Meanwhile in the Eurozone

[Sheilbh]

Well, ultimately it is not the loaner`s fault if the loan-taker blows the money on hookers and booze.

I disagree, it goes both ways. If you don't do your due diligence and lend someone money that they can't afford you deserve to lose it.

And in my opinion, there is no good system which can keep bad setups like Greece or Spain afloat, because if it keeps them afloat it cannot be good.

All sorts of countries can stay afloat. There's nothing good or bad about it. I mean Greece used to have permanent double-digit interest rates and absurdly high inflation. It wasn't a good system, but they then joined the Euro without any significant reform.

[Sheilbh]

I wish SYRIZA would win an election.

They're currently neck and neck with ND. Both are polling between 28-30%. Whichever won would then get an extra 50 seats in Parliament. Then Golden Dawn at around 9%, PASOK at 7%, the Communists (they're old school communists too) at around 6.5-7% and the anti-austerity right at around 5%.

cool, so we can end the insane farming subsidies then, right?

If only

Edit: What's really amazing is that according to some polls it looks like Fianna Fail might win the next election. Truly the black swan of Irish politics

Them and Fine Gael are both in the mid-20s, Sinn Fein's polling as high as 20% () and even the ULA (Marxists) are looking like winning a few seats.

[Valmy]

Although that article has so much in it to make you love French - protest, a tax revolt taking inspiration from the 17th century

Aux barricades!

Politics seems to radicalizing everywhere in the Western World these days...well except Germany.

[Admiral Yi]

Greek public spending was below the EU average for decades.

Do you mean in absolute terms or as a % of GDP?

Also the EU's policies for countries in crisis have worked in the Baltic. But the IMF said they thought there were four criteria for them to work: a small, flexible, open economy with a liberal labour market. That doesn't cover Greece, Spain, Portugal or Italy. Given that I'm not sure it's the right policy.

Flexibility, openness, and a liberal labor market are choices.

[alfred russel]

This is kind of scary from Greece:

I have a personal theory.

A decent sized portion of western societies are bitter, disaffected, and excluded from the mainstream--I'm talking about socially as much as economically. Lets say 30-40%. When times are really good, or a strong us vs. them cause is out there (lets bomb people!), they may rally to mainstream parteis. But when times are bad, and your major parties look weak, they are prone to extremism.

I strongly doubt most Greeks will ever go for Golden Dawn, just like I strongly doubt most French will go for Le Pen. I just don't see the majority of Greeks openly accepting the racism, xenophobia, and thuggery. These groups have a ceiling that I don't think they can break through, and that ceiling is a good bit under 50%.

[Sheilbh]

Do you mean in absolute terms or as a % of GDP?

% of GDP. In absolute terms Greece is down there with Cyprus and Malta given that their economy is 2% of the EU total.

Flexibility, openness, and a liberal labor market are choices.

Yep, but the IMF meant you already have those in place. I think they did a study that showed it takes about 4-5 years for the benefits of those sort of structural reforms to have an effect - look at Germany. But also if the benefit is basically that your economy can quickly adjust then that needs to be ready before a sledgehammer's taken to it. Otherwise you'll get the economic cost of the recession but the ability to adjust is coming in piecemeal.

But once their in place you can have this sort of adjustment as the Baltic states did. I think that's why Ireland - despite their many problems with Europe at the minute - are probably doing the best out of them all.

I strongly doubt most Greeks will ever go for Golden Dawn, just like I strongly doubt most French will go for Le Pen. I just don't see the majority of Greeks openly accepting the racism, xenophobia, and thuggery. These groups have a ceiling that I don't think they can break through, and that ceiling is a good bit under 50%.

I agree. The problem I think is that the extremes' ability to capture power is increased with their vote, even if it's short of 50%. It can further damage the political mainstream by discrediting them as they form cordons sanitaires, look at Flanders/Belgium in general, which feeds the victim complex the extremes tend to rely on. In addition lots of European countries have systems to top-up the winning party, in an attempt to make solid governments possible with PR. So in Greece I think you need around 35% to win a total majority. In Italy the largest party receives enough extra seats to take them to 50% of seats in Parliament, so Beppe Grillo only needs to improve his result from the last election by a few percentage points and there's a 5 Star government.

And obviously the extreme parties can cause lots of trouble even without ever winning an election. I find the political violence in Greece (where, to be fair, there's a history of political violence) what worries me most. Golden Dawn have apparently been doing it for ages but because they mainly targeted immigrants no-one cared. But their murders with left-wing random reprisal death squads is scary. That's the sort of atmosphere that can radicalise an entire country.

[Sheilbh]

Aux barricades!

Politics seems to radicalizing everywhere in the Western World these days...well except Germany.

