QuoteThomas Piketty: "Germany has never repaid."
In a forceful interview with German newspaper Die Zeit, the star economist Thomas Piketty calls for a major conference on debt. Germany, in particular, should not withhold help from Greece. This interview has been translated from the original German.
Since his successful book, "Capital in the Twenty-First Century," the Frenchman Thomas Piketty has been considered one of the most influential economists in the world. His argument for the redistribution of income and wealth launched a worldwide discussion. In a interview with Georg Blume of DIE ZEIT, he gives his clear opinions on the European debt debate.
DIE ZEIT: Should we Germans be happy that even the French government is aligned with the German dogma of austerity?
Thomas Piketty: Absolutely not. This is neither a reason for France, nor Germany, and especially not for Europe, to be happy. I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history.
ZEIT: But we Germans have already reckoned with our own history.
Piketty: But not when it comes to repaying debts! Germany's past, in this respect, should be of great significance to today's Germans. Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today's Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe.
ZEIT: But shouldn't they repay their debts?
Piketty: My book recounts the history of income and wealth, including that of nations. What struck me while I was writing is that Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the First nor the Second World War. However, it has frequently made other nations pay up, such as after the Franco-Prussian War of 1870, when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt. The history of public debt is full of irony. It rarely follows our ideas of order and justice.
ZEIT: But surely we can't draw the conclusion that we can do no better today?
Piketty: When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.
ZEIT: Are you trying to depict states that don't pay back their debts as winners?
Piketty: Germany is just such a state. But wait: history shows us two ways for an indebted state to leave delinquency. One was demonstrated by the British Empire in the 19th century after its expensive wars with Napoleon. It is the slow method that is now being recommended to Greece. The Empire repaid its debts through strict budgetary discipline. This worked, but it took an extremely long time. For over 100 years, the British gave up two to three percent of their economy to repay its debts, which was more than they spent on schools and education. That didn't have to happen, and it shouldn't happen today. The second method is much faster. Germany proved it in the 20th century. Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief.
ZEIT: So you're telling us that the German Wirtschaftswunder ["economic miracle"] was based on the same kind of debt relief that we deny Greece today?
Piketty: Exactly. After the war ended in 1945, Germany's debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.
ZEIT: That happened because people recognized that the high reparations demanded of Germany after World War I were one of the causes of the Second World War. People wanted to forgive Germany's sins this time!
Piketty: Nonsense! This had nothing to do with moral clarity; it was a rational political and economic decision. They correctly recognized that, after large crises that created huge debt loads, at some point people need to look toward the future. We cannot demand that new generations must pay for decades for the mistakes of their parents. The Greeks have, without a doubt, made big mistakes. Until 2009, the government in Athens forged its books. But despite this, the younger generation of Greeks carries no more responsibility for the mistakes of its elders than the younger generation of Germans did in the 1950s and 1960s. We need to look ahead. Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance. We need to remember this.
ZEIT: The end of the Second World War was a breakdown of civilization. Europe was a killing field. Today is different.
Piketty: To deny the historical parallels to the postwar period would be wrong. Let's think about the financial crisis of 2008/2009. This wasn't just any crisis. It was the biggest financial crisis since 1929. So the comparison is quite valid. This is equally true for the Greek economy: between 2009 and 2015, its GDP has fallen by 25%. This is comparable to the recessions in Germany and France between 1929 and 1935.
ZEIT: Many Germans believe that the Greeks still have not recognized their mistakes and want to continue their free-spending ways.
Piketty: If we had told you Germans in the 1950s that you have not properly recognized your failures, you would still be repaying your debts. Luckily, we were more intelligent than that.
ZEIT: The German Minister of Finance, on the other hand, seems to believe that a Greek exit from the Eurozone could foster greater unity within Europe.
Piketty: If we start kicking states out, then the crisis of confidence in which the Eurozone finds itself today will only worsen. Financial markets will immediately turn on the next country. This would be the beginning of a long, drawn-out period of agony, in whose grasp we risk sacrificing Europe's social model, its democracy, indeed its civilization on the altar of a conservative, irrational austerity policy.
ZEIT: Do you believe that we Germans aren't generous enough?
Piketty: What are you talking about? Generous? Currently, Germany is profiting from Greece as it extends loans at comparatively high interest rates.
ZEIT: What solution would you suggest for this crisis?
Piketty: We need a conference on all of Europe's debts, just like after World War II. A restructuring of all debt, not just in Greece but in several European countries, is inevitable. Just now, we've lost six months in the completely intransparent negotiations with Athens. The Eurogroup's notion that Greece will reach a budgetary surplus of 4% of GDP and will pay back its debts within 30 to 40 years is still on the table. Allegedly, they will reach one percent surplus in 2015, then two percent in 2016, and three and a half percent in 2017. Completely ridiculous! This will never happen. Yet we keep postponing the necessary debate until the cows come home.
ZEIT: And what would happen after the major debt cuts?
Piketty: A new European institution would be required to determine the maximum allowable budget deficit in order to prevent the regrowth of debt. For example, this could be a commmittee in the European Parliament consisting of legislators from national parliaments. Budgetary decisions should not be off-limits to legislatures. To undermine European democracy, which is what Germany is doing today by insisting that states remain in penury under mechanisms that Berlin itself is muscling through, is a grievous mistake.
ZEIT: Your president, François Hollande, recently failed to criticize the fiscal pact.
Piketty: This does not improve anything. If, in past years, decisions in Europe had been reached in more democratic ways, the current austerity policy in Europe would be less strict.
ZEIT: But no political party in France is participating. National sovereignty is considered holy.
Piketty: Indeed, in Germany many more people are entertaining thoughts of reestablishing European democracy, in contrast to France with its countless believers in sovereignty. What's more, our president still portrays himself as a prisoner of the failed 2005 referendum on a European Constitution, which failed in France. François Hollande does not understand that a lot has changed because of the financial crisis. We have to overcome our own national egoism.
ZEIT: What sort of national egoism do you see in Germany?
Piketty: I think that Germany was greatly shaped by its reunification. It was long feared that it would lead to economic stagnation. But then reunification turned out to be a great success thanks to a functioning social safety net and an intact industrial sector. Meanwhile, Germany has become so proud of its success that it dispenses lectures to all other countries. This is a little infantile. Of course, I understand how important the successful reunification was to the personal history of Chancellor Angela Merkel. But now Germany has to rethink things. Otherwise, its position on the debt crisis will be a grave danger to Europe.
ZEIT: What advice do you have for the Chancellor?
Piketty: Those who want to chase Greece out of the Eurozone today will end up on the trash heap of history. If the Chancellor wants to secure her place in the history books, just like [Helmut] Kohl did during reunification, then she must forge a solution to the Greek question, including a debt conference where we can start with a clean slate. But with renewed, much stronger fiscal discipline.
This interview was translated by Gavin Schalliol.
:showoff:
Piketty calling other people infantile? :hmm:
Quote from: The Brain on July 09, 2015, 06:24:19 AM
Piketty calling other people infantile? :hmm:
That guy is so stereotypically French Socialist, that its not even funny anymore.
Quote from: Tamas on July 09, 2015, 07:03:55 AM
Quote from: The Brain on July 09, 2015, 06:24:19 AM
Piketty calling other people infantile? :hmm:
That guy is so stereotypically French Socialist, that its not even funny anymore.
he needs to run out of other people's money pronto.
Piketty is kind of missing the point here.
1. Greece is part of a confederation, the EU. Germany was not part of any kind of Confederation at that point and was under Allied occupation so it was not like we didn't have levers if they tried to immediately run up huge debts again. He mentions this when he says "But with renewed, much stronger fiscal discipline" but how would Germany enforce that on Greece? They are not occupying Greece.
2. Debt relief to Germany was done at considerable expense by the USA for political reasons. What political objectives would be achieved by a nation eating it for Greece?
3. All these debts were run up during national wars of survival not during times of prosperity. Everybody could be confident Germany, France, and Great Britain would not, under normal circumstances, run up debts like this.
German occupation of Greece, now that's an idea. :hmm:
Quote from: Grey Fox on July 09, 2015, 07:45:20 AM
German occupation of Greece, now that's an idea. :hmm:
Well Germany would have to beg the USA to do it for them. Their one troop transport would break down in Croatia someplace on the way.
Quote from: Valmy on July 09, 2015, 07:58:31 AM
Quote from: Grey Fox on July 09, 2015, 07:45:20 AM
German occupation of Greece, now that's an idea. :hmm:
Well Germany would have to beg the USA to do it for them. Their one troop transport would break down in Croatia someplace on the way.
We can pay some countries to do it for us. :shifty:
Quote from: Crazy_Ivan80 on July 09, 2015, 07:10:18 AM
he needs to run out of other people's money pronto.
No shit.
Quote from: Syt on July 09, 2015, 08:04:01 AM
Quote from: Valmy on July 09, 2015, 07:58:31 AM
Quote from: Grey Fox on July 09, 2015, 07:45:20 AM
German occupation of Greece, now that's an idea. :hmm:
Well Germany would have to beg the USA to do it for them. Their one troop transport would break down in Croatia someplace on the way.
We can pay some countries to do it for us. :shifty:
Now that's the smart way to do it! :showoff:
Or, Maybe if you can locate more of these then you'll have a better chance of a successful invasion. Old German man had a Panther in his basement. Used it to plow roads in winter. :bowler:
http://www.newser.com/story/209357/wwii-tank-was-stashed-in-78-year-olds-cellar.html
Quote from: Valmy on July 09, 2015, 07:15:04 AM
Piketty is kind of missing the point here.
1. Greece is part of a confederation, the EU. Germany was not part of any kind of Confederation at that point and was under Allied occupation so it was not like we didn't have levers if they tried to immediately run up huge debts again. He mentions this when he says "But with renewed, much stronger fiscal discipline" but how would Germany enforce that on Greece? They are not occupying Greece.
2. Debt relief to Germany was done at considerable expense by the USA for political reasons. What political objectives would be achieved by a nation eating it for Greece?
3. All these debts were run up during national wars of survival not during times of prosperity. Everybody could be confident Germany, France, and Great Britain would not, under normal circumstances, run up debts like this.
:yes:
The point is, the world owes America about three or four trillion dollars, and if you don't want your cities to become seas of flames, you should start paying up.
Heh. Tough talk from a country that, despite having complete material superiority, hasn't managed to win a war in two generations.
Aw, we won Gulf War I. :(
:lol:
Ok, I'll give you that one.
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Quote from: Iormlund on July 09, 2015, 11:00:04 AM
Heh. Tough talk from a country that, despite having complete material superiority, hasn't managed to win a war in two generations.
Well technically speaking we haven't declared war since 1941 :P
Quote from: crazy canuck on July 09, 2015, 11:09:23 AM
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Then Vietnam was a loss by SEATO and cannot fall at our feet -_-
B-52s cannot fail, they can only be failed.
Quote from: Valmy on July 09, 2015, 11:11:06 AM
Quote from: crazy canuck on July 09, 2015, 11:09:23 AM
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Then Vietnam was a loss by SEATO and cannot fall at our feet -_-
I should have qualified my comment that GWI was a war with broad based international support.
Quote from: crazy canuck on July 09, 2015, 11:35:14 AM
Quote from: Valmy on July 09, 2015, 11:11:06 AM
Quote from: crazy canuck on July 09, 2015, 11:09:23 AM
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Then Vietnam was a loss by SEATO and cannot fall at our feet -_-
I should have qualified my comment that GWI was a war with broad based international support.
And that was only because of our leadership and considerable effort. If it was not for us nobody would have done shit.
Quote from: crazy canuck on July 09, 2015, 11:35:49 AM
USA! USA! :D
And Panama. So we suck at long guerrilla wars of occupation. Well who doesn't?
Quote from: Valmy on July 09, 2015, 11:36:19 AM
Quote from: crazy canuck on July 09, 2015, 11:35:14 AM
Quote from: Valmy on July 09, 2015, 11:11:06 AM
Quote from: crazy canuck on July 09, 2015, 11:09:23 AM
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Then Vietnam was a loss by SEATO and cannot fall at our feet -_-
I should have qualified my comment that GWI was a war with broad based international support.
And that was only because of our leadership and considerable effort. If it was not for us nobody would have done shit.
It was also at a time when Russia was in no position to be a dick about the whole thing.
Quote from: Valmy on July 09, 2015, 11:36:19 AM
Quote from: crazy canuck on July 09, 2015, 11:35:14 AM
Quote from: Valmy on July 09, 2015, 11:11:06 AM
Quote from: crazy canuck on July 09, 2015, 11:09:23 AM
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Then Vietnam was a loss by SEATO and cannot fall at our feet -_-
I should have qualified my comment that GWI was a war with broad based international support.
And that was only because of our leadership and considerable effort. If it was not for us nobody would have done shit.
Actually, if it had not been for a well funded and very well orchestrated public relations blitz by the Kuwait elite (particularly within the US) nobody would have done anything. ;)
Quote from: crazy canuck on July 09, 2015, 11:38:12 AM
Actually, if it had not been for a well funded and very well orchestrated public relations blitz by the Kuwait elite (particularly within the US) nobody would have done anything. ;)
Actually, if Iraq wouldn't have invaded nobody would have done anything.
Quote from: Valmy on July 09, 2015, 11:37:01 AM
Quote from: crazy canuck on July 09, 2015, 11:35:49 AM
USA! USA! :D
And Panama. So we suck at long guerrilla wars of occupation. Well who doesn't?
