What next for Greece?

[MrGongGong]

http://en.wikipedia.org/wiki/Skynet_(Terminator)

yes

you can edit quotes as well as your own text .................... like this

I am giving all my money to pay for a large statue of MrP on his bike to be placed in the foyer of the Royal Opera House

or even

You know , when I think about it, the Pope seems more and more to be a bit of a looser and it's about time he got with it and started hanging out at some of the clubs near Vauxhall Bridge , just over the road from the LPO offices

(no offence meant scotty and i'll delete it if you object , OR a large Talisker .......... your choice )

[teamsaint]

O sod this for a game of soldiers
I am going back to arguing with panj,

bloody techies, mumble grumble.............

[Beef Oven]

yes

you can edit quotes as well as your own text .................... like this



or even


(no offence meant scotty and i'll delete it if you object , OR a large Talisker .......... your choice )

Trust you GG, trust you!

[aeolium]

This is a useful analysis of the current Greek situation and it does suggest that the hope of some EU politicians and media commentators that the Greeks will pull back and vote again for a centrist party that will support the bail-out measures is quite ill-informed and misguided. The odds are still on default and exit from the Euro.

[Lateralthinking1]

This is a useful analysis of the current Greek situation and it does suggest that the hope of some EU politicians and media commentators that the Greeks will pull back and vote again for a centrist party that will support the bail-out measures is quite ill-informed and misguided. The odds are still on default and exit from the Euro.

I agree that it is a good analysis. However, Syriza (52) plus PASOK (41) plus the Social Democrats (19) equals 112. That is 39 away from a majority. It seems to me that Syriza has a reasonable chance to pick up those 39 if it gets its strategy right.

First, it needs to ask the 35% who didn't vote - that is a hell of a lot of people - to vote for Syriza. Abstention, it should say, will not change things.

Next, it should target KKE (Communist) voters along the lines "we may have our differences but support for your party hands the matter over to Europe because it won't form alliances with us". KKE have no less than 26 seats for the taking.

Thirdly, it should surely recognise that a percentage of voters for the far right Golden Dawn party are protest voters rather than fascists. Get some of them to vote for Syriza too and that's a percentage of another 21 seats.

And don't forget that a further 33 seats are with the Independent Greeks. That is a sort of UKIP. Would Nigel Farage join ranks if needs be with Dennis Skinner to get power back from Europe? Quite possibly if there was really no other alternative.

The system isn't a proportional one. Some seats were only just lost by Syriza in multi-member constituencies. Plus the winner gets 50 extra seats. If you deduct the 50 from the 108 New Democracy got they won only 6 more seats than Syriza anyway. Of course, a Syriza win in a second election is the kind of possibility that the EU mainstream and even British journalists dare not whisper.

[aeolium]

I think some minor adjustment to the bail-out deal (or the Fiscal Pact treaty) is of no use - it would be another attempt to kick the can down the road and postpone the moment of doom, rather than trying to address the fundamental problems of the Eurozone.

Here is an article that argues what a poor idea the Euro single currency was in the way it was set up - a structure that of course remains in place. But if you think this is overly flippant in tone and only to be expected coming from the Torygraph, try this more serious article which certainly does not proceed from someone of a right wing persuasion, and in particular look at the graphs of economic statistics.

The Eurozone is a disastrous concept which has proved damaging economically but is now most damaging socially and politically and threatens the integrity of the EU (which could be a perfectly workable concept shorn of monetary union). Tinkering with temporary bailouts to try and postpone disaster is not a solution but actually creating the conditions of a much worse crisis.

[scottycelt]

yes

you can edit quotes as well as your own text .................... like this



or even


(no offence meant scotty and i'll delete it if you object , OR a large Talisker .......... your choice )

I'll have a couple of extra large Islay Malts, if you don't mind, Mr GG ... btw, how do you know the exact whereabouts of all these dodgy clubs in London? ... ah, I see, you know someone who knows some ... ?

[Lateralthinking1]

The Eurozone is a disastrous concept which has proved damaging economically but is now most damaging socially and politically and threatens the integrity of the EU (which could be a perfectly workable concept shorn of monetary union). Tinkering with temporary bailouts to try and postpone disaster is not a solution but actually creating the conditions of a much worse crisis.

Britain finally paid off its 1940s loan to the US on 29 December 2006. Three days later, the second wave of "Eurozonism" began with the admission of Slovenia - (Greece was accepted between the first and second waves) - and within months the United States had plunged itself and everyone else into a financial crisis. Some "coincidence". Perhaps Europe was looking too strong.

Germany didn't want to give up the Deutschmark. Mitterand was the big advocate of the Euro so in some ways it is right that Hollande accepts some responsibility for what happens next. Still, following German unification, an event which appalled Margaret Thatcher, an ERM had become more likely. First, Germany's surplus position was lost; then the French and the Italians devalued.