I don't know if it's radicalising or just that the old centre can't hold. Part of me thinks that the perception is that the old centre has failed, maybe in the same way as, by the 70s, the old model of democratic politics and union bosses had failed. I always thought ideology was becoming less important because we were largely moving to a more managerial politics, but I think that was wrong.

I think this is in part why populism is working a bit more now and why we kind of need it.

[Zanza]

Politics seems to radicalizing everywhere in the Western World these days...well except Germany.

We had an anti-Euro party almost making it into parliament in the last election. They are probably more like the UKIP then the FN though.

[Duque de Bragança]

Yes. Let's see how that develops.

It's interesting. I was listening to Nigel Farage on this rejecting any deal with the FN. His view was that the party itself is still deeply unpleasant and too much of it is unreformed, but he likes Marine Le Pen quite a lot. I wonder how the perception is in France. They're polling between 25-30% which is more than enough to get to the run-off round and I wonder how many people would vote for, say, Hollande against Le Pen in the second round? Is she perceived to have done enough?

That's Hollande's dream scenario. Only way he would win, still with a lesser margin than Chirac's, African-style majority. This applies even more to any centrist or conservative candidate.

[viper37]

Yes. Let's see how that develops.

It's interesting. I was listening to Nigel Farage on this rejecting any deal with the FN. His view was that the party itself is still deeply unpleasant and too much of it is unreformed, but he likes Marine Le Pen quite a lot. I wonder how the perception is in France. They're polling between 25-30% which is more than enough to get to the run-off round and I wonder how many people would vote for, say, Hollande against Le Pen in the second round? Is she perceived to have done enough?

Against Hollande?  The last time this scenario happenned, a lot of people pinched their nose and voted Chirac.  But with Holland, I'm guessing a lot of people will pinch their nose vote and vote Marine Le Pen.  How much?  Enough to reach close to 30%, not enough to have an FN president, and by far.

[Admiral Yi]

Do you mean in absolute terms or as a % of GDP?

% of GDP. In absolute terms Greece is down there with Cyprus and Malta given that their economy is 2% of the EU total.

Fair enough.  But keep in mind the EU is as a whole is no hotbed of cutthroat Anglo Saxon capitalism.  For example I believe France has the highest % of GDP in the public sector in the world.

Yep, but the IMF meant you already have those in place. I think they did a study that showed it takes about 4-5 years for the benefits of those sort of structural reforms to have an effect - look at Germany. But also if the benefit is basically that your economy can quickly adjust then that needs to be ready before a sledgehammer's taken to it. Otherwise you'll get the economic cost of the recession but the ability to adjust is coming in piecemeal.

Are you sure you're paraphrasing that correctly?  What I would expect to see is that the political process takes about that long to free up its labor market after a country goes begging to the IMF, rather than instantaneous adoption of all recommendations and a 4 year lag for them to take effect.

[Sheilbh]

Fair enough.  But keep in mind the EU is as a whole is no hotbed of cutthroat Anglo Saxon capitalism.  For example I believe France has the highest % of GDP in the public sector in the world.

True enough.  I think France is 60% of GDP (or more!) and the EU average is around 50%. Greece wasn't quite as low as most of the new EU members (query for Tamas, according to these statistics Hungary is the only post-communist country that didn't seem to go through any version of shock therapy reforms, why?) or the Anglo-Saxons/Irish.

Are you sure you're paraphrasing that correctly?  What I would expect to see is that the political process takes about that long to free up its labor market after a country goes begging to the IMF, rather than instantaneous adoption of all recommendations and a 4 year lag for them to take effect.

Define correctly It was the OECD not the IMF.

Basically the study looked at structural reforms in various countries over the past 30 years from when they're passed. So it's not about political process but effects after they have been adopted. It takes several years for there to be benefits. For example Schroeder's and Thatcher's reforms both took several years to see the benefit. It seems common sense, it's normally a reason that politicians are so wary to pass reforms. Very often they won't see the benefits, but their successor will.

In the context of tight monetary policy (still) and tighter fiscal policy, from an illiberal base structural reforms could take a very, very long time to work.

[Admiral Yi]

Your first fact is explained in my mind by the absence in Greece (AFAIK) of large SOEs.  Greece doesn't have any state-owned car makers, electronics firms, ship builders, or aerospace companies to my knowledge.  That's not quite the same thing as saying Greece is and has been virtuous about its public sector.  It's eminently possible to have none of those and still have a bloated, overpaid civil service.

As to your second, I would be interested to see how the OECD defined "benefit."  If they defined it as an increase in wages from before the reforms, then 4-5 years is not an unreasonable lag.  If they define it more broadly, such as an increase in competitiveness, or a return to profitability, then 4-5 years seems awfully long to me.

[Capetan Mihali]

(AFAIK)

What party are they?

[Admiral Yi]

as far as I know