Was Panama a war? More of a snatch and grab wasn't it?
Quote from: crazy canuck on July 09, 2015, 11:40:44 AM
Was Panama a war? More of a snatch and grab wasn't it?
Most of our wars these days start out that way. That one just stuck.
'Don't worry this will be just a quick little operation using a few advisors/special forces/airstrikes and...OMG WTF'
Quote from: crazy canuck on July 09, 2015, 11:38:12 AM
Actually, if it had not been for a well funded and very well orchestrated public relations blitz by the Kuwait elite (particularly within the US) nobody would have done anything. ;)
Bullshit. Saddam was told before the invasion that we would "protect our friends".
QuoteZEIT: So you're telling us that the German Wirtschaftswunder ["economic miracle"] was based on the same kind of debt relief that we deny Greece today?
Piketty: Exactly. After the war ended in 1945, Germany's debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.
Using the German economy of 1945 in a relative comparison is retarded. The country was completely destroyed, the economy had collapsed to barter trade, and millions of Germans were working as prisoners of war in Allied countries. How is that situation even remotely comparable to Germany in 1955 or to Greece in 2015?
The London Debt Agreement was about reducing Germany's foreign debt of 30 billion Mark by 60%. 30 billion Mark was less than a sixth of German GDP of 1955, so the reduction was about 10% of German GDP. Greece's first haircut was about 11% of GDP according to Wikipedia. Greece is just in a much worse situation than Germany was after WW2 - thanks to the victors not putting high reparations on Germany.
Quote from: crazy canuck on July 09, 2015, 11:38:12 AM
Quote from: Valmy on July 09, 2015, 11:36:19 AM
Quote from: crazy canuck on July 09, 2015, 11:35:14 AM
Quote from: Valmy on July 09, 2015, 11:11:06 AM
Quote from: crazy canuck on July 09, 2015, 11:09:23 AM
Quote from: Ideologue on July 09, 2015, 11:03:10 AM
Aw, we won Gulf War I. :(
Coalition war. Doesn't count.
Then Vietnam was a loss by SEATO and cannot fall at our feet -_-
I should have qualified my comment that GWI was a war with broad based international support.
And that was only because of our leadership and considerable effort. If it was not for us nobody would have done shit.
Actually, if it had not been for a well funded and very well orchestrated public relations blitz by the Kuwait elite (particularly within the US) nobody would have done anything. ;)
I once met Bob Gray. :)
Edit: :( Crap, he's dead now. RIP http://www.nytimes.com/2014/04/25/us/robert-gray-a-powerhouse-in-washington-dies-at-92.html?_r=0
Quote from: frunk on July 09, 2015, 11:40:25 AM
Quote from: crazy canuck on July 09, 2015, 11:38:12 AM
Actually, if it had not been for a well funded and very well orchestrated public relations blitz by the Kuwait elite (particularly within the US) nobody would have done anything. ;)
Actually, if Iraq wouldn't have invaded nobody would have done anything.
Sure. But the US doesn't exactly champion an international coalition every time one country invades another does it ;)
Quote from: crazy canuck on July 09, 2015, 11:54:23 AM
Sure. But the US doesn't exactly champion an international coalition every time one country invades another does it ;)
Because that would be insane. I mean we may not the smartest people around but nobody is that stupid.
Quote from: Valmy on July 09, 2015, 11:56:16 AM
Quote from: crazy canuck on July 09, 2015, 11:54:23 AM
Sure. But the US doesn't exactly champion an international coalition every time one country invades another does it ;)
Because that would be insane. I mean we may not the smartest people around but nobody is that stupid.
:hmm:
Quote from: crazy canuck on July 09, 2015, 11:56:47 AM
Quote from: Valmy on July 09, 2015, 11:56:16 AM
Quote from: crazy canuck on July 09, 2015, 11:54:23 AM
Sure. But the US doesn't exactly champion an international coalition every time one country invades another does it ;)
Because that would be insane. I mean we may not the smartest people around but nobody is that stupid.
:hmm:
So we should have created a massive coalition and forced the issue when Russia invaded Georgia?
We won Iraq War II, at least by any measure that evaluates war as a zero sum game with a winner and loser. If we didn't win, who did, Saddam Hussein?
War is profoundly negative sum, most wars leave everyone worse off, and they usually don't go as planned. If you only crown winners to wars when one side is made better off, then ever winning a war is a major accomplishment. Most will only have losers.
Picketty is right in that Germany is morally hypocritical, though. Especially when it comes to Greece (or any other country they plundered). It doesn't help that they have been proved wrong on pragmatic terms, as well.
That said, the Greeks are not exactly angels, either.
In any case, debt relief is necessary, but won't cut it either. Greece needs fundamental change. Not tweaks here and there. I still doubt change can come from the inside, since the only political alternatives for the establishment are the far right and the far left, neither of which will be very interested in opening up the economy to (Greek) outsiders.
The least painful course of action, I think, would be for Greece to get back to the Drachma while they sort their shit out. Have the ECB take over and monetize the amounts owed by Greece as of now. Greece gets a clean slate and the Eurozone can isolate itself from further troubles.
Quote from: alfred russel on July 09, 2015, 11:57:55 AMIf we didn't win, who did, Saddam Hussein?
As of now? ISIL are the clear winners
Quote from: Valmy on July 09, 2015, 11:45:30 AM
Quote from: crazy canuck on July 09, 2015, 11:40:44 AM
Was Panama a war? More of a snatch and grab wasn't it?
Most of our wars these days start out that way. That one just stuck.
'Don't worry this will be just a quick little operation using a few advisors/special forces/airstrikes and...OMG WTF'
"Daddy, what was Grenada?"
Quote from: alfred russel on July 09, 2015, 11:57:55 AM
We won Iraq War II, at least by any measure that evaluates war as a zero sum game with a winner and loser. If we didn't win, who did, Saddam Hussein?
Well let's just say Bush and Blair established some pretty unrealistic victory conditions going in.
Quote from: Iormlund on July 09, 2015, 11:59:13 AM
Quote from: alfred russel on July 09, 2015, 11:57:55 AMIf we didn't win, who did, Saddam Hussein?
As of now? ISIL are the clear winners
Well in that case the war is not over, it has just begun.
Quote from: Iormlund on July 09, 2015, 11:58:40 AM
In any case, debt relief is necessary, but won't cut it either. Greece needs fundamental change. Not tweaks here and there. I still doubt change can come from the inside, since the only political alternatives for the establishment are the far right and the far left, neither of which will be very interested in opening up the economy to (Greek) outsiders.
The least painful course of action, I think, would be for Greece to get back to the Drachma while they sort their shit out. Have the ECB take over and monetize the amounts owed by Greece as of now. Greece gets a clean slate and the Eurozone can isolate itself from further troubles.
Well that is the thing. Germany is acting out of political considerations for the EU confederation, which is why most of the other countries are going along with them. This is not about economics since the amounts of money we are talking about are small-ish.
Quote from: Valmy on July 09, 2015, 12:04:27 PM
Quote from: Iormlund on July 09, 2015, 11:58:40 AM
In any case, debt relief is necessary, but won't cut it either. Greece needs fundamental change. Not tweaks here and there. I still doubt change can come from the inside, since the only political alternatives for the establishment are the far right and the far left, neither of which will be very interested in opening up the economy to (Greek) outsiders.
The least painful course of action, I think, would be for Greece to get back to the Drachma while they sort their shit out. Have the ECB take over and monetize the amounts owed by Greece as of now. Greece gets a clean slate and the Eurozone can isolate itself from further troubles.
Well that is the thing. Germany is acting out of political considerations for the EU confederation, which is why most of the other countries are going along with them. This is not about economics since the amounts of money we are talking about are small-ish.
I think the German government has been (mis)guided mostly by morality, actually. Which is why Piketty has a point.
But it's silly to focus on them in this case. I'd wager the most recalcitrant hard-liners when it comes to current events are Rajoy and Co. Anything that makes "alternative" governments like Syriza look good puts their position in peril, not to mention all the money loaned to Greece.
Quote from: Valmy on July 09, 2015, 11:57:43 AM
Quote from: crazy canuck on July 09, 2015, 11:56:47 AM
Quote from: Valmy on July 09, 2015, 11:56:16 AM
Quote from: crazy canuck on July 09, 2015, 11:54:23 AM
Sure. But the US doesn't exactly champion an international coalition every time one country invades another does it ;)
Because that would be insane. I mean we may not the smartest people around but nobody is that stupid.
:hmm:
So we should have created a massive coalition and forced the issue when Russia invaded Georgia?
No, the point is the smartest people around should not have failed so miserably in choosing the wars that they did fight. That's right GWII I am looking at you.
Quote from: crazy canuck on July 09, 2015, 12:28:53 PM
No, the point is the smartest people around should not have failed so miserably in choosing the wars that they did fight. That's right GWII I am looking at you.
Indeed. We are morons. When I said we are not the smartest guys around I was implying we are very much not the smartest guys around. And even though this has pretty much been true since the second generation took over after the revolution we still somehow ended up in charge of everything. Actually that is probably why :P
The British were all: "Ok this sucks who is stupid enough to want to do this job?"
Quote from: Valmy on July 09, 2015, 12:42:16 PM
The British were all: "Ok this sucks who is stupid enough to want to do this job?"
:D
Quote from: Valmy on July 09, 2015, 12:42:16 PM
Quote from: crazy canuck on July 09, 2015, 12:28:53 PM
No, the point is the smartest people around should not have failed so miserably in choosing the wars that they did fight. That's right GWII I am looking at you.
Indeed. We are morons. When I said we are not the smartest guys around I was implying we are very much not the smartest guys around. And even though this has pretty much been true since the second generation took over after the revolution we still somehow ended up in charge of everything. Actually that is probably why :P
The British were all: "Ok this sucks who is stupid enough to want to do this job?"
:bleeding: Stop sucking up to the foreigners.
Quote from: derspiess on July 09, 2015, 01:29:35 PM
:bleeding: Stop sucking up to the foreigners.
We pretty much don't know shit outside of our borders and we have a hell of a time caring. Having us decide the outcome of shit in Asia and Africa is silly. Yet we have to.
I thought you were on the 'oh how I wish we could just be isolationist again, fuck these clowns' train with Ed.
Has Greece actually requested a debt write-off?
Quote
Germany concedes Greece needs debt relief; Greek plan awaited
Reuters By John O'Donnell and Angeliki KoutantouBy John O'Donnell and Angeliki Koutantou
FRANKFURT/ATHENS (Reuters) - Germany conceded on Thursday that Greece would need some debt restructuring as part of any new loan program to make its economy viable as the Greek cabinet raced to finalize reform proposals to avert an imminent economic meltdown.
The admission by German Finance Minister Wolfgang Schaeuble came hours before a midnight deadline for Athens to submit a reform plan meant to convince European partners to give it another loan to save it from a possible exit from the euro.
Greece has already had two bailouts worth 240 billion euros from the euro zone and the International Monetary Fund, but its economy has shrunk by a quarter, unemployment is more than 25 percent and one in two young people is out of work.
Schaeuble, who has made no secret of his scepticism about Greece's fitness to remain in the currency area, told a conference in Frankfurt: "Debt sustainability is not feasible without a haircut and I think the IMF is correct in saying that.
But he added: "There cannot be a haircut because it would infringe the system of the European Union."
He offered no solution to the conundrum, which implied that Greece's debt problem might not be soluble within the euro zone.
But he did say there was limited scope for "reprofiling" Greek debt by extending loan maturities, shaving interest rates and lengthening a moratorium on debt service payments.
European Council President Donald Tusk, who will chair an emergency euro zone summit on Sunday to decide Greece's fate, joined growing international calls for Athens to be granted some form of debt relief as part of any new loan deal if Prime Minister Alexis Tsipras finally delivers convincing reforms.
Tsipras chaired a marathon cabinet meeting to finalize a package of tax hikes and pension reforms to send to euro zone authorities in a race to secure agreement at the weekend on a third financial rescue.
The leader of his junior coalition partner, Defense Minister Panos Kammenos, told reporters the Greek proposal had been approved by the cabinet and would be submitted shortly.
Tusk said a realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors.
"Otherwise, we will continue the lethargic dance we have been dancing for the past five months," he said.
Failure to reach a deal on Sunday, including releasing some money to enable Athens to cover debt service over the next few weeks could lead to a collapse of Greek banks next week.
If there is no agreement, all 28 European Union leaders will discuss measures to limit the damage from a Greek collapse, including humanitarian aid, possible border controls and steps to mitigate the impact on neighbors, EU officials said.
DRAGHI DOUBTFUL
Just how uncertain the coming days are was highlighted when
European Central Bank President Mario Draghi voiced highly unusual doubts about the chances of rescuing Greece.
Italian daily Il Sole 24 Ore quoted the ECB chief, under growing fire in Germany for keeping Greek banks afloat, as saying he was not sure a solution would be found for Greece and he did not believe Russia would come to Athens' rescue.
Asked if a deal to save Greece could be wrapped up, Draghi said: "I don't know, this time it's really difficult."
The ECB is keeping shuttered Greek banks afloat with emergency liquidity capped until the weekend.
Even France, Greece's strongest supporter in the euro zone, acknowledged it was working on scenarios for a Greek exit from the currency area if weekend efforts to clinch a deal fail.
