ECB and Inflation

[Monoriu]

Anyway, going back to bashing Crazy Ivan - I was viewing the debt to GDP ratio for different countries, and it appears in Europe Belgium has one of the highest.

It's:

Greece: 177%
Italy: 132%
Portugal: 130%
Ireland: 110%
Cyprus 107%

and then Belgium: 106%

And it has actually increased from the previous year.

So it's a bit of the pot calling the kettle black.

Source: http://www.tradingeconomics.com/country-list/government-debt-to-gdp

106% is obviously a lot lower than 177%, so I am not sure what your point is.

Edit: besides, even if Belgium's debt level is just as bad, doesn't stop anybody from pointing out what's wrong with Greece.

[Syt]

Debt vs. GDP is an indicator, but it's useless without context, e.g. a country's ability to refinance its debt (i.e. paying off existing loans/interest and taking on new ones).

[Monoriu]

The table lists Hong Kong as having a debt to GDP ratio of 30-something per cent.  It is a little odd because the HK government is a creditor and has a large cash reserve that is sufficient for like two years of expenditure.  It issues debt mainly to provide a benchmark for the bond market.  There are also retail i-bonds that are issued not because they need the money, but as an excuse to give some pork to us residents. 

The point that I want to make is, not all debt is equal. 

[Syt]

Uganda, Moldova, Congo, and Macedonia must be in the clear, for their debt rate is under 40%.

[Admiral Yi]

Uganda, Moldova, Congo, and Macedonia must be in the clear, for their debt rate is under 40%.

40% must be some kind of magic number for shithole debtors.  Venezuela's around 40 well IIRC.

[Martinus]

Shitholes like Norway, Finland or Denmark.

[Martinus]

There is one more aspect to the Greek crisis that is rarely spoken of - the first bailout essentially socialised the losses while privatised the profits for German, French etc. banks, by having tax payer institutions (such as governments etc.) take over the bad debt from private banks. If German voters should be mad at anyone, it shouldn't be the Greeks, but their government complicit with bailing out German banksters.

[Monoriu]

There is one more aspect to the Greek crisis that is rarely spoken of - the first bailout essentially socialised the losses while privatised the profits for German, French etc. banks, by having tax payer institutions (such as governments etc.) take over the bad debt from private banks. If German voters should be mad at anyone, it shouldn't be the Greeks, but their government complicit with bailing out German banksters.

Say, there is a great blunder.  Both A and B are responsible.  When people point out that B's previous and current actions are causing the problem, it doesn't help their case to say "hey, A is also responsible."  I don't think a lot of people are saying that the banks are saints.  But that doesn't excuse Greece from the whole situation.  There is no doubt that Greece is causing a lot of trouble for themselves and for others.  Rather than pointing fingers at the banks, they should fix their own problems first.  The banks should be dealt with separately.

[Martinus]

Fuck, I wrote a long post summarising an essey by an economist (unfortunately I read it in Polish only) concerning the Greek situation, which I thought was very insightful, and then got the "connection lost" message when I tried to post it.

Fuck this fucking board's servers.

[Zanza]

There is one more aspect to the Greek crisis that is rarely spoken of - the first bailout essentially socialised the losses while privatised the profits for German, French etc. banks, by having tax payer institutions (such as governments etc.) take over the bad debt from private banks. If German voters should be mad at anyone, it shouldn't be the Greeks, but their government complicit with bailing out German banksters.

"That is rarely spoken of"? Really? You present this as if it was a new talking point when it was talked about ad infinitum when the actual bailout and haircut happened. By the way, the by far biggest exposure to Greek government debt was always Greek banks and pension funds. Those were bailed out as well.

[crazy canuck]

There is one more aspect to the Greek crisis that is rarely spoken of - the first bailout essentially socialised the losses while privatised the profits for German, French etc. banks, by having tax payer institutions (such as governments etc.) take over the bad debt from private banks. If German voters should be mad at anyone, it shouldn't be the Greeks, but their government complicit with bailing out German banksters.

"That is rarely spoken of"? Really? You present this as if it was a new talking point when it was talked about ad infinitum when the actual bailout and haircut happened. By the way, the by far biggest exposure to Greek government debt was always Greek banks and pension funds. Those were bailed out as well.

[Admiral Yi]

It would be interesting to take a look at the discussion here in the runup to the bailout.  My recollection was that the line being peddled at the time by the Greek supporters then was that Germany et al had an obligation to bailout Greece, out of solidarity and because of its responsibility to maintain the eurozone.  No one seems to remember that Germany had to be dragged kicking and screaming into this mess.  Now of course we find that the Greek's were pressured to accept a bailout against their wishes and against their interests.

