How the Greek rescue failed

[MadImmortalMan]

Maybe they can ask De La Rue to print the banknotes for them and then pay with those same banknotes?

That's the obvious answer.


But AR is right.

The Greeks placed huge importance on face-to-face meetings, while the Germans felt most issues could be resolved remotely by phone or email.

I mean, seriously. 21st century. Join it.

[Sheilbh]

I mean, seriously. 21st century. Join it.

Well 21st century in our society, in a globalised economy I think being flexible and aware helps.  Especially if you're investing a lot in something.

I know from my old job that when we were going for work in the Middle East and India especially a lot of work had to go in on building up personal relationships with the people in charge of the business.  Which included lots of face-to-face meetings and lots of regular phone calls just to 'keep in touch' and often offer free advice - that was all necessary before getting them into a long-term contract.  Once that happened the client care people similarly had to make lots of trips for face-to-face meetings.  Similarly the MD talked about the change of sort-of cultural mindset when going for business in China.

The Scandinavian companies on the other hand mainly did business by e-mail with one annual trip and the odd phonecall in an emergency.

[Zanza]

I think the one high-ranking civil servant we sent to Greece was called "Reichskommissar" in their press, so I am not sure if further visits would have brought much benefit.

[Sheilbh]

I think the one high-ranking civil servant we sent to Greece was called "Reichskommissar" in their press, so I am not sure if further visits would have brought much benefit.

The press is the press.  If the UK were imposing those conditions on Ireland or India we'd get as bad a set of attacks.

But I think the criticism isn't the lack of face-to-face meetings but the lack of engagement in the first year or so of the first bailout by Berlin and Brussels and, as an aside, the lack of cultural understanding implied.

Edit:  I mean if there was a similar situation between Germany and the UK you'd get as bad or worse and we weren't even occupied.  You'd probably even get that if you beat England at football

[Zanza]

There was and is a lot of resentment whenever Germany gives policy advice or expresses its wishes or conditions. Why do you think more engagement would somehow change that? It would just have amplified that.

[Sheilbh]

I don't think it would change that.  Germany's the leader of Europe now, in particular the leader of the hard-line austerity wing of Europe and so they're going to be resented really no matter what they do.  Which is a shame because some of that resentment isn't deserved, and though some of it is I think it's all over the top. 

Though it doesn't help that Schauble's the guy who give advice.  He's the finance minister equivalent of Rumsfeld.  Everytime I see him on the TV I wait for the news of stock market declines after his latest blunt statement.

But I do think more engagement could helped make the program work, which matters considerably more than how Germany feels she's regarded.  But it's not just a Berlin problem, Brussels should have been far, far more engaged.  But look at that thing about how the Greeks decided to cut the civil service pensions and benefits and then fire a bunch - which German officials thought was the wrong way round.  If there was a more engaged, active IMF-style program then that could've been done the right way round (plus a raise) which wouldn't have made for such a demoralised staff implementing policy.

[MadImmortalMan]

How do you get more engagement when the Greeks are a stone wall? They aren't interested.

[The Brain]

The Greeks don't want to be saved. End of story.

[alfred russel]

How do you get more engagement when the Greeks are a stone wall? They aren't interested.

I have some commiseration with the Germans regarding why they should be expected to engage in the first place. Greece has maintained a primary deficit and can't seem to close it. It can either take the terms of a possible bailout--which only Germany is able to back up--or it can go on its own, which means more severe and immediate budget cuts than is currently on the table, plus possibly leaving the euro which will hurt Greeks far more than the rest Europe.

From an outsiders point of view, large parts of the Greek state seem to be in denial (at least publicly) about their situation, and seem to think that they have some leg to stand on to negotiate something.

[Sheilbh]

How do you get more engagement when the Greeks are a stone wall? They aren't interested.

That's not entirely true.  The period we're discussing here was when Papaconstantinou was Finance Minister which was Greece at their most engaged.  But you help them design policies.  Frankly telling them to update their solar energy regulations probably isn't helpful in the context of severe budget cuts and a fall of 20% of GDP.  Providing a framework and support is more helpful.

There was a time when the EU sent in people to help improve tax collection - they came with computers and everything - and revenue collection increased by around 50%.

[Iormlund]

Greece has maintained a primary deficit and can't seem to close it.

Not just Greece. We'll be lucky to achieve a drop from 9% to 7% GDP deficit this year, after >5% or so GDP spending cuts and tax hikes.

[Berkut]

But I think the criticism isn't the lack of face-to-face meetings but the lack of engagement in the first year or so of the first bailout by Berlin and Brussels and, as an aside, the lack of cultural understanding implied.

I am generally pretty damn skeptical of things being blamed on such "soft" causes like "Gosh, if only the German had spent more quality time with the Greeks, this could have been avoided!"

That is usually just an excuse to avoid looking at the actual hard factors involved.

[Berkut]

How much is this entire monetary disaster seen by anyone in Europe as being a pretty good sign that the entire concept of the Euro was just a bad idea?

Some? A lot? Not at all?

[The Brain]

How much is this entire monetary disaster seen by anyone in Europe as being a pretty good sign that the entire concept of the Euro was just a bad idea?

Some? A lot? Not at all?

Between some and a lot.

[Zanza]

But look at that thing about how the Greeks decided to cut the civil service pensions and benefits and then fire a bunch - which German officials thought was the wrong way round.

Do you seriously believe that this level of micromanagement by Germany or the EU was feasible or even desirable? That would only work if we send hordes of civil servants to Greece and basically make this sovereign nation a province of the EU under federal administration.