Under the agreed timetable, the leftist Greek government, which formally applied on Wednesday for a three-year loan from the European Stability Mechanism bailout fund, has until midnight to present convincing, detailed reform proposals.
Having won a thumping referendum majority to reject the austerity terms of a previous bailout plan, fired his turbulent finance minister and secured support from opposition party leaders, Tsipras is in a stronger position to impose tough measures and face down resistance at home.
But in a sign of the some of the challenges he will face, the leader of the far-left wing of his Syriza party came out to denounce any imposition of harsh measures on Greeks.
"We don't want add to the past two failed bailouts a third bailout of tough austerity which will not give any prospects for the country," Energy Minister Panagiotis Lafazanis said.
According to Athens daily Kathimerini, Greece is planning a reform package worth 12 billion euros over two years, more than previously planned to offset a return to recession after months of difficult negotiations with creditors.
Instead of growing by 0.5 percent this year, months of uncertainty and almost two weeks of capital controls mean "there are estimates of a recession of about 3 percent", Kathimerini said. Greece emerged only last year from a deep recession that shrank its economy by a quarter over six years.
Tougher measures may face resistance from the hard-left wing of Tsipras' Syriza party and from his junior coalition partner, the right-wing nationalist Independent Greeks.
European officials told Reuters on Wednesday that some large Greek banks may have to be shut and taken over by stronger rivals as part of a restructuring of the sector that would follow any bailout of the country.
One official said Greece's four big banks - National Bank of Greece, Eurobank, Piraeus and Alpha Bank - could be reduced to just two, a measure that would doubtless encounter fierce resistance in Athens.
German Bundesbank chief Jens Weidman said capital controls should remain in force in Greece until there was any deal, and that the ECB should not increase its liquidity assistance for Greek banks, without which they may collapse next week.
Quote from: Martinus on July 09, 2015, 06:21:03 AM
Piketty: Nonsense! This had nothing to do with moral clarity; it was a rational political and economic decision.
That's the key point. All this talk about morality and obligation and hypocrisy is a waste of breath. It's silly to put the entire European project at risk and cause over a matter that is virtually immaterial as an economic matter at the European level.
Piketty is also right that historically high indebtedness has been addressed by a combination of primary surplus, moderate inflation and/or some form of reduction/forgiveness. Greece actually delivered the primary surplus but the problem is that the Euro makes moderate inflation impossible, and for reasons I can't fathom, debt reduction wasn't addressed earlier when it could have made a bigger difference politically.
Quote from: Valmy on July 09, 2015, 01:44:58 PM
Quote from: derspiess on July 09, 2015, 01:29:35 PM
:bleeding: Stop sucking up to the foreigners.
We pretty much don't know shit outside of our borders and we have a hell of a time caring. Having us decide the outcome of shit in Asia and Africa is silly. Yet we have to.
I thought you were on the 'oh how I wish we could just be isolationist again, fuck these clowns' train with Ed.
Sure, but I avoid the sucking up part.
His suggestions on how to prevent ahistorically high indebtedness in the future are a bit weak. We need somebody with some real prevention ideas.
That's because there's no practical way to do that except federalizing economic policy.
Quote from: Iormlund on July 09, 2015, 03:20:27 PM
That's because there's no practical way to do that except federalizing economic policy.
I don't think so. There are market ways. Like stop using bad debts as good bank collateral. Regulators look at a bank that's loaded to the gills with dodgy bonds on the books and say yeah you're well-capitalized! Derp! Find ways to depress the market appetite for bad bonds. That would be way more effective a deterrent than any federal controls. One way to scare off investors would be to haircut the hell out of all the sovereign debt in Europe. :lol:
In other words, the customers should have stopped showing up at Greek bond auctions 100% of GDP ago. Why did they keep coming?
Quote from: MadImmortalMan on July 09, 2015, 03:16:32 PM
We need somebody with some real prevention ideas.
Ban the business cycle
Outlaw depressions.
Mandate we ain't going to make war no more.
Legislate peace on earth and good will towards men.
Defecate rainbows.
Shitting rainbows is more rational than buying Greek bonds. :P
Quote from: The Minsky Moment on July 09, 2015, 03:32:24 PM
Quote from: MadImmortalMan on July 09, 2015, 03:16:32 PM
We need somebody with some real prevention ideas.
Ban the business cycle
Outlaw depressions.
Mandate we ain't going to make war no more.
Legislate peace on earth and good will towards men.
Defecate rainbows.
It can be done. Well, not the last one.
Quote from: MadImmortalMan on July 09, 2015, 03:37:19 PM
Shitting rainbows is more rational than buying Greek bonds. :P
You guys keep forgetting the private bondholders got bought out. :contract:
Quote from: MadImmortalMan on July 09, 2015, 03:28:52 PM
In other words, the customers should have stopped showing up at Greek bond auctions 100% of GDP ago. Why did they keep coming?
Because there was an implicit guarantee via Stability and Growth Pact.
Quote from: Valmy on July 09, 2015, 11:57:43 AM
Quote from: crazy canuck on July 09, 2015, 11:56:47 AM
Quote from: Valmy on July 09, 2015, 11:56:16 AM
Quote from: crazy canuck on July 09, 2015, 11:54:23 AM
Sure. But the US doesn't exactly champion an international coalition every time one country invades another does it ;)
Because that would be insane. I mean we may not the smartest people around but nobody is that stupid.
:hmm:
So we should have created a massive coalition and forced the issue when Russia invaded Georgia?
Please leave McCain out of this!
Quote from: Iormlund on July 09, 2015, 11:00:04 AM
Heh. Tough talk from a country that, despite having complete material superiority, hasn't managed to win a war in two generations.
Germany on the other hand has been so succesful in winning wars. :P
Quote from: Martinus on July 09, 2015, 05:00:31 PM
Quote from: Iormlund on July 09, 2015, 11:00:04 AM
Heh. Tough talk from a country that, despite having complete material superiority, hasn't managed to win a war in two generations.
Germany on the other hand has been so succesful in winning wars. :P
You are forgetting the qualifier about having complete material superiority ;)
Besides, it has always done quite well against Poland.
Quote from: crazy canuck on July 09, 2015, 05:10:39 PM
You are forgetting the qualifier about having complete material superiority ;)
Very expensive material though. We are not made of money.
Quote from: crazy canuck on July 09, 2015, 05:10:39 PM
Besides, it has always done quite well against Poland.
Not always.
(https://upload.wikimedia.org/wikipedia/commons/a/a1/Matejko_Battle_of_Grunwald.jpg)
Quote from: Valmy on July 09, 2015, 05:49:37 PM
Quote from: crazy canuck on July 09, 2015, 05:10:39 PM
You are forgetting the qualifier about having complete material superiority ;)
Very expensive material though. We are not made of money.
Was it less expensive for the Germans?
Quote from: crazy canuck on July 09, 2015, 05:52:28 PM
Quote from: Valmy on July 09, 2015, 05:49:37 PM
Quote from: crazy canuck on July 09, 2015, 05:10:39 PM
You are forgetting the qualifier about having complete material superiority ;)
Very expensive material though. We are not made of money.
Was it less expensive for the Germans?
700 billion dollars for the Iraq War...let's see that is about 40 billion dollars in 1940.
Could Germany have afforded to spend that on some marginal conflict thousands of miles from Germany few people in Germany gave a shit about? No? That is what I thought.
The US military performed pretty well in those wars, the problem was more the decision to fight the wars in the first place. Eg the goal in GW2 was to unseat Saddam. You can question the mission but it was accomplished.
The US lost in Vietnam, and the end result is now Vietnam is a key US ally in Southeast Asia. Something for the hawks to reflect about re Iran.
I thought the goal of GW2 was to spread freedom and democracy around.
There is democracy in Iraq, for better or worse.
Quote from: The Minsky Moment on July 09, 2015, 08:00:44 PM
There is democracy in Iraq, for better or worse.
Isn't half of it a caliphate by now?
Quote from: Zanza on July 10, 2015, 05:59:16 AM
Quote from: The Minsky Moment on July 09, 2015, 08:00:44 PM
There is democracy in Iraq, for better or worse.
Isn't half of it a caliphate by now?
That is kind of a result of that actually. Democracy meant two Shias and one Sunni were voting on what was the true religion. The Sunnis found their allies.
Quote from: Valmy on July 09, 2015, 06:25:52 PM
Quote from: crazy canuck on July 09, 2015, 05:52:28 PM
Quote from: Valmy on July 09, 2015, 05:49:37 PM
Quote from: crazy canuck on July 09, 2015, 05:10:39 PM
You are forgetting the qualifier about having complete material superiority ;)
Very expensive material though. We are not made of money.
Was it less expensive for the Germans?
700 billion dollars for the Iraq War...let's see that is about 40 billion dollars in 1940.
Could Germany have afforded to spend that on some marginal conflict thousands of miles from Germany few people in Germany gave a shit about? No? That is what I thought.
What are you on about? Go back and look at the claim I was responding to.
Quote from: crazy canuck on July 10, 2015, 07:27:12 AM
What are you on about? Go back and look at the claim I was responding to.
I am on about the fact that extreme material superiority doesn't mean much when it is so nationally debilitating to deploy and in scenarios, where it is not even decisive enough to bring about victory, and where vital interests are not even at stake.
Quote from: Valmy on July 10, 2015, 07:39:09 AM
Quote from: crazy canuck on July 10, 2015, 07:27:12 AM
What are you on about? Go back and look at the claim I was responding to.
I am on about the fact that extreme material superiority doesn't mean much when it is so nationally debilitating to deploy and in scenarios, where it is not even decisive enough to bring about victory, and where vital interests are not even at stake.
So you think the Germans had material superiority in WWII but lacked the ability to deploy it because it would be too nationally debilitating to deploy it?
Quote from: crazy canuck on July 10, 2015, 09:10:39 AM
So you think the Germans had material superiority in WWII but lacked the ability to deploy it because it would be too nationally debilitating to deploy it?
No because military gear was much less expensive back then. Even just training and equipping an infantry grunt costs a shitload for the US military of today. Which is why our "material superiority" is not the overwhelming advantage you have this need to portray it as.
But if they had fought a comparable war to ours in Iraq...actually say they decided to fight a war in Aghanistan and Iraq in 1939 instead of Poland. Now they might win just because they are a fascist dictatorship but it would be pretty damn expensive and not be particularly interesting to German soldiers having to fight it and civilians having to support it.
Quote from: Valmy on July 10, 2015, 09:29:35 AM
Quote from: crazy canuck on July 10, 2015, 09:10:39 AM
So you think the Germans had material superiority in WWII but lacked the ability to deploy it because it would be too nationally debilitating to deploy it?
No because military gear was much less expensive back then. Even just training and equipping an infantry grunt costs a shitload for the US military of today. Which is why our "material superiority" is not the overwhelming advantage you have this need to portray it as.
But if they had fought a comparable war to ours in Iraq...actually say they decided to fight a war in Aghanistan and Iraq in 1939 instead of Poland. Now they might win just because they are a fascist dictatorship but it would be pretty damn expensive and not be particularly interesting to German soldiers having to fight it and civilians having to support it.
Ok, lets get a little more basic. Do you content that Germany had a material superiority over the Allies in WWII? I thought the consensus was that it was the Allies who had material superiority.
Quote from: crazy canuck on July 10, 2015, 09:31:56 AM
Ok, lets get a little more basic. Do you content that Germany had a material superiority over the Allies in WWII? I thought the consensus was that it was the Allies who had material superiority.
No. I was referring to a hypothetical comparable conflict in central Asia where they would have had material superiority though.
Quote from: Valmy on July 10, 2015, 09:45:10 AM
Quote from: crazy canuck on July 10, 2015, 09:31:56 AM
Ok, lets get a little more basic. Do you content that Germany had a material superiority over the Allies in WWII? I thought the consensus was that it was the Allies who had material superiority.
No. I was referring to a hypothetical comparable conflict in central Asia where they would have had material superiority though.
And I was talking about an event that actually happened when responding to Marti's comment about Germany in WWII ;)
Quote from: crazy canuck on July 10, 2015, 09:47:35 AM
And I was talking about an event that actually happened when responding to Marti's comment about Germany in WWII ;)
And I was responding to it in the context of Iorm's comment which Marty was responding to. Because I thought it was part of an ongoing conversation and stuff.
Quote from: Valmy on July 10, 2015, 09:50:04 AM
Quote from: crazy canuck on July 10, 2015, 09:47:35 AM
And I was talking about an event that actually happened when responding to Marti's comment about Germany in WWII ;)
And I was responding to it in the context of Iorm's comment which Marty was responding to. Because I thought it was part of an ongoing conversation and stuff.
Ok. Well its a bit bizarre to disagree with position that Marti was wrong to compare the US which does have material superiority to WWI Germany. Your argument is that even though the US enjoys material superiority it is too costly to mobilize that superiority for most wars. But that has nothing at all to do with the point I was making. Germany was in a total war situation. They would have used their material superiority if they had it.
To bring the thread back on topic, here's an interesting essay by Zizek.
QuoteSlavoj Žižek on Greece: This is a chance for Europe to awaken
The Greeks are correct: Brussels' denial that this is an ideological question is ideology at its purest – and symptomatic of our whole political process.