Which of course is consistent with the observation that it is much more fun to spend borrowed money than it is to repay it.  And the observation that lenders are evil when they don't want to lend and they are evil again when they ask for repayment.

[crazy canuck]

It would be interesting to take a look at the discussion here in the runup to the bailout.  My recollection was that the line being peddled at the time by the Greek supporters then was that Germany et al had an obligation to bailout Greece, out of solidarity and because of its responsibility to maintain the eurozone.  No one seems to remember that Germany had to be dragged kicking and screaming into this mess.  Now of course we find that the Greek's were pressured to accept a bailout against their wishes and against their interests.

Which of course is consistent with the observation that it is much more fun to spend borrowed money than it is to repay it.  And the observation that lenders are evil when they don't want to lend and they are evil again when they ask for repayment.

I distinctly recall Minsky being critical then of how the bail out was structured.  I don't see any inconsistency in his position now.

As for me, I just enjoy following the discussion between you and Minsky

[Syt]

http://www.theguardian.com/world/2015/aug/20/greek-bailout-alexis-tsipras-call-snap-elections

Greek bailout: Alexis Tsipras to 'step down and call snap elections'

Prime minister set to make imminent announcement, with 20 September predicted as most likely date for a poll

The Greek prime minister, Alexis Tsipras, has decided to step down and call snap elections for 20 September, government officials said.

As the debt-crippled country received the first tranche of its new €86bn (£61bn) bailout, Tsipras was set to make the formal announcement later on Thursday, government sources told Reuters..

Once he submits his resignation the prime minister would be replaced by the president of Greece's supreme court, Vassiliki Thanou-Christophilou – a vocal bailout opponent – who would oversee the elections as the head of a transitional government.

Tsipras won parliamentary backing for the tough bailout programme last week by a comfortable margin despite a large-scale rebellion among members of his ruling leftwing Syriza party, nearly one-third of whose 149 MPs either voted against the deal or abstained. Syriza governs in a coalition with the rightwing, anti-austerity party Independent Greeks (Anel).

The revolt by hardliners angry at what they view as a betrayal of the party's pledge to fight austerity left Tsipras short of the 120 votes he would need – two-fifths of the 300-seat assembly – to survive a censure motion and he was widely expected to call a confidence vote this week or next.

He has now decided to skip that step, deciding instead to go straight to the country in an attempt to silence rebels and shore up public support for the draconian three-year bailout programme, which entails a radical overhaul of the Greek economy including further tax hikes, spending cuts and major reforms of health, welfare, pensions and taxation.

Tsipras appears to have calculated that it was better to call the elections early, before the effects of the new bailout measures – including further pension cuts, VAT increases and a "solidarity" tax on incomes – started to make themselves felt.

Some analysts had suggested he might wait until early October, by which time Greece's creditors would have carried out their first review of the country's progress in meeting the bailout conditions and perhaps come to a decision about debt relief – potentially a major electoral asset for the prime minister.

Under Greece's complex constitutional laws, President Prokopis Pavlopoulos cannot immediately call an election if Tsipras resigns, but must first consult the other major parties to see if they could form a government – a near impossibility given the current parliamentary arithmetic.

At the end of a bruising seven months of negotiations with Greece's international creditors, the prime minister eventually signed up to a deal that many in his party view as a U-turn on the anti-austerity platform that swept it to power in elections last January.

Tsipras has insisted that accepting creditor demands for further tough reforms was the only way to ensure his country remains in the eurozone, which is a key demand among the electorate according to opinion polls.

Syriza is now thought likely to formally split. The leader of its dissident Left Platform, the former energy minister Panagiotis Lafazanis, announced last week he intended to form a new anti-bailout movement, accusing the government of capitulating to the "dictatorship of the eurozone".

The prime minister's closest aides had said on Thursday that the divisions within Syriza had to be dealt with one way or another. The energy minister, Panos Skourletis, told state broadcaster ERT: "The political landscape must clear up. We need to know whether the government has or does not have a majority."

The party is now thought likely to call an extraordinary congress in September to resolve its internal differences.

Recent opinion polls have put support for Syriza at around 33-34%, making it by far the country's most popular party – but not popular enough to govern without a coalition partner. No polls have been published since then, but Syriza insiders remain optimistic.

Dimitris Papadimoulis, a Syriza MEP, told Mega TV: "These elections, whenever they are announced by the government, will provide a stable governing solution. My feeling is that Syriza will have an absolute majority."

The political uncertainty was taking its toll on markets, with the Athens Stock Exchange down 2.8% in afternoon trading.

Analyst Evangelos Sioutis, who is the head of equities at Guardian Trust Securities, said: "The Greek stock market is coming into a new circle of uncertainty while we are waiting for new elections to be announced. For the stock markets, it is a factor of uncertainty."