The Eurozone Crisis Thread

It's easy to be generous with someone else's money...

great phrase bro, is it one of your own? You're clearly an original thinker.

The whole point is that austerity has depressed the Greek economy to the extent that it's made it less, not more, likely to be able to pay it's debts. Even allowing for the incompetent nature of successive Greek governments and the barely functional nature of its tax system.

If we're going to throw around accusations of childish behaviour, the response of the EU/ECB to this point, which has been made by multiple economists admittedly less knowledgeable than the guy responsible for 'Keep the Meme Alive: Pippa's Arse', has been to stick their fingers in their ears and go 'ner ner ner ner ner not listening'.

You would think the EU would be more alert to the geopolitical dangers of creating a failed state with rapidly growing fascist parties in a region of massive historical instability as well, but apparently not.

Perhaps if Greece's creditors weren't prepared to accept the risk of default / debt cancellation, then they shouldn't have been charging interest in the first place.

It's also worth emphasising that it is those same creditors, in the form of the Troika, that are responsible for enforcing the punitive settlement on Greece. Under most circumstances bad debts get written off, and creditors have to bear the moral risk of lending that money. I agree that analogy with household debt is often unhelpful, but one parallel holds good: no creditor can force a bankrupt household to come up with money it doesn't have, just as most formally bankrupt states throughout history (including Germany in both the 1920s and 1950s) tend to have bankrupting debts written off or restructured, something that the Troika seem totally unwilling to countenance. This course of action will have the counter-productive effect Matt writes about above, a disaster for the Eurozone and Europe more generally.

But, y'know, "maybe Greece shouldn't have run up such a big credit card bill!!!"

I enjoy a crap analogy as much as the next guy but in if I don't pay my bills, my kids gets evicted too to what is eviction analogous?

won't someone please think of the imaginary children???

I don't know much about the Belgian welfare state but I'm assuming the result of said eviction wouldn't be the kids starving on the streets?

some low shots here - StanM partly right, some of the post-game victory speeches after the referendum were just stupid - why would anyone think that creditors would agree to a third bailout and debt cancellation without any type of commitment from Greece? Don't see what's childish about pointing out that Greece put itself in this mess (and we're not talking just about a small corrupt governing clique, whole country has been living on absurdly easy credit for the last 15 years and dug its own grave with the Olympics - doesnt mean they have to be punished for all of eternity but still some of the OXI camp seems to think that this whole mess just came out of the blue).
Agree with Matt tho that it's still very questionable, even from the creditors pov, that extra austerity would bring recovery and ultimately get them their money back (see Piketty's analysis for instance) but just dismissing the creditors as evil capitalists with an austerity fetish does not help.

it doesn't help but it's true

BTW, of course I'm not blind for the emo arguments abput the suffering citizens. But if I don't pay my bills, my kids gets evicted too.

― StanM, Tuesday, 14 July 2015 Bookmark Flag Post Permalink

The Tories say this kind of stuff all the time.

xxp how is it "the whole country"'s fault that Greece was offered easy credit by irresponsible creditors? Were ordinary Greeks expected to demand higher interest rates on the basis that they could foresee this kind of disaster? And the Olympics might have been a folly, but that can hardly explain the situation that Greece finds itself in now.

eurozone only thread badly wanted

aux armes etcetera

http://marianamazzucato.com/2015/07/13/greece-and-the-eu-a-macro-and-micro-mess-up/

^ this is a good piece - shows how Germany et al. were more than happy to get Greece to accumulate debt and now are willing to keep them in a depressed state for as long it takes. Whatever it means.

zone policing

I agree that analogy with household debt is often unhelpful, but one parallel holds good: no creditor can force a bankrupt household to come up with money it doesn't have,

Yeah. There used to be a way, or at least a more punitive measure, which was debtor's prisons- obviously a great way to ensure payment of debts, that, sticking people in chokey.