The unexpectedly strong No in the Greek referendum was a historical vote, cast in a desperate situation. In my work I often use the well-known joke from the last decade of the Soviet Union about Rabinovitch, a Jew who wants to emigrate. The bureaucrat at the emigration office asks him why, and Rabinovitch answers: "There are two reasons why. The first is that I'm afraid that in the Soviet Union the Communists will lose power, and the new power will put all the blame for the Communist crimes on us, Jews – there will again be anti-Jewish pogroms . . ."
"But," the bureaucrat interrupts him, "this is pure nonsense. Nothing can change in the Soviet Union! The power of the Communists will last for ever!"
"Well," responds Rabinovitch calmly, "that's my second reason."
I was informed that a new version of this joke is now circulating in Athens. A young Greek man visits the Australian consulate in Athens and asks for a work visa. "Why do you want to leave Greece?" asks the official.
"For two reasons," replies the Greek. "First, I am worried that Greece will leave the EU, which will lead to new poverty and chaos in the country . . ."
"But," interrupts the official, "this is pure nonsense: Greece will remain in the EU and submit to financial discipline!"
"Well," responds the Greek calmly, "this is my second reason."
Are then both choices worse, to paraphrase Stalin?
The moment has come to move beyond the irrelevant debates about the possible mistakes and misjudgements of the Greek government. The stakes are now much too high.
That a compromise formula always eludes at the last moment in the ongoing negotiations between Greece and the EU administrators is in itself deeply symptomatic, since it doesn't really concern actual financial issues – at this level, the difference is minimal. The EU usually accuses Greeks of talking only in general terms, making vague promises without specific details, while Greeks accuse the EU of trying to control even the tiniest details and imposing on Greece conditions that are harsher than those imposed on the previous government. But what lurks behind these reproaches is another, much deeper conflict. The Greek prime minister, Alexis Tsipras, recently remarked that if he were to meet alone with Angela Merkel for dinner, they would find a formula in two hours. His point was that he and Merkel, the two politicians, would treat the disagreement as a political one, in contrast to technocratic administrators such as the Eurogroup president, Jeroen Dijsselbloem. If there is an emblematic bad guy in this whole story, it is Dijsselbloem, whose motto is: "If I get into the ideological side of things, I won't achieve anything."
This brings us to the crux of the matter: Tsipras and the former finance minister Yanis Varoufakis, who resigned on 6 July, talk as if they are part of an open political process where decisions are ultimately "ideological" (based on normative preferences), while the EU technocrats talk as if it is all a matter of detailed regulatory measures. When the Greeks reject this approach and raise more fundamental political issues, they are accused of lying, of avoiding concrete solutions, and so on. It is clear that the truth here is on the Greek side: the denial of "the ideological side" advocated by Dijsselbloem is ideology at its purest. It masks (falsely presents) as purely expert regulatory measures that are effectively grounded in politico-ideological decisions.
On account of this asymmetry, the "dialogue" between Tsipras or Varoufakis and their EU partners often appears as a dialogue between a young student who wants a serious debate on basic issues and an arrogant professor who, in his answers, humiliatingly ignores the issue and scolds the student on technical points ("You didn't formulate that correctly! You didn't take into account that regulation!"). Or even as a dialogue between a rape victim who desperately reports what happened to her and a policeman who continuously interrupts her with requests for administrative details.
This passage from politics proper to neutral expert administration characterises our entire political process: strategic decisions based on power are more and more masked as administrative regulations based on neutral expert knowledge, and they are more and more negotiated in secrecy and enforced without democratic consultation. The struggle that goes on is the struggle for the European economic and political Leitkultur (the guiding culture). The EU powers stand for the technocratic status quo that has kept Europe in inertia for decades.
In his Notes Towards a Definition of Culture, the great conservative T S Eliot remarked that there are moments when the only choice is the one between heresy and non-belief, ie, when the only way to keep a religion alive is to perform a sectarian split from its main corpse. This is our position today with regard to Europe: only a new "heresy" (represented at this moment by Syriza) can save what is worth saving in European legacy: democracy, trust in people, egalitarian solidarity. The Europe that will win if Syriza is outmanoeuvred is a "Europe with Asian values" (which, of course, has nothing to do with Asia, but all with the clear and present tendency of contemporary capitalism to suspend democracy).
***
In western Europe we like to look on Greece as if we are detached observers who follow with compassion and sympathy the plight of the impoverished nation. Such a comfortable standpoint relies on a fateful illusion – what has been happening in Greece these past weeks concerns all of us; it is the future of Europe that is at stake. So when we read about Greece, we should always bear in mind that, as the old saying goes, de te fabula narrator (the name changed, the story applies to you).
An ideal is gradually emerging from the European establishment's reaction to the Greek referendum, the ideal best rendered by the headline of a recent Gideon Rachman column in the Financial Times: "Eurozone's weakest link is the voters".
In this ideal world, Europe gets rid of this "weakest link" and experts gain the power to directly impose necessary economic measures – if elections take place at all, their function is just to confirm the consensus of experts. The problem is that this policy of experts is based on a fiction, the fiction of "extend and pretend" (extending the payback period, but pretending that all debts will eventually be paid).
Why is the fiction so stubborn? It is not only that this fiction makes debt extension more acceptable to German voters; it is also not only that the write-off of the Greek debt may trigger similar demands from Portugal, Ireland, Spain. It is that those in power do not really want the debt fully repaid. The debt providers and caretakers of debt accuse the indebted countries of not feeling enough guilt – they are accused of feeling innocent. Their pressure fits perfectly what psychoanalysis calls "superego": the paradox of the superego is that, as Freud saw it, the more we obey its demands, the more guilty we feel.
Imagine a vicious teacher who gives to his pupils impossible tasks, and then sadistically jeers when he sees their anxiety and panic. The true goal of lending money to the debtor is not to get the debt reimbursed with a profit, but the indefinite continuation of the debt, keeping the debtor in permanent dependency and subordination. For most of the debtors – for there are debtors and debtors. Not only Greece but also the US will not be able even theoretically to repay its debt, as is now publicly recognised. So there are debtors who can blackmail their creditors because they cannot be allowed to fail (big banks), debtors who can control the conditions of their repayment (the US government) and, finally, debtors who can be pushed around and humiliated (Greece).
The debt providers and caretakers of debt basically accuse the Syriza government of not feeling enough guilt – they are accused of feeling innocent. That's what is so disturbing for the EU establishment about the Syriza government: that it admits debt, but without guilt. They got rid of the superego pressure. Varoufakis personified this stance in his dealings with Brussels: he fully acknowledged the weight of the debt, and he argued quite rationally that, since the EU policy obviously didn't work, another option should be found.
Paradoxically, the point Varoufakis and Tsipras have made repeatedly is that the Syriza government is the only chance for the debt providers to get at least part of their money back. Varoufakis himself wonders about the enigma of why banks were pouring money into Greece and collaborating with a clientelist state while knowing very well how things stood – Greece would never have got so heavily indebted without the connivance of the western establishment. The Syriza government is well aware that the main threat does not come from Brussels – it resides in Greece itself, a clientelist, corrupted state if ever there was one. What the EU bureaucracy should be blamed for is that, while it criticised Greece for its corruption and inefficiency, it supported the very political force (the New Democracy party) that embodied this corruption and inefficiency.
The Syriza government aims precisely at breaking this deadlock – see Varoufakis's programmatic declaration (published in the Guardian), which renders the ultimate strategic goal of the Syriza government:
A Greek or a Portuguese or an Italian exit from the eurozone would soon lead to a fragmentation of European capitalism, yielding a seriously recessionary surplus region east of the Rhine and north of the Alps, while the rest of Europe would be in the grip of vicious stagflation. Who do you think would benefit from this development? A progressive left, that will rise Phoenix-like from the ashes of Europe's public institutions? Or the Golden Dawn Nazis, the assorted neofascists, the xenophobes and the spivs? I have absolutely no doubt as to which of the two will do best from a disintegration of the eurozone. I, for one, am not prepared to blow fresh wind into the sails of this postmodern version of the 1930s. If this means that it is we, the suitably erratic Marxists, who must try to save European capitalism from itself, so be it. Not out of love for European capitalism, for the eurozone, for Brussels, or for the European Central Bank, but just because we want to minimise the unnecessary human toll from this crisis.
The financial politics of the Syriza government closely followed these guidelines: no deficit, tight discipline, more money raised through taxes. Some German media recently characterised Varoufakis as a psychotic who lives in his own universe different from ours – but is he so radical?
What is so enervating about Varoufakis is not his radicalism but his rational pragmatic modesty – if one looks closely at the proposals offered by Syriza, one cannot help noticing that they were once part of the standard moderate social-democratic agenda (in Sweden of the 1960s, the programme of the government was much more radical). It is a sad sign of our times that today you have to belong to a "radical" left to advocate these same measures – a sign of dark times, but also a chance for the left to occupy the space which, decades ago, was that of the moderate centre left.
But, perhaps, the endlessly repeated point about how modest Syriza's politics are, just good old social democracy, somehow misses its target – as if, if we repeat it often enough, the Eurocrats will finally realise we're not really dangerous and will help us. Syriza effectively is dangerous; it does pose a threat to the present orientation of the EU – today's global capitalism cannot afford a return to the old welfare state.
So there is something hypocritical in the reassurances about the modesty of what Syriza wants: in effect, it wants something that is not possible within the co-ordinates of the existing global system. A serious strategic choice will have to be made: what if the moment has come to drop the mask of modesty and openly advocate the much more radical change that is needed to secure even a modest gain?
Many critics of the Greek referendum claimed that it was a case of pure demagogic posturing, mockingly pointing out that it was not clear what the referendum was about. If anything, the referendum was not about the euro or the drachma, about Greece in the EU or outside it: the Greek government repeatedly emphasised its desire to remain in the EU and in the eurozone. Again, the critics automatically translated the key political question raised by the referendum into an administrative decision about particular economic measures.
***
In an interview with Bloomberg on 2 July, Varoufakis made clear the true stakes of the referendum. The choice was between the continuation of the EU politics of the past years that brought Greece to the edge of ruin – the fiction of "extend and pretend" (extending the payback period, but pretending that all debts will eventually be paid) – and a new, realist beginning that would no longer rely on such fictions, and would provide a concrete plan for how to start the actual recovery of the Greek economy.
Without such a plan, the crisis would just reproduce itself again and again. On the same day, even the IMF conceded that Greece needs large-scale debt relief to create "a breathing space" and get the economy moving (it proposes a 20-year moratorium on debt payments).
The No in the Greek referendum was thus much more than a simple choice between two different approaches to economic crisis. The Greek people have heroically resisted the despicable campaign of fear that mobilised the lowest instincts of self-preservation. They have seen through the brutal manipulation of their opponents, who falsely presented the referendum as a choice between euro and drachma, between Greece in Europe and "Grexit".
Their No was a No to the Eurocrats who prove daily that they are unable to drag Europe out of its inertia. It was a No to the continuation of business as usual; a desperate cry telling us all that things cannot go on the usual way. It was a decision for authentic political vision against the strange combination of cold technocracy and hot racist clichés about lazy, free-spending Greeks. It was a rare victory for principle against egotist and ultimately self-destructive opportunism. The No that won was a Yes to full awareness of the crisis in Europe; a Yes to the need to enact a new beginning.
It is now up to the EU to act. Will it be able to awaken from its self-satisfied inertia and understand the sign of hope delivered by the Greek people? Or will it unleash its wrath on Greece in order to be able to continue its dogmatic dream?
He rambles a bit here and there but makes a lot of salient points.
Of course it is ideological this is a political struggle over if individual nations are going to act in accordance with the interests of the union or attempt to swindle the others. Can the financial union function in a confederation setting? Can there be any trust here? The money is kind of beside the point. I think it goes both ways.
Quote from: Valmy on July 10, 2015, 11:23:59 AM
Of course it is ideological this is a political struggle over if individual nations are going to act in accordance with the interests of the union or attempt to swindle the others. Can the financial union function in a confederation setting? Can there be any trust here? The money is kind of beside the point. I think it goes both ways.
Governments should act in the interests of the governed. If the interests of "the union" are the interests of the governed, the government should also serve the interests of "the union," but only then. Talk about "swindl[ing] the others" is silly; the people who got swindled here are mostly the Greek citizens themselves (and only somewhat the citizens of the rest of Europe). Now I agree that the Greek citizens are not blameless, because they bought the swindle pretty readily for a long time, but neither are the citizens in most of the rest of Europe, who were also tolerant of the banks' end of the swindle.
As I have said, the best solution here is for Greece to exit the Euro (but not the EU) and get some breathing space and motivation for reform. If Grexit is a disaster for Greece, it's still better than the disaster of staying, and if it proves a boon to the Greeks and stimulates and Italian or Spanish desire to do the same, that's a win as well, because if the people of Italy or Spain are better off outside the Eurozone, their governments shouldn't work to keep them in.
The interests of "the union" should not be a consideration.
Quote from: grumbler on July 10, 2015, 03:33:39 PM
Quote from: Valmy on July 10, 2015, 11:23:59 AM
Of course it is ideological this is a political struggle over if individual nations are going to act in accordance with the interests of the union or attempt to swindle the others. Can the financial union function in a confederation setting? Can there be any trust here? The money is kind of beside the point. I think it goes both ways.
