The Eurozone Crisis Thread

Lol doesn't like a quarter of their arms spending go straight to Germany?

I don't know how much they can practically do. Tonnage tax is one thing that could be addressed but the internationalisation of both shipping and Greek money more generally makes going after people with a wealth tax hard. Most extreme wealth, as far as i can tell, isn't tied to land value - which can be taxed fairly easily, it's complex assets that can be moved off to Cyprus, Malta, etc. Most "Greek" shipping companies aren't registered in Greece - the fleets are tied to a P.O box in Liberia, etc.

The wealth tax that was introduced, Enfia, disproportionately hit low and middle-income families who had a bit of farming land left to them, and so on.

Aside from the practical elements, there's an underlying danger that efforts to really crack down on the relatively wealthy could have unintended political consequences. The far-right isn't getting its money from thin air and "fighting a war on two fronts" might not be far from the truth.

yeah, telling SYRIZA they should be taxing shipping magnates more is a bit 'don't piss on me and tell me it's raining'. Like as if the EU and all other institutions of global economic governance weren't ferociously committed to making transnational capital flows as smooth and easy as possible.

anyway, stoked 4 the thinkpieces

Didn't the counter-offer from Syriza involve more taxes on the rich to offset austerity a bit, and wasn't that shot down by the trojka?

Yes, there was an understanding that taxes would be raised to some extent and, probably more crucially, enforcement would be better.

I'm not sure if the Troika gave a breakdown of why it was rejected but most of the commentary has been that enforcing higher taxes would lead to more capital flight and revenue targets via taxation were too ambitious to be realistic, so the only reliable way to pay the interest would be through a raid on pensions and vasts amounts of privatisation (selling Pireaus, etc). I've seen quite a few pieces that have argued taxes should be lowered to encourage more people to pay them, which is optimistic.

I had nice Greek food for lunch in Berlin today fwiw

enjoy it while you still can!

RIP

there'll still be Bulgarian feta

translated interview w/ piketty:
https://medium.com/@gavinschalliol/thomas-piketty-germany-has-never-repaid-7b5e7add6fff

oh shit i just noticed he took down the translation. bummer - original here:
http://www.zeit.de/2015/26/thomas-piketty-schulden-griechenland/komplettansicht

Piketty: When I hear the Germans now say that they maintain a very moral dealing with debt and firmly believe that debts must be repaid, then I think: That's a big joke! Germany is the country that has never paid its debts.

They won't like that... from a Frenchman.

yeah was gonna post that but then the translation disappeared

It seems laughable that European countries coudl ever work together on anything other than techno music

So basically we need a techno "We Are the World."

But not in German.

https://web.archive.org/web/20150706021012/https://medium.com/@gavinschalliol/thomas-piketty-germany-has-never-repaid-7b5e7add6fff

a bunch of zingers in there:

ZEIT: Many Germans believe that the Greeks still have not recognized their mistakes and want to continue their free-spending ways.

Piketty: If we had told you Germans in the 1950s that you have not properly recognized your failures, you would still be repaying your debts. Luckily, we were more intelligent than that.

Damn! That Piketty interview is hard hitting stuff. Not only is Piketty right, but he is so obviously right it made me wince. Thanks.

So basically we need a techno "We Are the World."

Wow, there are a lot of techno versions of Ode To Joy... http://www.youtube.com/results?search_query=techno+ode+to+joy

varoufakis was hot

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

he still is!

"In his home country, a new word was coined - "Varoufitses" - to describe women who idolise Mr Varoufakis."

he looks a bit like Paulo Di Canio

he is a horrible writer

Paoulo?

yeah that fucker as well, but you have also spelt it wrong!

FU

picketty is right. fuck germany

http://www.newstatesman.com/politics/2015/07/Slavoj-Zizek-greece-chance-europe-awaken

Yeah Piketty made my change my stance on this - basically arguing people to see the big picture here. It'll take a hell of a politician to take the high road on this (cf. his quote on Kohl) and I'm not sure we've got one of those in the current crop.

i mean greece has been acting stupid for years, don't get me wrong. and the eurozone should probably tighten their commitment to unification and have an inter-nation tax collection agency so crazy greeks pay their taxes. but seriously germany, suck it up

I think there's a good chapter on debt history in Pikkety's book. Read it recently, but this goes to show how thorough. It's a very good book, though.

euclid tsakalatos = best name ever

http://nymag.com/daily/intelligencer/2015/07/greece-comes-to-emergency-summit-empty-handed.html

boom tsakalatos

eurozone just dropped the hammer

I did a higher level course in economics but I have to admit that ultimately I do not have a clue what's going on. Even to the point that I'm like "what is this debt?" Or even "what is money any more?" I mean I love that Picketty interview because it's fearless, I want to believe. But wtf is going on? I feel so stupid when I read about it.

good op-ed from a Greek friend of mine:

http://www.euractiv.com/sections/eu-priorities-2020/search-vision-europe-316063

so the chinese stock market crashed today. i'm sure these are isolated incidents

Or even "what is money any more?"

srsly

China has its own economic issues that don't hinge on Greek debt

re "what is money any more?" i feel like that's the least confusing bit about all of this. Greece doesn't have a sovereign currency so they can't do any of the things a country might normally do to restart their economy.

no one said anything about hinging. but a stable european market helps not hurts the chinese market

from what i understand european markets have been relatively stable throughout this ordeal

nah i think mordy's right, china just had a big bubble

not saying the bubble popped because germany might be pushing greece out of the european union. (if they do, that might be a real ordeal.) the specter of european chaos doesn't help, is what i'm saying -- which is one of the reasons europe united in the first place, if i'm remembering correctly

World markets were hit on Wednesday by a meltdown in Chinese markets, a slump in commodities and questions over whether Europe could save Greece.

European trading got off to a steady start, even though stocks had plunged 6.75 percent in China .CSI300, where the country's regulator warned investors were being gripped by "panic sentiment".

That put all of Asia into a tailspin. Hong Kong .HSI dropped 8 percent, and Japan's Nikkei .N225 and stocks in Australia .AXJO took heavy blows, leaving investors only the yen JPY= and safe-haven government bonds for refuge. The yen rose to a six-week high against the dollar.

i don't get that Greece is enough of a player in the world economy that it really matters - the concerns are more things like whether a Grexit will lead to a idk Spexit or Itexit or whatever, then actual ripples from Greece itself (and I wonder if a lot of that risk has already been built into the market - how much the EU will really suffer at this pt if the Grexit happens)

Burningmoney.gif

from NYT:

Europe is in “limbo and despair” as it awaits the next episode in the Greek crisis, said Carsten Brzeski, an economist in Frankfurt with ING-DiBa.

“It’s like the movie ‘Groundhog Day,’ ” Mr. Brzeski said. “We wake up from yet another Eurogroup emergency meeting on Greece, and the world still looks exactly the same.”

“Our base case is still a ‘Eurofudge,’ ” Mr. Brzeski said, with a slightly better than 50 percent probability that “they’ll find some kind of a deal.”

I love how "Eurofudge" is an actual term people throw around