Not sure if any of those making household credit card analogies would look back on that system fondly... but idk, maybe they would. Maybe that's going to be the next big thing for the right. Anyway, conditions imposed on Greece more analagous to being locked in Marshalsea with Chalres Dickens' dad, than any normal kind of bankruptcy proceedings.

wdn’t frame it in quite those terms but baaderonix otm about certain one-sidedness of perspective here

this was long time coming & (though i’m pretty ignorant in these matters) hard to see any realistic (i.e. irl, in this actual world as currently constituted, economically & politically feasible solution that wd not involve any austerity)

nyt article linked by mordy a while back instructive that it’s not just troika but poorer countries’ circumstances & citizens constraining hands here

of course ordinary greek citizens not to blame; it’s political & economic ‘elites’ (all around) that fubar
but (ideal utopian morality aside) assigning black hats white hats without grey in this scenario seems tad over-simplistic too

happy to keep morality out of politics, but let's not pretend that "realism" = "neutral acceptance of immutable laws of nature"

no reference to natural laws here:

in this actual world as currently constituted, economically & politically feasible

Sure the OXI camp could have tried to change the game but then they shouldn't have been clamouring to stay in the euro - orthodox monetary policy is what made it impossible for Greece to do anything but balance deficits and at least appear to pay off debts.

xp let's not pretend that "realism" = "neutral acceptance of immutable laws of nature"

agreed

just looking at limited local (in historical terms) state of affairs, with certain (current) systemic constraints & conditions
and limited range of viable choices of action (with attendant consequences) for political actors (constrained in multiple ways on multiple levels)

economically & politically feasible solution

there's still not any clear agreement on what the true problem is, the conflict is over diagnosis

in this actual world as currently constituted, economically & politically feasible

time for a change.

xp you're right-- there's the rub; made me realize i'm being over-simplistic too
conflict over diagnosis is why greece debate so intractable

the problem of stressing what's permissible under the rules of the existing economic setup is it looks a lot like you're cheering for it

It's the classic Thatcherite rhetorical construction: There is no alternative

Sure the OXI camp could have tried to change the game but then they shouldn't have been clamouring to stay in the euro

From what I can tell there is a lot that is wrong with Greece before they joined the Euro, and by doing that and closing integrating with the rest of Europe many thought things would change for the better?

Looks like it was only until this weekend's events that the Greeks thought they could negotiate and win sizeable concessions -- again that only applies to some in Syriza, not the hardline commies who form some of it -- and carry on with something that was more sustainable.

I don't think it was a having your cake and eating it position.

you know v well from UK politics thread that anyone can grow tired of the perpetual protestation of "if our side were in ....." and "if this enormous actual social barrier didn't exist" and "if the evil right wing majority/evil powerful right wing minority/evil right wing Germans didn't force this of do that or"

which is all well and good if the usual set didn't react with the usual frustrated vituperation upon the posited evil right wing ilxors when that latter group of imperfect souls posited their own doubts about the fantasy solutions proferred something something piketty

matts hypocrisy in accusations of flimsy bases for condescension may need underlining and yknow it may not.

I've wondered to what extent UK ilxor political Guardian internet snark is borne out of the same frustration of always seemingly being an idealistic opposition: going back as far as most of us have had a voting interest, maybe- within new labour, against new labour's actions, now with a Tory govt and maybe more comfortable in spinning strategies (well, tbf, just railing against strategies maybe) and awaiting idk

what are ye awaiting exactly? taking what shape, coming from where and led by who?

it'd be an interesting question to have answered and its admittedly as easy for me to pose as it is for any of yis to choose instead to react as if someone on yr internet comfort room intellectual forum pissed on yr political chips

ps yet again umpteenth time I vote harder left than u, don't it kill u but

xp this isnt aimed at anyone rly well maybe conrad and bananaman and matt the rest of ye are yknow grand sorry I rise ye as much as I do. not sorry enough not to do it

as an apology that may need a polish in fairness. first paragraph for nv

are you having a breakdown

xps the problem of stressing what's permissible under the rules of the existing economic setup is it looks a lot like you're cheering for it

true (not cheering btw; but not throwing molotov cocktails atm either)
this concern re what/who it might look like we're cheering can also distort/obstruct conversation/ thought

like i said, pretty ignorant in these matters & don’t know what’s possible & not possible here
true, sometimes crisis offers opportunity to affect/ alter rules of the game
just watching things play out, clueless here

xp you said it, mate. you said it.

deems :)

Deems the problem is that you think everyone here is living in a fantasy world when actually I acknowledged the problem you mentioned as recently as three days ago. You've got to allow people time for raging because really what is more pointless than going "well it's just an intractable problem, what can you do, sorry Greece!"

