth, so the less other countries can afford to buy from it. When the economy does worse the currency becomes worth less, and so other countries can buy things from there for cheaper. So essentially self-regulating.

Then when you put all the economies together, you remove the ability of this currency fluctuation. so a country doing well will keep on increasing, without the currency value changing there is nothing to bring it into check.
On the other side of the coin are the poorer countries, who can never sell their products because their currency is worth exactly the same as the wealthy ones without the investment the wealthy countries are getting.

Exactly what has happened with Germany and Greece.

Am I wrong here?

Not wrong at all, and why you cannot have financial union without political union. The system worked quite well, as long as the countries 'currencies' were similar enough to each other. When one deviates too far from the norm you end up with the issues we see today, and it was an obvious enough problem from the very beginning. Of course, Europe drafted all sorts of rules meant to prevent what is happening today, without any thought on how to enforce the rules, or what to do if someone (deliberately or not) broke them. I also think the whole thing has happened that fast, its taken the EU completely by surprise. A few years ago it was almost laughted at, and even a few months ago few would have considered it really a viable option. Now they have to face the fact that by the end of the week Greece might HAVE to have its own currency, be that official or otherwise.

[jonah35]

http://www.dailymail.co.uk/news/article-3149848/Gr...

[Twilkes]

jsf said:

They have been given the opportunity to reject the current medicine prescribed, that doesn't mean they don't know they still have to find another way to deal with the illness.

Looks like they have been big fans of homeopathy, trying to put the tiniest dilution of tax revenue into their economy as possible.

[Fantic SuperT]

longshot said:

I don't think it helps that it wasn't too long ago that the Greeks were fighting the Germans with pitchforks.
The war has been spoken of a few times so I think that some are seeing this as a German thing not a EU thing so may see it as a vote against Germany.

Germany reluctantly invaded Greece to defend its ally Italy, which had initiated a totally incompetent war of aggression against Greece and found itself on the brink of being counter-invaded in retaliation.

S'funny how the Greeks aren't asking the Italians for reparations.

[tumble dryer]

Fantic SuperT said:

Germany reluctantly invaded Greece to defend its ally Italy, which had initiated a totally incompetent war of aggression against Greece and found itself on the brink of being counter-invaded in retaliation.

S'funny how the Greeks aren't asking the Italians for reparations.

I didn't know that.

[Axionknight]

tumble dryer said:

Fantic SuperT said:

Germany reluctantly invaded Greece to defend its ally Italy, which had initiated a totally incompetent war of aggression against Greece and found itself on the brink of being counter-invaded in retaliation.

S'funny how the Greeks aren't asking the Italians for reparations.

I didn't know that.

They (Italy) advanced about a hundred miles, maximum, if I recall my history correctly, the German assistance also forced Hitler to delay his invasion of the Soviet Union, Operation Barbarossa, by a few months - if they hadn't done so, perhaps they could have captured Moscow before the Russian winter set in.

[Fishtigua]

Fantic SuperT said:

S'funny how the Greeks aren't asking the Italians for reparations.

Because they are in the deep doo-doo just as much as the Greeks but they have their tongue right up Germany's tingaling. They also design and manufacture stuff and export it, unlike the Greeks.

[NicD]

Here is a good article about the war reparations claim and why there isn't a case in law, even though this is unfair.

http://www.forbes.com/sites/timworstall/2015/04/07...

[ATG]

Efbe said:

Am I wrong here?

Not wrong, but only part of the story. If your economy has a considerable amount of foreign trade, and your exports and imports are reasonably well balanced, then a floating exchange rate does give a bit of useful negative feedback. A weakening currency will give your exporters a boost albeit at the expense of anyone importing goods or who owes money overseas.

But if your economy has weak exports, devaluation just jacks up the prices of imported goods and suppresses consumer spending.

If your currency is steadily declining in value, then everyone gets used to that and predicts that it will keep happening. If I were to lend you some money and you told me you'd pay it back in drachma, when I set the interest rate on the loan I'd factor in how much I'd expect the currency to devalue over the term of the loan. So the cost of borrowing goes up and offsets the "benefit" of the devaluation. I'll also insist on pricing a risk premium into the rate; i.e. I'll need to be paid to run the risk that the currency might devalue more than I currently expect. So borrowing costs are actually disproportionately higher for a weak currency. Persistent devaluation is just the external face of inflation. It makes borrowing disproportionately expensive, it make investment riskier, it punishes savers.

The irony is that far from being a technocratic conspiracy as WC98 and others have suggested, back in the late 90s the Greeks were dancing in the streets to welcome their membership of the Euro precisely because they were fed up of persistently high inflation and high interest rates and a weak and weakening drachma. The goal of euro membership incentivised them to start the process of economic reform. Sadly once they achieved membership the process of reform stopped. Once trading in a hard currency they could borrow far more cheaply, they could have long term monetary certainty. It was a huge economic boost and it needed to be tempered by fiscal reform. It was a golden opportunity to reduce government spending and sort out tax collection. But the opportunity was squandered.

[Schmy]

ATG said:

back in the late 90s the Greeks were dancing in the streets to welcome their membership of the Euro

Whilst I agree with much of your post, Greece didn't join the single currency until 2001.

As an aside this chart goes some way to show why they're in such do-do

[Moonhawk]

I don't get some of the headlines. The Greeks have rejected more austerity?

So despite their current debt levels - are they really advocating INCREASING their budget deficit? (which as a consequence will plunge them deeper into debt).

[Fishtigua]

Glad you found that chart, it goes to show just how little fiscal responsibility they have. On one recent look at Greeks who no tax at all found 164 yachts and 12 private aircraft on the books and they have claimed no income.

[Derek Smith]

Fishtigua said:

Glad you found that chart, it goes to show just how little fiscal responsibility they have. On one recent look at Greeks who no tax at all found 164 yachts and 12 private aircraft on the books and they have claimed no income.

To be fair, it is like a lot of the rich in this country who reckon they are not of this country who pay little/no tax.

The Greeks do have a hand to play and this vote supports it.

It is not as if there will be no more negotiations. The Euro group will want Greece to stay, the EU will want Greece to stay, the only question is cost. This can be taken to establish a baseline.

The only question is whether they have overplayed their hand.

Whatever happens it is going to cost everyone else. This can be seen as a way of reducing the costs to Greece.

[longshot]

Fantic SuperT said:

longshot said:

I don't think it helps that it wasn't too long ago that the Greeks were fighting the Germans with pitchforks.
The war has been spoken of a few times so I think that some are seeing this as a German thing not a EU thing so may see it as a vote against Germany.

Germany reluctantly invaded Greece to defend its ally Italy, which had initiated a totally incompetent war of aggression against Greece and found itself on the brink of being counter-invaded in retaliation.

S'funny how the Greeks aren't asking the Italians for reparations.

Just posting what I'm hearing.

It's all sort of like Monopoly.
They went to the community chest and were offered GO to jail or take a chance. They taken the chance.

[turbobloke]

Derek Smith said:

Fishtigua said:

Glad you found that chart, it goes to show just how little fiscal responsibility they have. On one recent look at Greeks who no tax at all found 164 yachts and 12 private aircraft on the books and they have claimed no income.

To be fair, it is like a lot of the rich in this country who reckon they are not of this country who pay little/no tax.

Given the title of the chart, surely it's about lax enforcement of known tax debts, if so then the widespread evasion in Greece is another matter and both are different to use of non-dom or lawful avoidance measures in the UK. Not much like the rich of this country then, whoever 'the rich' may be.

[speedy_thrills]

Derek Smith said:

The only question is whether they have overplayed their hand.

Looks like a gamblers throw to me.