Europe's Populist Left

[Martinus]

Apparently, it's "chreos". Which definitely sounds nicer than "Schuld" but then this is probably true for every single word in Greek compared to German. And is also apparently an expensive car brand. Make of it what you will.

Incidentally, the word used in Greek version of the Lord's prayer, "and forgive us our sins/debts/fault" is entirely different so none of these silly German guilttripping there.

I wish we had a Greek poster. Wasn't there one on Paradox?

[Martinus]

The character for debt in Chinese is written as a combination of two other characters - human, and responsibility.  So debt is one's responsibility.

The Polish word is "dlug" which has no direct correlation to any other word except perhaps "dlugi" which means "long". 

The words for "responsibility" ("odpowiedzialnosc"), "obligation" ("obowiazek"), and "guilt" ("wina") are different. That being said, the word used to mean "owe" is the same as "guilty". Guess we are this strange German-Slavic hybrid as with most things.

[Martinus]

I'll return to this thread tomorrow. But shit kicking off

From the twitter account of the ECB's head of comms it looks like they did not expect that to be the interpretation in the media

You mean this:

5 February 2015 Last updated at 04:07 GMT Share this pageEmail
Print Share this page

ShareFacebookTwitter.European Central Bank toughens its stance on Greece

The European Central Bank (ECB) has toughened its stance with Greece by restricting financing to the country's banks.

In a statement, the central bank said it would no longer accept Greek government bonds as collateral for lending money to commercial banks.

The move makes access to cash more expensive for Greece's banks.

The ECB said the suspension came as it could not assume a "successful" deal on Greece's €240bn (£179bn) bailout.

The newly-elected Greek government is in talks with international creditors over the terms of its bailout, which it thinks are too harsh.

The Greek finance ministry said the ECB's decision, which is due to come into effect on 11 February, would have "no adverse impact" on the country's financial industry.

It said the sector was "fully protected" with other options still available.

'Get a deal'

Banks can still access funding through the Emergency Liquidity Assistance (ELA) programme, run by Greece's central bank, and at a much higher cost to the banks.

According to the Greek newspaper Kathimerini, the interest rate is 1.55%, compared with 0.05% on regular ECB financing.

Earlier on Wednesday, Greek Finance Minister Yanis Varoufakis, met the ECB's president Mario Draghi to discuss the country's bailout.

Analysts said the ECB statement was a sign the meeting had not been a success.

"This is clearly the ECB signalling to the Greek government: You're going to have to talk to [international lenders] the troika and get a deal,'' Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics told the Associated Press.

"Otherwise, really bad things are going to happen.''

The euro fell sharply against the dollar on the news, dropping more than a cent to $1.1331.

Mr Varoufakis is due to meet his German counterpart, Wolfgang Schaeuble, on Thursday, one of the toughest critics of the new Greek government.

The Interplanetary Guild has spoken. The spice must flow. Greece has to submit or be destroyed. 

[celedhring]

I'm not aware of the Latin "debitum", from where the word is derived for most Latin languages and English, having any ulterior meaning besides owing something. But I may be wrong.

[Zanza]

Wouldn't that require Merkel's policies to be popular in Germany? 

Aren't they?

What is the popular sentiment in Germany on the subject, in your estimation?

These days, people probably don't care. A few years ago, the populist policy would have been Grexit.

[Sheilbh]

You mean this:

Yep. One interesting comment was from the Greek team. They can't work out who it's meant to be putting pressure on, Greece or Germany.

Edit: Also Greco-German Finance Ministers meet. They disagreed over whether they'd even agreed to disagree

[Zanza]

http://www.theguardian.com/commentisfree/2015/feb/05/germany-not-big-bad-boss-europe-economies

Germany isn't the big bad boss of Europe
The idea that the country has an iron grip over southern European economies is too often used as a convenient excuse for others not getting their house in order

For once, politicians in France, demonstrators in Spain and newspaper columnists in Britain all agree: Europe has become a German colony. German dominance, based on economic overachievement, means the rest of the continent now lives under the yoke of Teutonic austerity politics. In this view, Syriza's win in the Greek elections is less the product of decades of domestic political failure than a rebellious act of defiance against a sinister oppressor.

No wonder, then, that some commentators have tried to pre-emptively defend the new Greek government against the inevitable attack by Angela Merkel, the "most monstrous western European leader of this generation". The Telegraph's Charles Moore saw Syriza as the "logical, desperate response" to a situation that is "more like a colonial than a democratic one", and even the Guardian's Europe editor wrote that Syriza's win "underlines public rejection of the policies prescribed mainly if not exclusively by Berlin in recent years". It may sound more like Star Wars than political analysis, but the idea that Merkel is somehow controlling the leaders of the other 27 EU member states is now common currency.

[...]

It makes you wonder how German rule over Europe is actually supposed to work. Do the other European leaders have a black, red and gold-coloured telephone on their desks with a direct line to Merkel's office? Are they steered to a pro-austerity course via mind control? Because it certainly doesn't happen through the EU institutions. It has been shown again and again that the European parliament is a truly transnational institution [...]

In the council of ministers, where national interests naturally play a much bigger role, German delegates aren't calling the shots either. According to Jonathan Golub, a political scientist at the University of Reading, large member states like "France, Germany and Italy do particularly badly" in influencing the bargaining process in the council, whereas small states like Luxembourg and Austria punch above their weight.