The Germans hoped an ERM would be sufficient to sustain their economy. But with speculation the ERM broke down and the Euro seemed to be the only answer. Merkel is not at all off the hook just because her country took a pragmatic view rather than an ideological one. Mitterand might just have thought about the common good. The Germans thought about their own interests.

[John Skelton]

Athens 2004 Olympics: what happened after the athletes went home?

http://www.guardian.co.uk/sport/2012/may/09/athens-2004-olympics-athletes-home?newsfeed=true

[ahinton]

I think some minor adjustment to the bail-out deal (or the Fiscal Pact treaty) is of no use - it would be another attempt to kick the can down the road and postpone the moment of doom, rather than trying to address the fundamental problems of the Eurozone.

Here is an article that argues what a poor idea the Euro single currency was in the way it was set up - a structure that of course remains in place. But if you think this is overly flippant in tone and only to be expected coming from the Torygraph, try this more serious article which certainly does not proceed from someone of a right wing persuasion, and in particular look at the graphs of economic statistics.

The Eurozone is a disastrous concept which has proved damaging economically but is now most damaging socially and politically and threatens the integrity of the EU (which could be a perfectly workable concept shorn of monetary union). Tinkering with temporary bailouts to try and postpone disaster is not a solution but actually creating the conditions of a much worse crisis.

Whilst the current situation is indeed a parlous one for Greece itself and with inevitable grave repercussions not only for the remainder of the Eurozone but also for the remainder of EU and indeed the remainder of non-EU Europe, I remain to be convinced that the Eurozone is necessarily a disastrous concept per se, simply because, had the single currency's launch been delayed until a reasonably large group of participating economies had been brought into balance one with another, we might instead have come to look at a Eurozone history that will have been far less "damaging socially and politically" and much less likely to risk threatening "the integrity of the EU"; I realise, of course, that such a view represents a stretch of the imagination that would have to be predicated upon a willingness to embrace wisdom after the event, but it is the sheer prematurity of the Eurozone's existence that I believe to be its greatest fault and that may even become the harbinger of its ultimate downfall.

However, what has happened has nevertheless happened, so quite how Greece can hope to extract itself from the consequences, how the other Eurozone nations can repair the damage still being done to them as a result and how the rest of EU and the remainder of Europe recovers from it all remains very much open to debate, just as does the very question of whether such a Europe-wide recovery is even possible in the short, medium or long term.

[aeolium]

I remain to be convinced that the Eurozone is necessarily a disastrous concept per se, simply because, had the single currency's launch been delayed until a reasonably large group of participating economies had been brought into balance one with another, we might instead have come to look at a Eurozone history that will have been far less "damaging socially and politically" and much less likely to risk threatening "the integrity of the EU"

But it would have taken generations before that balancing could have happened, and without any willingness of any of the wealthier countries (especially Germany) to agree to the principle of fiscal transfer between richer and poorer regions of the zone, monetary union was doomed to fail. Not only that but there was no mechanism and no willingness among EU leaders to enforce the Stability and Growth Pact rules by which deficits were kept below 3% of GDP and public debt below 60% of GDP, and these rules were broken by most of the EU members including Germany and France. Germany benefited by this laxity by being able to export more goods to southern Europe so were actually complicit in the greater indebtedness of those countries. This makes Germany's present attitude quite hypocritical as well as being exceptionally damaging as a groundplan for resolving the crisis. It is impossible to see how Greece or indeed the other most indebted countries like Portugal can extricate themselves from this mess by pursuing the misconceived EU policy. It should also be remembered that both these countries (and Spain) have known authoritarian or military rule within living memory.

[ahinton]

But it would have taken generations before that balancing could have happened, and without any willingness of any of the wealthier countries (especially Germany) to agree to the principle of fiscal transfer between richer and poorer regions of the zone, monetary union was doomed to fail. Not only that but there was no mechanism and no willingness among EU leaders to enforce the Stability and Growth Pact rules by which deficits were kept below 3% of GDP and public debt below 60% of GDP, and these rules were broken by most of the EU members including Germany and France. Germany benefited by this laxity by being able to export more goods to southern Europe so were actually complicit in the greater indebtedness of those countries. This makes Germany's present attitude quite hypocritical as well as being exceptionally damaging as a groundplan for resolving the crisis. It is impossible to see how Greece or indeed the other most indebted countries like Portugal can extricate themselves from this mess by pursuing the misconceived EU policy. It should also be remembered that both these countries (and Spain) have known authoritarian or military rule within living memory.