Governments should act in the interests of the governed. If the interests of "the union" are the interests of the governed, the government should also serve the interests of "the union," but only then. Talk about "swindl[ing] the others" is silly; the people who got swindled here are mostly the Greek citizens themselves (and only somewhat the citizens of the rest of Europe). Now I agree that the Greek citizens are not blameless, because they bought the swindle pretty readily for a long time, but neither are the citizens in most of the rest of Europe, who were also tolerant of the banks' end of the swindle.
As I have said, the best solution here is for Greece to exit the Euro (but not the EU) and get some breathing space and motivation for reform. If Grexit is a disaster for Greece, it's still better than the disaster of staying, and if it proves a boon to the Greeks and stimulates and Italian or Spanish desire to do the same, that's a win as well, because if the people of Italy or Spain are better off outside the Eurozone, their governments shouldn't work to keep them in.
The interests of "the union" should not be a consideration.
I agree.
Quote from: grumbler on July 10, 2015, 03:33:39 PM
[Talk about "swindl[ing] the others" is silly;
No because it is in each nation's interests to do what is best for them. In the context of a Union though that probably means taking as much advantage of it as possible as is politically feasible for your own benefit. Ultimately it is in their best interests to swindle.
QuoteThe interests of "the union" should not be a consideration.
Indeed. That is the problem.
Quote from: Valmy on July 10, 2015, 03:44:25 PM
No because it is in each nation's interests to do what is best for them. In the context of a Union though that probably means taking as much advantage of it as possible as is politically feasible for your own benefit. Ultimately it is in their best interests to swindle.
You have an interesting definition of "swindle," then. Might want to check to see if it isn't hampering your ability to communicate.
QuoteIndeed. That is the problem.
My point was that you should not only avoid claiming it as
the problem, you should eschew calling it
a problem. There is nothing whatsoever problematic about a government serving the genuine interests of the governed, even at the expense of the interests of some non-governmental body or organization.
Quote from: grumbler on July 11, 2015, 07:16:17 AM
You have an interesting definition of "swindle," then. Might want to check to see if it isn't hampering your ability to communicate.
Nonsense it completely applies.
Quote
My point was that you should not only avoid claiming it as the problem, you should eschew calling it a problem. There is nothing whatsoever problematic about a government serving the genuine interests of the governed, even at the expense of the interests of some non-governmental body or organization.
Well it can be a problem and be problematic because there are other people in the world that are not governed by that government.
Now normally we expect all the countries in the world to squabble without regards to each others interests but this is not that scenario. This 'organization' is a pact, a trust, an agreement where that nation is supposed to sacrifice some of its interests for the freely entered into agreement. So say a NATO member letting its military rot away is swindling its allies by doing something selfish for its benefit while taking advantage of the trust of the agreement. It is a con job. Similar dishonest and selfish manipulations can be done in any sort of alliance or trade pact or even a confederation. It is why we have a federal government managing interstate commerce.
Not to mention that fact that it may be to the governed's benefit to enslave people or conquer a neighboring nation. That can be problematic as well.
Quote from: grumbler on July 10, 2015, 03:33:39 PM
Quote from: Valmy on July 10, 2015, 11:23:59 AM
Of course it is ideological this is a political struggle over if individual nations are going to act in accordance with the interests of the union or attempt to swindle the others. Can the financial union function in a confederation setting? Can there be any trust here? The money is kind of beside the point. I think it goes both ways.
Governments should act in the interests of the governed. If the interests of "the union" are the interests of the governed, the government should also serve the interests of "the union," but only then. Talk about "swindl[ing] the others" is silly; the people who got swindled here are mostly the Greek citizens themselves (and only somewhat the citizens of the rest of Europe). Now I agree that the Greek citizens are not blameless, because they bought the swindle pretty readily for a long time, but neither are the citizens in most of the rest of Europe, who were also tolerant of the banks' end of the swindle.
As I have said, the best solution here is for Greece to exit the Euro (but not the EU) and get some breathing space and motivation for reform. If Grexit is a disaster for Greece, it's still better than the disaster of staying, and if it proves a boon to the Greeks and stimulates and Italian or Spanish desire to do the same, that's a win as well, because if the people of Italy or Spain are better off outside the Eurozone, their governments shouldn't work to keep them in.
The interests of "the union" should not be a consideration.
Well said.
Quote from: Valmy on July 11, 2015, 11:18:58 AM
Quote from: grumbler on July 11, 2015, 07:16:17 AM
You have an interesting definition of "swindle," then. Might want to check to see if it isn't hampering your ability to communicate.
Nonsense it completely applies.
Quote
My point was that you should not only avoid claiming it as the problem, you should eschew calling it a problem. There is nothing whatsoever problematic about a government serving the genuine interests of the governed, even at the expense of the interests of some non-governmental body or organization.
Well it can be a problem and be problematic because there are other people in the world that are not governed by that government.
Now normally we expect all the countries in the world to squabble without regards to each others interests but this is not that scenario. This 'organization' is a pact, a trust, an agreement where that nation is supposed to sacrifice some of its interests for the freely entered into agreement. So say a NATO member letting its military rot away is swindling its allies by doing something selfish for its benefit while taking advantage of the trust of the agreement. It is a con job. Similar dishonest and selfish manipulations can be done in any sort of alliance or trade pact or even a confederation. It is why we have a federal government managing interstate commerce.
Not to mention that fact that it may be to the governed's benefit to enslave people or conquer a neighboring nation. That can be problematic as well.
I think Greeks' interests actually coincide with that of the EU - Germany is the one working towards a solution that would ultimately lead to the EU's fragmentation.
The problem is that the EU was originally conceived as an exchange - it opened new markets for rich countries like Germany and the UK, but the trade-off was the obligation to help poorer countries, whether in the form of aid, or by taking their workers etc. Unfortunately, after the crisis, the rich countries have essentially forgot about that agreement and started to act egoistically while continuing to reap their side of the benefits (this is visible in both the attitude of Germany and the UK, though, obviously, each expresses it in a different manner).
The EU will die if egoism of the rich triumphs - because then countries like Greece or Poland really have no interest in staying in.
This is the point grumbler is making - Greek government has no legal or moral duty to serve the interests of Germany over its own people's.
In 1994, when we said "no", a lot of the criticism against the EU from the left was that it was a rich man's club. With almost all of Europe inside the EU, that kind of argument is invalid.
However, from a very selfish point of view, I'd vote no this time around because I don't feel like paying for Sothern Europe's inability to have nice things.
Quote from: Norgy on July 11, 2015, 03:22:47 PM
However, from a very selfish point of view, I'd vote no this time around because I don't feel like paying for Sothern Europe's inability to have nice things.
it's not selfish to not want your taxmoney disappearing in a bottomless hole. On the contrary: taxmoney should not be wasted. And shoveling money to places that don't (want to) reform is waste. It can be used elsewhere.
We had similar reservations about the Marshall Plan.
Quote from: Razgovory on July 11, 2015, 06:50:07 PM
We had similar reservations about the Marshall Plan.
Actually, I only think grumbler was born back then.
Quote from: Valmy on July 11, 2015, 11:18:58 AM
Well it can be a problem and be problematic because there are other people in the world that are not governed by that government.
Governments are not obliged to serve the interests of those governed by other governments; it is up to the other government to serve those interests. In fact, I would argue it is immoral to serve the interests of foreigners at the cost of the genuine interests of one's own governed.
QuoteNow normally we expect all the countries in the world to squabble without regards to each others interests but this is not that scenario. This 'organization' is a pact, a trust, an agreement where that nation is supposed to sacrifice some of its interests for the freely entered into agreement. So say a NATO member letting its military rot away is swindling its allies by doing something selfish for its benefit while taking advantage of the trust of the agreement. It is a con job. Similar dishonest and selfish manipulations can be done in any sort of alliance or trade pact or even a confederation. It is why we have a federal government managing interstate commerce.
I disagree again. A pact is useful so long as it serves the legitimate interests of the people of the nations maintaining that pact. Once the pact becomes destructive of these ends, it is the right (and duty) of the government to alter or to abolish it, and to institute a new pact, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect the safety and happiness of those they govern. Prudence, indeed, will dictate that pacts long established should not be changed for light and transient causes; and accordingly all experience hath shewn that nations are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the pacts to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce their interests, it is their right, it is their duty, to throw off such pacts, and to provide new guards for their future security.
QuoteNot to mention that fact that it may be to the governed's benefit to enslave people or conquer a neighboring nation. That can be problematic as well.
If it is in the genuine interests of the governed that the state be conquered, the government has the obligation to conquer them, neighboring or not. That is less problematic than willingly allowing the genuine interests of the governed to be harmed.
Quote from: grumbler on July 10, 2015, 03:33:39 PM
Quote from: Valmy on July 10, 2015, 11:23:59 AM
Of course it is ideological this is a political struggle over if individual nations are going to act in accordance with the interests of the union or attempt to swindle the others. Can the financial union function in a confederation setting? Can there be any trust here? The money is kind of beside the point. I think it goes both ways.
Governments should act in the interests of the governed. If the interests of "the union" are the interests of the governed, the government should also serve the interests of "the union," but only then. Talk about "swindl[ing] the others" is silly; the people who got swindled here are mostly the Greek citizens themselves (and only somewhat the citizens of the rest of Europe). Now I agree that the Greek citizens are not blameless, because they bought the swindle pretty readily for a long time, but neither are the citizens in most of the rest of Europe, who were also tolerant of the banks' end of the swindle.
As I have said, the best solution here is for Greece to exit the Euro (but not the EU) and get some breathing space and motivation for reform. If Grexit is a disaster for Greece, it's still better than the disaster of staying, and if it proves a boon to the Greeks and stimulates and Italian or Spanish desire to do the same, that's a win as well, because if the people of Italy or Spain are better off outside the Eurozone, their governments shouldn't work to keep them in.
The interests of "the union" should not be a consideration.
So, once the Union stopped acting in the interests of the southern states, seccession was the right thing to do? :yeahright:
Quote from: jimmy olsen on July 11, 2015, 11:22:51 PM
Quote from: grumbler on July 10, 2015, 03:33:39 PM
Quote from: Valmy on July 10, 2015, 11:23:59 AM
Of course it is ideological this is a political struggle over if individual nations are going to act in accordance with the interests of the union or attempt to swindle the others. Can the financial union function in a confederation setting? Can there be any trust here? The money is kind of beside the point. I think it goes both ways.
Governments should act in the interests of the governed. If the interests of "the union" are the interests of the governed, the government should also serve the interests of "the union," but only then. Talk about "swindl[ing] the others" is silly; the people who got swindled here are mostly the Greek citizens themselves (and only somewhat the citizens of the rest of Europe). Now I agree that the Greek citizens are not blameless, because they bought the swindle pretty readily for a long time, but neither are the citizens in most of the rest of Europe, who were also tolerant of the banks' end of the swindle.
As I have said, the best solution here is for Greece to exit the Euro (but not the EU) and get some breathing space and motivation for reform. If Grexit is a disaster for Greece, it's still better than the disaster of staying, and if it proves a boon to the Greeks and stimulates and Italian or Spanish desire to do the same, that's a win as well, because if the people of Italy or Spain are better off outside the Eurozone, their governments shouldn't work to keep them in.
The interests of "the union" should not be a consideration.
So, once the Union stopped acting in the interests of the southern states, seccession was the right thing to do? :yeahright:
Substitute "States" for "Nations" in the second paragraph of Grumbler's post above yours. It's interesting how it reads then with particular reference to the USA.
Quote from: jimmy olsen on July 11, 2015, 11:22:51 PM
So, once the Union stopped acting in the interests of the southern states, seccession was the right thing to do? :yeahright:
I'd argue that the Union stopped acting in the interests of the slaveowner minority.
Pretty much. It was in the interest of the Southern slave owning elite to leave - not in the interest of the people.
Grumbler is just spouting nonsense. In his world dishonesty is a moral imperative and no country should abide by it's obligations if it can cheat.
@iorm & mart. given the importance of slavery to the southern economies, protecting slavery (at that time) served those states' best interests. maybe not in the long run, but everyone suffers if you knock out a society's major economic system.
Quote from: Agelastus on July 12, 2015, 02:13:12 AMSubstitute "States" for "Nations" in the second paragraph of Grumbler's post above yours. It's interesting how it reads then with particular reference to the USA.
i don't think this comparison works because, unfortunately, the EU is not yet integrated enough to allow such a comparison. the EU government needs more control over its members to properly make that comparison. right now, as grumbler indicated, the EU is an organization and not a nation. until the EU states choose to integrate further, why would they have the same obligations as US states?
Quote from: LaCroix on July 12, 2015, 01:22:39 PM
@iorm & mart. given the importance of slavery to the southern economies, protecting slavery (at that time) served those states' best interests. maybe not in the long run, but everyone suffers if you knock out a society's major economic system.
I believe that is the standard von Misises libertarian stance, yes.
Quote from: LaCroix on July 12, 2015, 01:22:39 PM
@iorm & mart. given the importance of slavery to the southern economies, protecting slavery (at that time) served those states' best interests. maybe not in the long run, but everyone suffers if you knock out a society's major economic system.
Slavery served only the interests of the landed elite, and wasn't important at all to the southern economies. Cotton (and tobacco and sugar, to lesser extents) was, but there are no natural laws that say cotton can only be grown by slaves. Indeed, all of these crops is still grown today, 150 years after slavery was abolished, and were grown sans slaves in the South and elsewhere in the world in the antebellum years.
