Europe's Populist Left

[Admiral Yi]

Again, they don't want a write off.

Have they said so explicitly?

They're talking about a balanced budget, which means something has to give somewhere.  Haircut, interest moritorium, something.

[Sheilbh]

Have they said so explicitly?

Yes. Repeatedly.

Their proposal is to reissue the loans from the Eurozone as conditional bonds tied to NGDP. They'd also like to turn their ECB debts into consols. Neither would touch the principal and the former neatly aligns the interests of creditor and debtor which is normally a good thing.

They're talking about a balanced budget, which means something has to give somewhere.  Haircut, interest moritorium, something.

They're talking about running a primary surplus into perpetuity, 'Greece will never present a budget deficit again. Never, never, never!'

[Martinus]

I thought Greece did not can the idea of the international debt conference, though so it seems like they are expecting a haircut/write-off at some point in future, but with all the PIGS being treated equally.

[Sheilbh]

I thought Greece did not can the idea of the international debt conference, though so it seems like they are expecting a haircut/write-off at some point in future, but with all the PIGS being treated equally.

They do want one. But my understanding is their big proposal is still conditional bonds because a debt 'haircut' is politically toxic for creditor countries (with the exception of the French at least) but somehow less toxic than a default.

[Admiral Yi]

Their proposal is to reissue the loans from the Eurozone as conditional bonds tied to NGDP.

On the market?

(What does the N stand for?)

They're talking about running a primary surplus into perpetuity, 'Greece will never present a budget deficit again. Never, never, never!'

A primary surplus is still a deficit.

[Sheilbh]

On the market?

By the Eurogroup.

(What does the N stand for?)

Nominal.

A primary surplus is still a deficit.

Yep. It's also all the program currently calls for (at the rate of 4.5% of GDP in perpetuity).

[Admiral Yi]

Yep. It's also all the program currently calls for (at the rate of 4.5% of GDP in perpetuity).

So it's not true when they say they will balance their budget.

Also as long as they're running an overall deficit greater than their growth rate their debt/GDP ratio will continue to climb.

[Sheilbh]

One person's interpretation of the speech: 'is there a deal to be had? No. Fuck it we'll go out in style'

Looks like we might be about to see if the Euro can survive if it's no longer irreversible, or will it just be ERM III

[Sheilbh]

So it's not true when they say they will balance their budget.

In the same way that it's untrue to say that anyone expects Greece to balance their budget.

Also as long as they're running an overall deficit greater than their growth rate their debt/GDP ratio will continue to climb.

Inflation and growth matter hence tying interest to NGDP. The 4.5% that the Troika want is based on what's needed for sustainability based on current projections of inflation and growth. It could be over-optimistic (though I think the IMF's projections have become more serious as time's gone on).

[Tonitrus]

If the Euro cannot survive one member country becoming insolvent and exiting out, it doesn't sound like a very stable idea to have begun with.

[Sheilbh]

Also important Tsipras got a very warm standing ovation from MPs and everyone would expect them to win even more seats if there's a new election so that won't solve problems as, say, the ECB have allegedly thought about.

Basically the question now is, does Europe have a plan B?

[Admiral Yi]

In the same way that it's untrue to say that anyone expects Greece to balance their budget.

In a different way, since this follows from their own statements.

[The Brain]

Also important Tsipras got a very warm standing ovation from MPs and everyone would expect them to win even more seats if there's a new election so that won't solve problems as, say, the ECB have allegedly thought about.

Basically the question now is, does Europe have a plan B?

Zyklon.

[Ed Anger]

It's really fucking confusing when three people have the same avatar.

Agreed.

Y'all live.

[The Brain]

Europe's Populist Left

Good riddance.