Correct on all counts; it is indeed that enormous prematurity and short-sightedness that has helped to being about the current woes, although it would be fair to add that these have been compounded by the wholesale export of other economic woes from outside Europe, not least US. I'm not sure that it would necessarily have taken "generations", as you suggest, but it would certainly have taken a lot of time. You state that "it is impossible to see how Greece or indeed the other most indebted countries like Portugal can extricate themselves from this mess by pursuing the misconceived EU policy"; frankly (as I've already implied), it's far from easy to determine how they can extricate themsevles from it at all, whatever they may or may not do and regardless of whether they leave the Eurozone either voluntarily (most unlikely in all cases, I suspect) or by being unceremoniously ejected therefrom. It's also worth noting that, whatever the ongoing outcomes, Britain will be affected adversely even though it is outside the Eurozone and it would still be so affected even if it were outside EU.

[aeolium]

it's far from easy to determine how they can extricate themsevles from it at all, whatever they may or may not do and regardless of whether they leave the Eurozone either voluntarily (most unlikely in all cases, I suspect) or by being unceremoniously ejected therefrom.

My own view is that Greece's only chance is to leave the Eurozone and default, imposing exchange controls and reintroducing the drachma. It would be much better if this could be an orderly default planned with the agreement and foreknowledge of the EU leaders though I fear they are so wedded to the dogma of protecting the Euro at all costs even if they are massive socially and politically that a disorderly default is more likely - and this will be more damaging to the Eurozone and the wider financial system as well as Greece. There will of course be immense difficulties for a period but it will enable Greece to devalue and make its goods and services (especially tourism) more competitive. There is some parallel with Argentina 10 years ago in that its currency was pegged to the US dollar so was also restricted from devaluation. Argentina defaulted and though there were two awful years, the economy recovered and grew at a rate of 9% for five years and thereafter 7%. The problem if Greece remains in the Eurozone is that no kind of growth is foreseeable for years if not decades.

Yes, a Greek default and Eurozone exit is a headache for the financial system but I believe a large part of it already believes it is close to inevitable. It is only the politicians who don't.

[ahinton]

My own view is that Greece's only chance is to leave the Eurozone and default, imposing exchange controls and reintroducing the drachma. It would be much better if this could be an orderly default planned with the agreement and foreknowledge of the EU leaders though I fear they are so wedded to the dogma of protecting the Euro at all costs even if they are massive socially and politically that a disorderly default is more likely - and this will be more damaging to the Eurozone and the wider financial system as well as Greece. There will of course be immense difficulties for a period but it will enable Greece to devalue and make its goods and services (especially tourism) more competitive. There is some parallel with Argentina 10 years ago in that its currency was pegged to the US dollar so was also restricted from devaluation. Argentina defaulted and though there were two awful years, the economy recovered and grew at a rate of 9% for five years and thereafter 7%. The problem if Greece remains in the Eurozone is that no kind of growth is foreseeable for years if not decades.

Yes, a Greek default and Eurozone exit is a headache for the financial system but I believe a large part of it already believes it is close to inevitable. It is only the politicians who don't.

Very articulately put, if I may say so! The extent of the problem facing Greece becomes all too painfully apparent when considering your statement that "Greece's only chance is to leave the Eurozone and default, imposing exchange controls and reintroducing the drachma" directly alongside your later one that "if Greece remains in the Eurozone is that no kind of growth is foreseeable for years if not decades"; whilst I accept your interesting and (in and of itself) valid Argentinian example, I take leave to doubt that so positive and ultimately successful an outcome of Greece leaving the Eurozone voluntarily or (as is far more likely) otherwise is on the cards, for a number of reasons not least of which is that, in or out of the Eurozone, Greece's indebtedness will remain and, if it does leave the Eurozone and revert to its own currency, it will have somehow to try to borrow the not inconsiderable cost of making this seismic change and it's far from immediately obvious in such strained circumstances who might be prepared to consider lending Greece those funds.

[Serial_Apologist]

Very articulately put, if I may say so! The extent of the problem facing Greece becomes all too painfully apparent when considering your statement that "Greece's only chance is to leave the Eurozone and default, imposing exchange controls and reintroducing the drachma" directly alongside your later one that "if Greece remains in the Eurozone is that no kind of growth is foreseeable for years if not decades"; whilst I accept your interesting and (in and of itself) valid Argentinian example, I take leave to doubt that so positive and ultimately successful an outcome of Greece leaving the Eurozone voluntarily or (as is far more likely) otherwise is on the cards, for a number of reasons not least of which is that, in or out of the Eurozone, Greece's indebtedness will remain and, if it does leave the Eurozone and revert to its own currency, it will have somehow to try to borrow the not inconsiderable cost of making this seismic change and it's far from immediately obvious in such strained circumstances who might be prepared to consider lending Greece those funds.

A genuine question: was not Argentina indebted to the States, in the same way Greece would still be to the EU?

Following this morning's (unfollowable) Melvin Bragg-"led" discussion on Games Theory on R4, I am however fascinated by the way in which America, and now Germany, are offloading the consequences of their own economic strategies onto other countries they effectively set up to later knock down.