The South seceded because the Industrial Revolution threatened the interests of the landed elite. Political power in the South was based on economic power, and that was based on inheriting slaves (it was far too expensive to set up new plantations and buy enough slaves to run them; one had to essentially inherit them). When the IR made it clear that "new men" would eventually be able to become rich (it had already happened in the North, and was happening in the South to some extent), this threatened the political power of the landed elite and they took measure to disassociate with the North (and industrialization) while they still could. Slavery was just the means by which the Southern elites had created and maintained their political power. The South was fighting against industrialization more than "for" slavery.
Clearly, a war against industrialization isn't in the genuine interests of the typical southerner.
Quote from: grumbler on July 11, 2015, 09:29:27 PM
Quote from: Valmy on July 11, 2015, 11:18:58 AM
Well it can be a problem and be problematic because there are other people in the world that are not governed by that government.
Governments are not obliged to serve the interests of those governed by other governments; it is up to the other government to serve those interests. In fact, I would argue it is immoral to serve the interests of foreigners at the cost of the genuine interests of one's own governed.
I don't disagree with this at its basic level.
However, isn't the EU, to some extent, something of an expansion of the set of people being governed - in that it is an attempt to create a higher level of government to serve the overall interests better, and presumably adherence to the agreements around that "higher level" would presumably be in the long term interests of the more local governing bodies?
Could it fairly be said that to some extent, the EU, an organization Greece freely entered, is the governing body moreso (or at least in addition to) the Greek national government, and to some degree Greece, when it agreed to join the EU, was also agreeing that the people of Greece would give up some of their local governance and agree to more Europe wide governance?
This might be torturing the point a little bit, but is there an argument to be made that Greece's national government fully eschewing any concern for the interests of the citizens of the EU when it suits them is akin to a US state saying "Hey, we don't care what the Feds think, we are going to do what we think is best for the good people of Alabama, even if that means defying federal law or even the US Constitution!".
Quote from: Berkut on July 12, 2015, 08:09:14 PM
I don't disagree with this at its basic level.
However, isn't the EU, to some extent, something of an expansion of the set of people being governed - in that it is an attempt to create a higher level of government to serve the overall interests better, and presumably adherence to the agreements around that "higher level" would presumably be in the long term interests of the more local governing bodies?
Could it fairly be said that to some extent, the EU, an organization Greece freely entered, is the governing body moreso (or at least in addition to) the Greek national government, and to some degree Greece, when it agreed to join the EU, was also agreeing that the people of Greece would give up some of their local governance and agree to more Europe wide governance?
This might be torturing the point a little bit, but is there an argument to be made that Greece's national government fully eschewing any concern for the interests of the citizens of the EU when it suits them is akin to a US state saying "Hey, we don't care what the Feds think, we are going to do what we think is best for the good people of Alabama, even if that means defying federal law or even the US Constitution!".
The EU isn't the Eurozone, and I think that the interests of the Greek people wouldn't be best served by leaving the EU. If they
were best served by such a departure, though, I believe that it would be irresponsible of the Greek government to remain in the EU so that the interests of, say, the Belgians were served.
The EU isn't sovereign. The ECB isn't sovereign. Neither has the obligations to the citizens of member countries that their own national governments have. In the end, barring a few remaining monarchies, the people of each nation are sovereign within the nation's borders (and, tbh, I think the people are actually sovereign within even the monarchies, despite the legal forms). The comparison to US states isn't applicable. US states have only a very limited sovereignty which, since it is limited, isn't really sovereignty at all, only the fiction thereof. Greek sovereignty is no such fiction, though there are those who, for excellent reasons, would reduce it (and the sovereignty of all EU nations) to such.
The EU is more than a mere international organization. We are citizens of the EU and the EU certainly has obligations towards us. I wouldn't call it sovereign, but it certainly has been delegated sovereign powers for the time being by its member states, which ultimately remain sovereign in that they can withdraw from the EU and are the original entities of democratic legitimacy through their demos. The EU is a mix between a confederation and a federation, generally considered a political construct of its own.
The ECB is of course not sovereign, being just one of many institutions of the EU. It's independent from direct supervision though, but its general mandate and charter are subject to EU legislation.
Quote from: Zanza on July 13, 2015, 11:15:04 AM
The EU is more than a mere international organization. We are citizens of the EU and the EU certainly has obligations towards us. I wouldn't call it sovereign, but it certainly has been delegated sovereign powers for the time being by its member states, which ultimately remain sovereign in that they can withdraw from the EU and are the original entities of democratic legitimacy through their demos. The EU is a mix between a confederation and a federation, generally considered a political construct of its own.
The ECB is of course not sovereign, being just one of many institutions of the EU. It's independent from direct supervision though, but its general mandate and charter are subject to EU legislation.
Yeah, I think that is the important point. Although nations retain some degree of sovereignty on paper there is a significant amount of regulation at the EU level which creates a political entity at that more macro level and so long as nations remain within the organization they cede a significant amount of control to it. It follows then that the larger organization should make decisions for the good of the whole. Which is particularly difficult to define in circumstances like this.
Quote from: grumbler on July 12, 2015, 03:12:26 PM
The South seceded because the Industrial Revolution threatened the interests of the landed elite. Political power in the South was based on economic power, and that was based on inheriting slaves (it was far too expensive to set up new plantations and buy enough slaves to run them; one had to essentially inherit them). When the IR made it clear that "new men" would eventually be able to become rich (it had already happened in the North, and was happening in the South to some extent), this threatened the political power of the landed elite and they took measure to disassociate with the North (and industrialization) while they still could. Slavery was just the means by which the Southern elites had created and maintained their political power. The South was fighting against industrialization more than "for" slavery.
I think that's on over-simplification. The South wasn't fighting industrialization - the industrialization of the textile industry is what made cotton king and cemented the power of the plantation oligarchs. The Southern elite were deeply embedded in the emerging industrial capitalist system. What can be fairly said is that industrialization brought with it political and demographic ramifications in the North that were discomfiting to the South.
Also would not say that slavery was "just the means" for creating and maintaining power. It was that but much more. The institution shaped the entire culture, society and economy. One of the interesting things that Picketty and his collaborators did is quantify different components of wealth in the US. During the antebellum period, wealth in the form of bonded slaves was roughly equal to the value of the agricultural land in the US. Astonishing when you realize that slaves are found only in the South and even them concentrated in certain regions. So yes - concentrated wealth on that level was a formidable source of power but also an enormous vulnerability. The planter elite was chained to the slave system and the entire elaborate system of physical and cultural controls required to maintain it.
Quote from: Zanza on July 13, 2015, 11:15:04 AM
The EU is more than a mere international organization. We are citizens of the EU and the EU certainly has obligations towards us. I wouldn't call it sovereign, but it certainly has been delegated sovereign powers for the time being by its member states, which ultimately remain sovereign in that they can withdraw from the EU and are the original entities of democratic legitimacy through their demos. The EU is a mix between a confederation and a federation, generally considered a political construct of its own.
It's a tweener, a grab bag of kludge solutions.
That's OK it can work well in a pragmatic sense but not in the context of a large single currency bloc. At that point you either have to commit to deeper pooling of economic sovereignty, get off the pot, or be prepared for some bumpy rides.
Some choice things to say from Varoufakis. He is, obviously, not unbiased in this, but unless he is outright lying, some of the things he says are pretty damning for Germany and the Eurogroup.
QuoteExclusive: Yanis Varoufakis opens up about his five month battle to save Greece
In his first interview since resigning, Greece's former Finance Minister says the Eurogroup is "completely and utterly" controlled by Germany, Greece was "set up" and last week's referendum was wasted.
Greece has finally reached an agreement with its creditors. The specifics have not yet been published, but it is clear that the deal signed is more punitive and demanding than the one that its government has spent the past five months desperately trying to resist.
The accord follows 48 hours in which Germany demanded control of Greece's finances or its withdrawal from the euro. Many observers across Europe were stunned by the move. Yanis Varoufakis was not. When I spoke with Greece's former finance minister last week, I asked him whether any deal struck in the days ahead would be good for his country.
"If anything it will be worse," he said. "I trust and hope that our government will insist on debt restructuring, but I can't see how the German finance minister [Wolfgang Schäuble] is ever going to sign up to this. If he does, it will be a miracle."
It's a miracle the Greek people are likely to be waiting for a long time for. On Friday night, when Greece's parliament agreed to an austerity programme that voters had overwhelmingly rejected in a referendum five days earlier, a deal seemed imminent. A partial write-off of its debt owed to the so-called "Troika" – the IMF, the European Central bank and the European Commission – was unlikely but possible. Now, despite its government's capitulation, Greece has no debt relief and may yet be thrown out of the Eurozone.
Varoufakis, who resigned a week ago, has been criticised for not signing an agreement sooner, but he said the deal that Greece was offered was not made in good faith – or even one that the Troika wanted completed. In an hour-long telephone interview with the New Statesman, he called the creditors' proposals – those agreed to by the Athens government on Friday night, which now seem somehow generous – "absolutely impossible, totally non-viable and toxic ...[they were] the kind of proposals you present to another side when you don't want an agreement."
Varoufakis added: "This country must stop extending and pretending, we must stop taking on new loans pretending that we've solved the problem, when we haven't; when we have made our debt even less sustainable on condition of further austerity that even further shrinks the economy; and shifts the burden further onto the have-nots, creating a humanitarian crisis."
In Varoufakis's account, the Troika never genuinely negotiated during his five months as finance minister. He argued that Alexis Tsipras's Syriza government was elected to renegotiate an austerity programme that had clearly failed; over the past five years it has put a quarter of Greeks out of work, and created the worst depression anywhere in the developed world since the 1930s. But he thinks that Greece's creditors simply led him on.
A short-term deal could, Varoufakis said, have been struck soon after Syriza came to power in late January. "Three or four reforms" could have been agreed, and restrictions on liquidity eased by the ECB in return.
Instead, "The other side insisted on a 'comprehensive agreement', which meant they wanted to talk about everything. My interpretation is that when you want to talk about everything, you don't want to talk about anything." But a comprehensive agreement was impossible. "There were absolutely no [new] positions put forward on anything by them."
Varoufakis said that Schäuble, Germany's finance minister and the architect of the deals Greece signed in 2010 and 2012, was "consistent throughout". "His view was 'I'm not discussing the programme – this was accepted by the previous [Greek] government and we can't possibly allow an election to change anything.
"So at that point I said 'Well perhaps we should simply not hold elections anymore for indebted countries', and there was no answer. The only interpretation I can give [of their view] is, 'Yes, that would be a good idea, but it would be difficult. So you either sign on the dotted line or you are out.'"
It is well known that Varoufakis was taken off Greece's negotiating team shortly after Syriza took office; he was still in charge of the country's finances but no longer in the room. It's long been unclear why. In April, he said vaguely that it was because "I try and talk economics in the Eurogroup" – the club of 19 finance ministers whose countries use the Euro – "which nobody does." I asked him what happened when he did.
"It's not that it didn't go down well – there was point blank refusal to engage in economic arguments. Point blank. You put forward an argument that you've really worked on, to make sure it's logically coherent, and you're just faced with blank stares. It is as if you haven't spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you'd have got the same reply."
This weekend divisions surfaced within the Eurogroup, with countries split between those who seemed to want a "Grexit" and those demanding a deal. But Varoufakis said they were always been united in one respect: their refusal to renegotiate.
"There were people who were sympathetic at a personal level, behind closed doors, especially from the IMF." He confirmed that he was referring to Christine Lagarde, the IMF director. "But then inside the Eurogroup [there were] a few kind words and that was it: back behind the parapet of the official version. ... Very powerful figures look at you in the eye and say 'You're right in what you're saying, but we're going to crunch you anyway'."
Varoufakis was reluctant to name individuals, but added that the governments that might have been expected to be the most sympathetic towards Greece were actually their "most energetic enemies". He said that the "greatest nightmare" of those with large debts – the governments of countries like Portugal, Spain, Italy and Ireland – "was our success". "Were we to succeed in negotiating a better deal, that would obliterate them politically: they would have to answer to their own people why they didn't negotiate like we were doing."
He suggested that Greece's creditors had a strategy to keep his government busy and hopeful of a compromise, but in reality they were slowly suffering and eventually desperate.
"They would say we need all your data on the fiscal path on which Greek finds itself, all the data on state-owned enterprises. So we spent a lot of time trying to provide them with it and answering questionnaires and having countless meetings.
"So that would be the first phase. The second phase was they'd ask us what we intended to do on VAT. They would then reject our proposal but wouldn't come up with a proposal of their own. And then, before we would get a chance to agree on VAT, they would shift to another issue, like privatisation. They would ask what we want to do about privatisation: we put something forward, they would reject it. Then they'd move onto another topic, like pensions, from there to product markets, from there to labour relations. ... It was like a cat chasing its own tail."
His conclusion was succinct. "We were set up."
And he was adamant about who is responsible. I asked whether German attitudes control the outlook of the Eurogroup. Varoufakis went further. "Oh completely and utterly. Not attitudes – the finance minister of Germany. It is all like a very well-tuned orchestra and he is the director.
"Only the French minister [Michel Sapin] made noises that were different from the German line, and those noises were very subtle. You could sense he had to use very judicious language, to be seen not to oppose. And in the final analysis, when Dr Schäuble responded and effectively determined the official line, the French minister would always fold."