Even at the highest level of European politics, Germany has not always been very successful in pushing through its agenda. Merkel has suffered defeat in key decisions during the euro crisis: in 2012, for example, she was forced to agree to the European Central Bank directly buying government bonds of crisis-hit states. This time, the constitutional court threw its weight behind the German government and challenged the legality of these so-called outright monetary transactions (OMT). It referred the case to the European court of justice, but this seems unlikely to be successful after one of the advocates general at the ECJ already declared the measure compatible with EU law.

To criticise the German-bashing bandwagon is not about painting the country as a victim. It's about whether you believe that lazy cliches distort rather than help us understand the real nature of the political crisis at the heart of Europe. Blaming an evil German empire can be a convenient excuse for democratically elected southern European governments who don't want to take the flak for unpopular decisions at home. It also deflects attention from other austerity hardliners such as Finland or the Netherlands. It suggests that there is an easy solution to the Greek sovereign debt crisis, when the reality is far more complex.

[The Minsky Moment]

http://www.theguardian.com/commentisfree/2015/feb/05/germany-not-big-bad-boss-europe-economies

It suggests that there is an easy solution to the Greek sovereign debt crisis, when the reality is far more complex.

But this is one of instances where a seemingly complex problem does have an easy solution:
Step 1: determine a payment stream (primary surplus) that is sustainable and macroeconomically feasible.
Step 2: restructure the existing obligations such that they require the payment of the stream in Step 1.

And guess what?  This is exactly what Syriza's finance minster is proposing.

[Admiral Yi]

It's certainly easy from Greece's point of view.

[The Minsky Moment]

It's certainly easy from Greece's point of view.

From whose point of view is that not easy?
There are virtually no non-official creditors left.  The size of the payment stream the institutional creditors receive is of no economic relevance.
The only difficulty is the domestic politics of the EU states.  That I agree is a big problem.

[Jacob]

Argument that the ECB move is not a big deal: https://medium.com/bull-market/so-what-did-ecb-just-do-to-greece-eb61322286fa

So the Governing Council have decided they can't now "assume a successful conclusion of the programme review." Who knows what they were assuming before? But it should be very clear now that this isn't about hard-and-fast rules. The Governing Council has explicitly made this decision based on their feelings and hunches about how negotiations are going.

At least, unlike in its previous "Fight Club" days, the ECB now admits that ELA is available and will step in to take the place of the regular Eurosystem lending that has been revoked. So there are no immediate implications for liquidity provision to the Greek banks. The ECB is flexing its muscles, letting everyone know that are very close to pulling liquidity from Greece but no funds have been withdrawn yet.

Simplifies Maters

On the positive side, this decision simplifies matters to their essence. As in Ireland and Cypus previously, whether the Greek banks can keep operating depends on the ECB's discretionary decision on whether to keep approving ELA. And, as with those previous cases, the ECB has decided what it wants in return for ELA and is determined to get its way.

This decision saves us weeks of more under-informed articles about "rules" and "waivers" and will help people understand what's going on: The ECB will pull funding from Greece's banks until, well, until they get whatever it is they want—most likely a sufficiently strong indication that substantive negotiations likely to succeed are underway. My current working assumption is that Syriza will meet that condition in the coming weeks and the banks will continue to receive ELA.

[Jacob]

Zanza, I agree that it's not about the "big bad Germans."

[Admiral Yi]

From whose point of view is that not easy?
There are virtually no non-official creditors left.  The size of the payment stream the institutional creditors receive is of no economic relevance.
The only difficulty is the domestic politics of the EU states.  That I agree is a big problem.

It's perhaps most difficult for the next fiscal cripple that needs a bailout.

It's somewhat difficult for the program countries that don't get the same sweet deal.

I think there are also legal issues with the ECB writing off loans.

[Zanza]

But this is one of instances where a seemingly complex problem does have an easy solution:
Step 1: determine a payment stream (primary surplus) that is sustainable and macroeconomically feasible.
Step 2: restructure the existing obligations such that they require the payment of the stream in Step 1.

And guess what?  This is exactly what Syriza's finance minster is proposing.

Yes. But this is not something that any German politician can affect at this time as the debt in question is to IMF, ECB or private investors. This is not about the debt held by other Eurozone governments. Which brings us back to the article and the misleading focus on Merkel.

EDIT: Actually, they pay about 1% of GDP in interest for the massive EFSF loans, but their total wealth transfor for foreign loans is about 4.5%. So the problem they have with foreign debt is not with the biggest share, but with other holders such as IMF, ECB or private actors.

[Jacob]

From whose point of view is that not easy?
There are virtually no non-official creditors left.  The size of the payment stream the institutional creditors receive is of no economic relevance.
The only difficulty is the domestic politics of the EU states.  That I agree is a big problem.

It's perhaps most difficult for the next fiscal cripple that needs a bailout.

It's somewhat difficult for the program countries that don't get the same sweet deal.

I think there are also legal issues with the ECB writing off loans.

What's so sweet a deal about figuring out what's sustainable and then restructuring to match that?

Isn't that how this sort of thing is supposed to work?