I reserve the right to pour scorn on anyone still using a government=household budget analogy especially given the shit we're going through over here right now.

OK I will cede the second point as an interim rapprochement

cool i broke darraghmac's brain

what are ye awaiting exactly? taking what shape, coming from where and led by who?

ppl in general not very forthcoming with this cf. desolate uk constitutional reform thread I started

xp Anyway,

the problem of stressing what's permissible under the rules of the existing economic setup is it looks a lot like you're cheering for it

this. In fairness I should probably try to get less irritated by this and stop imagining the ppl stressing the limits of the possible doing so with big grin on their faces burning 50 euro notes while skypeing unemployed Greeks.

You've got to allow people time for raging because really what is more pointless than going "well it's just an intractable problem, what can you do, sorry Greece!"

Could do without the subtle hints of gloating too tbh. LOL @ 'UK ILXOR Guardian reading contingent' generalizations.

xp

but maybe there should also be a moratorium on describing the few politicians trying to push back somewhat against aggressive neoliberalism and unfettered rule by the rich as childish, or unserious, or sixth form or what have you.

^ realise that's a loaded description, so substitute your own if applicable i guess

multiple economists admittedly less knowledgeable than the guy responsible for 'Keep the Meme Alive: Pippa's Arse',

This was a zing and a half from Matt DC.

xp fair enough bb

I'll try to do better but tbh I will have to talk to my ppl before retracting the guardian one tho tom

maybe I'm overstressing it itt or maybe not enough, but again to contextualise it, the chastening of syriza has an element of serious local benefit over here wrt the decreasingly credible spectre of sinn féin. if that has over-coloured my POV on the impact of a strictly-applied set of reforms on greece to anyone's distress then I apologise.

that said, I do find the level of doom prophesying regarding the package curious- I partook in this and then some in the Irish politics thread of 2008 but pushing out repayments while opening lines of credit does seem to have worked reasonably well here (notwithstanding underlying differences in national asset/income infrastructures obv).

discussions of haircuts vs austerity seems to me to be a much smaller debate in this context than the type of systemic change being pushed almost everywhere, is there not a large case here for an element of politically-motivated reporting brinkmanship that maybe exacerbates everything (down to and including humble message board debate)

imho greece should have to pay their debt but at the same time the european union should acknowledge not only that AUSTERITY HASN'T WORKED but they should justify what else is to be gained by persisting with a scheme that HASN'T WORKED and MADE THINGS WORSE beyond 'punishing greece' / 'showing italy / portugal / spain that they won't get better debt relief conditions, so don't even think about'. if the EU can't do that then fuck them; this condition that greece hold a firesale of national assets to raise $50b seems like blatant disaster capitalism, and that is asking for trouble big time

Irish debt is supposed to be repaid via growth, greek via asset-stripping

to contextualise it, the chastening of syriza has an element of serious local benefit over here wrt the decreasingly credible spectre of sinn féin.

realpolitik talk

you said it mate

is arguing against prevailing concepts instead of simply capitulating brinkmanship or is arguing for simple capitulation to prevailing concepts brinkmanship or is it the combination that makes for brinkmanship?

i said it mate

a possible solution is moving toward a union more federal like the US has, with national taxes becoming something like state taxes, and 'continental taxes' something a strong IRS type central institution (the ERS?) can collect and redistribute where needed, a la how rich american states like New York and California prop up poorer greece-like states like Alabama and Tennessee. i'm not sure if that's something europeans want or could even effect if so, given the thousands of years of history of each member state (and all the acrimony and bad blood over the millennia)

it's a good question xp. I suppose if you allow for degrees of constructiveness in arguing against and degrees of negotiation in capitulation to it might be a better question or might address the brinkmanship aspect.