If Schäuble was the unrelenting enforcer, the German chancellor Angela Merkel presented a different face. While Varoufakis never dealt with her, he said, "From my understanding, she was very different. She tried to placate the Prime Minister [Tsipras] – she said 'We'll find a solution, don't worry about it, I won't let anything awful happen, just do your homework and work with the institutions, work with the Troika; there can be no dead end here.'"
The divide seems to have been brief, and perhaps even deliberate. Varoufakis thinks that Merkel and Schäuble's control over the Eurogroup is absolute, and that the group itself is beyond the law.
Days before Varoufakis's resignation on 6 July, when Tsipras called the referendum on the Eurogroup's belated and effectively unchanged offer, the Eurogroup issued a communiqué without Greek consent. This was against Eurozone convention. The move was quietly criticised by some in the press before being overshadowed by the build-up to the referendum, but Varoufakis considered it pivotal.
When Jeroen Dijsselbloem, the European Council President, tried to issue the communiqué without him, Varoufakis consulted Eurogroup clerks – could Dijsselbloem exclude a member state? The meeting was briefly halted. After a handful of calls, a lawyer turned to him and said, "Well, the Eurogroup does not exist in law, there is no treaty which has convened this group."
"So," Varoufakis said, "What we have is a non-existent group that has the greatest power to determine the lives of Europeans. It's not answerable to anyone, given it doesn't exist in law; no minutes are kept; and it's confidential. No citizen ever knows what is said within . . . These are decisions of almost life and death, and no member has to answer to anybody."
Events this weekend seem to support Varoufakis' account. On Saturday evening, a memo leaked that showed Germany was suggesting Greece should take a "timeout" from the Eurozone. By the end of the day, Schäuble's recommendation was the conclusion of the Eurogroup's statement. It's unclear how that happened; the body operates in secret. While Greeks hung on reports of their fate this weekend, no minutes were released from any meetings.
The referendum of 5 July has also been rapidly forgotten. It was preemptively dismissed by the Eurozone, and many people saw it as a farce – a sideshow that offered a false choice and created false hope, and was only going to ruin Tsipras when he later signed the deal he was campaigning against. As Schäuble supposedly said, elections cannot be allowed to change anything. But Varoufakis believes that it could have changed everything. On the night of the referendum he had a plan, Tsipras just never quite agreed to it.
The Eurozone can dictate terms to Greece because it is no longer fearful of a Grexit. It is convinced that its banks are now protected if Greek banks default. But Varoufakis thought that he still had some leverage: once the ECB forced Greece's banks to close, he could act unilaterally.
He said he spent the past month warning the Greek cabinet that the ECB would close Greece's banks to force a deal. When they did, he was prepared to do three things: issue euro-denominated IOUs; apply a "haircut" to the bonds Greek issued to the ECB in 2012, reducing Greece's debt; and seize control of the Bank of Greece from the ECB.
None of the moves would constitute a Grexit but they would have threatened it. Varoufakis was confident that Greece could not be expelled by the Eurogroup; there is no legal provision for such a move. But only by making Grexit possible could Greece win a better deal. And Varoufakis thought the referendum offered Syriza the mandate they needed to strike with such bold moves – or at least to announce them.
He hinted at this plan on the eve of the referendum, and reports later suggested this was what cost him his job. He offered a clearer explanation.
As the crowds were celebrating on Sunday night in Syntagma Square, Syriza's six-strong inner cabinet held a critical vote. By four votes to two, Varoufakis failed to win support for his plan, and couldn't convince Tsipras. He had wanted to enact his "triptych" of measures earlier in the week, when the ECB first forced Greek banks to shut. Sunday night was his final attempt. When he lost his departure was inevitable.
"That very night the government decided that the will of the people, this resounding 'No', should not be what energised the energetic approach [his plan]. Instead it should lead to major concessions to the other side: the meeting of the council of political leaders, with our Prime Minister accepting the premise that whatever happens, whatever the other side does, we will never respond in any way that challenges them. And essentially that means folding. ... You cease to negotiate."
Varoufakis's resignation brought an end to a four-and-a-half year partnership with Tsipras, a man he met for the first time in late 2010. An aide to Tsipras had sought him out after his criticisms of George Papandreou's government, which accepted the first Troika bailout in 2010.
"He [Tsipras] wasn't clear back then what his views were, on the drachma versus the euro, on the causes of the crises, and I had very, well shall I say, 'set views' on what was going on. A dialogue begun ... I believe that I helped shape his views of what should be done."
And yet Tsipras diverged from him at the last. He understands why. Varoufakis could not guarantee that a Grexit would work. After Syriza took power in January, a small team had, "in theory, on paper," been thinking through how it might. But he said that, "I'm not sure we would manage it, because managing the collapse of a monetary union takes a great deal of expertise, and I'm not sure we have it here in Greece without the help of outsiders." More years of austerity lie ahead, but he knows Tsipras has an obligation to "not let this country become a failed state".
Their relationship remains "extremely amicable", he said, although when we spoke on Thursday, they hadn't talked all week.
Despite failing to strike a new deal, Varoufakis does not seem disappointed. He told me he is "on top of the world."
"I no longer have to live through this hectic timetable," he said, "which was absolutely inhuman, just unbelievable. I was on two hours sleep every day for five months. ... I'm also relieved I don't have to sustain any longer this incredible pressure to negotiate for a position I find difficult to defend."
His relief is unsurprising. Varoufakis was appointed to negotiate with a Europe that didn't want to talk, no longer feared a "Grexit" and effectively controlled the Greek treasury's bank accounts. Many commentators think he was foolish, and the local and foreign journalists I met last week in Athens spoke of him as if he was a criminal. Some people will never forgive him for strangling a nascent recovery by reopening negotiations. And others will blame him for whichever harsh fate awaits Greece this week.
But Varoufakis seemed unconcerned. Throughout our conversation he never raised his voice. He came across as imperturbably calm, and often chuckled. His conservation wasn't tinged with regret; he appears to be treating the loss of power as ambivalently as he treated its acquisition.
Now he will remain an MP and continue to play a role in Syriza. He will also return to a half-finished book on the crisis, mull the new offers publishers have already begun to send him, and may return to the University of Athens in some capacity after two years teaching in Texas.
By resigning and not signing a deal he abhorred, he has kept both his conscience free and his reputation intact. His country remains locked in a trap he spent years opposing and months fighting, but he has escaped.
http://www.newstatesman.com/world-affairs/2015/07/exclusive-yanis-varoufakis-opens-about-his-five-month-battle-save-greece7
Thank God it's not 1975, or Greece would likely go Red or fall into civil war. <_<
Quote from: Razgovory on July 14, 2015, 01:24:02 AM
Thank God it's not 1975, or Greece would likely go Red or fall into civil war. <_<
It can still go "Putin".
QuoteVaroufakis said that Schäuble, Germany's finance minister and the architect of the deals Greece signed in 2010 and 2012, was "consistent throughout". "His view was 'I'm not discussing the programme – this was accepted by the previous [Greek] government and we can't possibly allow an election to change anything.
"So at that point I said 'Well perhaps we should simply not hold elections anymore for indebted countries', and there was no answer. The only interpretation I can give [of their view] is, 'Yes, that would be a good idea, but it would be difficult. So you either sign on the dotted line or you are out.'"
This is just silly. Conditional bailouts are backloaded. You get the money up front and you're supposed to live up to your end of the bargain later. Elections don't mean you don't have to do what you promised.
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
Quote from: jimmy olsen on July 14, 2015, 03:20:05 AM
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
So every time the US holds an election and a different party comes to power, it may renegotiate all of its treaties, including UN and NATO membership, NAFTA, WTO etc? I think there is a reasonable expectation that governments will honour the agreements made by previous administrations.
Quote from: jimmy olsen on July 14, 2015, 03:20:05 AM
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
And then be prepared to face the consequences for lack of fair play.
Quote from: garbon on July 14, 2015, 03:27:59 AM
Quote from: jimmy olsen on July 14, 2015, 03:20:05 AM
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
And then be prepared to face the consequences for lack of fair play.
Aye, too often "freedom of xxx" is understood as "freedom from the consequences of doing xxx".
Greece can always walk away from the deal. They probably should, in my (really humble) opinion.
Quote from: Monoriu on July 14, 2015, 03:27:57 AM
Quote from: jimmy olsen on July 14, 2015, 03:20:05 AM
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
So every time the US holds an election and a different party comes to power, it may renegotiate all of its treaties, including UN and NATO membership, NAFTA, WTO etc? I think there is a reasonable expectation that governments will honour the agreements made by previous administrations.
That would be counter-productive to effectively renegotiate everything but you can easily do so if you want. The tories won elections in the UK and want to renegotiate the EU treaty or even leave altogether. French government, after elections in the 1950s, suspended their participation in NATO for a while. Bush administration made a deal with Poland about the anti-missile shield and Obama withdrew from it. Examples are endless.
Quote from: garbon on July 14, 2015, 03:27:59 AM
Quote from: jimmy olsen on July 14, 2015, 03:20:05 AM
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
And then be prepared to face the consequences for lack of fair play.
But again, this is more the sign of Greece's weakness than any lack of "fair play" - powerful countries withdraw from treaties and renege on deals all the time and they are very rarely punished for it.
But in any case, this is apples and oranges. Even if "pacta sunt servanda" applies to sovereign states, it only applies to treaties with other sovereigns. A loan is not a treaty.
If Greece treasures its sovereignty so much, it should avoid putting itself in a position where it depends on the generosity of others for its survival. Hong Kong amasses a large cash reserve and keeps our budgets balanced because we don't want to depend on London or Beijing under any circumstances. We treasure our financial independence and don't want to give our sovereigns the chance to take over. This of course comes at a cost. It means we don't have a public pension system at all and some of our old have to go through rubbish to look for food. Greece took a different path. It chose to give the pensioners a good life, and much more. The cost is that when financial crisis happen, it will need help, and the people who provide such help will have say over public policy.
Quote from: celedhring on July 14, 2015, 03:33:10 AM
Quote from: garbon on July 14, 2015, 03:27:59 AM
Quote from: jimmy olsen on July 14, 2015, 03:20:05 AM
Quote from: Admiral Yi on July 14, 2015, 01:49:23 AM
Elections don't mean you don't have to do what you promised.
That's an absurd statement. In a fully sovereign state an election can cause a state to break any promise, even those concerning war and peace, let alone debt repayment.
And then be prepared to face the consequences for lack of fair play.
Aye, too often "freedom of xxx" is understood as "freedom from the consequences of doing xxx".
Greece can always walk away from the deal. They probably should, in my (really humble) opinion.
:yes:
Quote from: Monoriu on July 14, 2015, 03:47:37 AM
If Greece treasures its sovereignty so much, it should avoid putting itself in a position where it depends on the generosity of others for its survival. Hong Kong amasses a large cash reserve and keeps our budgets balanced because we don't want to depend on London or Beijing under any circumstances. We treasure our financial independence and don't want to give our sovereigns the chance to take over. This of course comes at a cost. It means we don't have a public pension system at all and some of our old have to go through rubbish to look for food. Greece took a different path. It chose to give the pensioners a good life, and much more. The cost is that when financial crisis happen, it will need help, and the people who provide such help will have say over public policy.
It's really idiotic to compare a city state to a country.
Quote from: Martinus on July 14, 2015, 04:08:10 AM
It's really idiotic to compare a city state to a country.
I don't think so. Greece with 11 million people aren't that much larger than us with 7 million people. Hong Kong has complete financial independence and we don't give or take money from Beijing. Actually, we now have more say over our finances than they have over theirs. We use a currency board system where the exchange rate with US dollars is fixed. So the US Federal Reserve in effect has complete control over our monetary policy. This is similar to Greece in that we both don't have our own central bank and we have no control over our exchange rates. We weathered all financial storms in recent decades without the need to ask for help, and there is a reason for that.
Mono, socialists, especially class-guilt ridden rich socialist like Marty are desperate to prove that Greece is the victim, because any other conclusion proves their world view wrong. Greece is bankrupt because it put short term financial interests of the people above all other considerations. Moreover they had been doing a maxed-out version of "take loans and dump them into circulation. So the economy could flourish" economic model for about 30 years, and it utterly failed, like it did during he same timeframe in the Eastern bloc during the second half of the Cold War. Greece stands as proof of the unsustainability of the views and dreams f the European left, and this is why they really want to spin this story around
Quote from: Monoriu on July 14, 2015, 04:12:03 AM
Quote from: Martinus on July 14, 2015, 04:08:10 AM
It's really idiotic to compare a city state to a country.
I don't think so. Greece with 11 million people aren't that much larger than us with 7 million people. Hong Kong has complete financial independence and we don't give or take money from Beijing. Actually, we now have more say over our finances than they have over theirs. We use a currency board system where the exchange rate with US dollars is fixed. So the US Federal Reserve in effect has complete control over our monetary policy. This is similar to Greece in that we both don't have our own central bank and we have no control over our exchange rates. We weathered all financial storms in recent decades without the need to ask for help, and there is a reason for that.
Yes the main reason being that it is a tax haven.
Quote from: Martinus on July 14, 2015, 05:14:55 AM
Yes the main reason being that it is a tax haven.
If it is that easy, what stops Greece from becoming one to solve all its problems overnight?
HK is a tax haven, true. But there are a lot of reasons why HK's public finances are so much stronger. According to this article, Greece spends a whopping 16.2% of its GDP on pensions.
http://www.greece.com/news/9913/Greece_spends_162_pct_of_GDP_on_pensions.html
QuoteThe EU report notes that of all 28 member-states, Greece spends the highest proportion of its gross domestic product on pensions, amounting to 16.2 percent.
I have said it before and I will say it again. Hong Kong does not have a public pension system. That's 16.2% of GDP saved right there.
It's not really saved unless you off old folks ala Logan's Run. I'm guessing family helps them out.
Personally I prefer pensions (although I'd rather have them be contributory, rather than distributive).
(https://i.imgur.com/35zxBKg.png)
Quote from: Iormlund on July 14, 2015, 06:28:07 AM
It's not really saved unless you off old folks ala Logan's Run. I'm guessing family helps them out.
Personally I prefer pensions (although I'd rather have them be contributory, rather than distributive).
Some folks have families, yes. But not everybody does. A lot of people actually *drumroll* save for their retirement when they are young.
Quote from: The Minsky Moment on July 13, 2015, 07:12:56 PM
I think that's on over-simplification. The South wasn't fighting industrialization - the industrialization of the textile industry is what made cotton king and cemented the power of the plantation oligarchs. The Southern elite were deeply embedded in the emerging industrial capitalist system. What can be fairly said is that industrialization brought with it political and demographic ramifications in the North that were discomfiting to the South.
Also would not say that slavery was "just the means" for creating and maintaining power. It was that but much more. The institution shaped the entire culture, society and economy. One of the interesting things that Picketty and his collaborators did is quantify different components of wealth in the US. During the antebellum period, wealth in the form of bonded slaves was roughly equal to the value of the agricultural land in the US. Astonishing when you realize that slaves are found only in the South and even them concentrated in certain regions. So yes - concentrated wealth on that level was a formidable source of power but also an enormous vulnerability. The planter elite was chained to the slave system and the entire elaborate system of physical and cultural controls required to maintain it.
I liked my wording of this argument better. :P
Quote from: Tamas on July 14, 2015, 04:21:52 AM
Mono, socialists, especially class-guilt ridden rich socialist like Marty are desperate to prove that Greece is the victim, because any other conclusion proves their world view wrong. Greece is bankrupt because it put short term financial interests of the people above all other considerations. Moreover they had been doing a maxed-out version of "take loans and dump them into circulation. So the economy could flourish" economic model for about 30 years, and it utterly failed, like it did during he same timeframe in the Eastern bloc during the second half of the Cold War. Greece stands as proof of the unsustainability of the views and dreams f the European left, and this is why they really want to spin this story around
:lol: Talk about projecting.
Quote from: Monoriu on July 14, 2015, 04:12:03 AM
Quote from: Martinus on July 14, 2015, 04:08:10 AM
It's really idiotic to compare a city state to a country.
I don't think so. Greece with 11 million people aren't that much larger than us with 7 million people. Hong Kong has complete financial independence and we don't give or take money from Beijing. Actually, we now have more say over our finances than they have over theirs. We use a currency board system where the exchange rate with US dollars is fixed. So the US Federal Reserve in effect has complete control over our monetary policy. This is similar to Greece in that we both don't have our own central bank and we have no control over our exchange rates. We weathered all financial storms in recent decades without the need to ask for help, and there is a reason for that.
You still haven't have seemed to grasp that Hong Kong is in a rather different situation then Greece. Let's use one very simple example: How many miles of roads do you think Hong Kong needs to maintain? How many miles of roads do you think Greece has to maintain?
Quote from: Tamas on July 14, 2015, 04:21:52 AM
Greece stands as proof of the unsustainability of the views and dreams f the European left, and this is why they really want to spin this story around
No, it doesn't. It stands as a very good example of why former Ottoman/Byzantine possessions can't have nice things.
The lack of trust between the classes, between state and the governed and Greece's relatively recent discovery of modern democracy are parts of an inheritance that no banker ever would know about.
Clientilism is alive and well several places in Europe. Both the PASOK and New Democracy pandered to their bases when elected.
I think most European leftists want something like Scandinavian social democracy. While the model has small flaws, I doubt you'll find better run governments or better societies than Sweden, Denmark and Norway.
Quote from: Monoriu on July 14, 2015, 03:47:37 AM
If Greece treasures its sovereignty so much, it should avoid putting itself in a position where it depends on the generosity of others for its survival. Hong Kong amasses a large cash reserve and keeps our budgets balanced because we don't want to depend on London or Beijing under any circumstances.
It is indeed fortunate for HK that it is safe from interference from Beijing.
http://www.nasdaq.com/article/frances-hollande-eurozone-should-have-its-own-budget-parliament-20150714-00436
QuoteFrance's Hollande: Eurozone Should Have Its Own Budget, Parliament
PARIS--French President Francois Hollande said Tuesday he will make proposals for a eurozone government, after Greece came close to exiting the currency bloc in tense negotiations between European heads of state at the weekend.
In a television interview on France's Bastille Day holiday, Mr. Hollande said he will make a joint proposal with Germany to improve how the eurozone is governed.
"There must be an economic government for the eurozone," Mr. Hollande said.
The next step would be to create a budget for the eurozone and, ultimately, a parliament, he added.
That would suck - Europe of Two Speeds.
Quote from: Martinus on July 14, 2015, 10:04:45 AM
That would suck - Europe of Two Speeds.
You had that the moment the Euro was introduced in part of the EU.
Quote from: Razgovory on July 14, 2015, 09:47:02 AM
You still haven't have seemed to grasp that Hong Kong is in a rather different situation then Greece. Let's use one very simple example: How many miles of roads do you think Hong Kong needs to maintain? How many miles of roads do you think Greece has to maintain?
Of course Greece is larger than HK, but it isn't that large when compared with the others. I do not believe that road maintanence is what bankrupted Greece. If it is, the EU deal will, well, deal with it. No, it isn't the size of the country. It is the people. The people and the government chose to have good welfare, more welfare than it could sustain. It consciously chose short term gratification rather than putting money aside for the rainy day. And when the rainy day comes, it expects unconditional help from its neighbours. When the help came with strings attached, it called people names.
I am saying there is another way. If you don't want help, don't spend more money than you can afford. In fact you should put money aside. It is possible. We don't have a public pension system, and we have loads of cash on hand. They made their choice. Can't have it both ways.
Quote from: The Minsky Moment on July 14, 2015, 10:03:33 AM
Quote from: Monoriu on July 14, 2015, 03:47:37 AM
If Greece treasures its sovereignty so much, it should avoid putting itself in a position where it depends on the generosity of others for its survival. Hong Kong amasses a large cash reserve and keeps our budgets balanced because we don't want to depend on London or Beijing under any circumstances.
It is indeed fortunate for HK that it is safe from interference from Beijing.
I know what you are saying. Can you imagine what it would be like if we needed Beijing to bail us out in 08/09?
Quote from: Syt on July 14, 2015, 10:07:18 AM
Quote from: Martinus on July 14, 2015, 10:04:45 AM
That would suck - Europe of Two Speeds.
You had that the moment the Euro was introduced in part of the EU.
Yes. Lets create a proper super-state from the willing euro members, and have the rest be tagging along as free trade partners, and stop this mid-way nonesense.
Quote from: Monoriu on July 14, 2015, 10:08:34 AM
Quote from: Razgovory on July 14, 2015, 09:47:02 AM
You still haven't have seemed to grasp that Hong Kong is in a rather different situation then Greece. Let's use one very simple example: How many miles of roads do you think Hong Kong needs to maintain? How many miles of roads do you think Greece has to maintain?
Of course Greece is larger than HK, but it isn't that large when compared with the others. I do not believe that road maintanence is what bankrupted Greece. If it is, the EU deal will, well, deal with it. No, it isn't the size of the country. It is the people. The people and the government chose to have good welfare, more welfare than it could sustain. It consciously chose short term gratification rather than putting money aside for the rainy day. And when the rainy day comes, it expects unconditional help from its neighbours. When the help came with strings attached, it called people names.
I am saying there is another way. If you don't want help, don't spend more money than you can afford. In fact you should put money aside. It is possible. We don't have a public pension system, and we have loads of cash on hand. They made their choice. Can't have it both ways.
Hong Kong doesn't need to pay nearly as much infrastructure as even a fairly small country. Urban areas tend to produce large amounts revenue while rural ares do not. Not only that but the infrastructure of a rural area tends to cost more. Comparing an entropot city state to a nation is absurd.
Quote from: Razgovory on July 14, 2015, 10:19:24 AM
Hong Kong doesn't need to pay nearly as much infrastructure as even a fairly small country. Urban areas tend to produce large amounts revenue while rural ares do not. Not only that but the infrastructure of a rural area tends to cost more. Comparing an entropot city state to a nation is absurd.
:lol: We are in the process of building one of the most expensive railways in the world, on a per mile basis. According to your logic there is no need to make any cross-jurisdiction comparisons as everybody is different. You just don't want to admit that it is possible to pile up money and deny welfare to the population.
There are plenty of countries of the size and budget of Greece that have managed to not spend themselves into bankruptcy. Hong Kong might not be a good comparison, but the point Mono is making is perfectly valid.
This is just another iteration of "too big too fail" where bad decisions that fuck everyone are made in the full knowledge that they will have terrible outcomes in the long run - but fuck it, let the people who will be in power then deal with it, we don't care.
Quote from: Syt on July 14, 2015, 10:07:18 AM
Quote from: Martinus on July 14, 2015, 10:04:45 AM
That would suck - Europe of Two Speeds.
You had that the moment the Euro was introduced in part of the EU.
Which is why the EU won't become a real federation. If the ACW was fought over states' rights, we have about two millennia of states' rights warfare behind us in Europe.
For being Eurasia's limp dick, Europe is fairly complex and heterogenous still.
Quote from: Monoriu on July 14, 2015, 10:26:32 AM
Quote from: Razgovory on July 14, 2015, 10:19:24 AM
Hong Kong doesn't need to pay nearly as much infrastructure as even a fairly small country. Urban areas tend to produce large amounts revenue while rural ares do not. Not only that but the infrastructure of a rural area tends to cost more. Comparing an entropot city state to a nation is absurd.
:lol: We are in the process of building one of the most expensive railways in the world, on a per mile basis. According to your logic there is no need to make any cross-jurisdiction comparisons as everybody is different. You just don't want to admit that it is possible to pile up money and deny welfare to the population.
I would question comparing a city to a nation. It's absurd. Infrastructure, services, bureaucracy cost a great deal more when you expand them to rural ares. I'm a bit surprised that you of all people consider paying government employees a form of "welfare".
Quote from: Berkut on July 14, 2015, 10:29:27 AM
There are plenty of countries of the size and budget of Greece that have managed to not spend themselves into bankruptcy. Hong Kong might not be a good comparison, but the point Mono is making is perfectly valid.
This is just another iteration of "too big too fail" where bad decisions that fuck everyone are made in the full knowledge that they will have terrible outcomes in the long run - but fuck it, let the people who will be in power then deal with it, we don't care.
I cant think of any other Euro countries that have suffered such a significant drop in GDP over such a short period of time. Is there a good comparator?
Quote from: Berkut on July 14, 2015, 10:29:27 AM
There are plenty of countries of the size and budget of Greece that have managed to not spend themselves into bankruptcy. Hong Kong might not be a good comparison, but the point Mono is making is perfectly valid.
This is just another iteration of "too big too fail" where bad decisions that fuck everyone are made in the full knowledge that they will have terrible outcomes in the long run - but fuck it, let the people who will be in power then deal with it, we don't care.
It should be remembered that it was the crash in 2008, that actually bankrupted the country. It may have gone bankrupt anyway, but the crash brought it down, along with quite a few other countries. Oddly many of them small countries with small economies.
Quote from: Syt on July 14, 2015, 10:03:33 AM
http://www.nasdaq.com/article/frances-hollande-eurozone-should-have-its-own-budget-parliament-20150714-00436
QuoteFrance's Hollande: Eurozone Should Have Its Own Budget, Parliament
PARIS--French President Francois Hollande said Tuesday he will make proposals for a eurozone government, after Greece came close to exiting the currency bloc in tense negotiations between European heads of state at the weekend.
In a television interview on France's Bastille Day holiday, Mr. Hollande said he will make a joint proposal with Germany to improve how the eurozone is governed.
"There must be an economic government for the eurozone," Mr. Hollande said.
The next step would be to create a budget for the eurozone and, ultimately, a parliament, he added.
Wait, what? The French have been the biggest obstacle for further integration.
Also I love how he proposes to create a government and a budget
before a parliament. :bash:
Quote from: Razgovory on July 14, 2015, 10:45:10 AM
Quote from: Berkut on July 14, 2015, 10:29:27 AM
There are plenty of countries of the size and budget of Greece that have managed to not spend themselves into bankruptcy. Hong Kong might not be a good comparison, but the point Mono is making is perfectly valid.
This is just another iteration of "too big too fail" where bad decisions that fuck everyone are made in the full knowledge that they will have terrible outcomes in the long run - but fuck it, let the people who will be in power then deal with it, we don't care.
It should be remembered that it was the crash in 2008, that actually bankrupted the country. It may have gone bankrupt anyway, but the crash brought it down, along with quite a few other countries. Oddly many of them small countries with small economies.
Oddly many run by parties with neo-liberal agendas too. Like Iceland and Ireland. While it may be a spurious connection, there is that.
However, Clinton is the one to blame for all this shit. <_<
Quote from: crazy canuck on July 14, 2015, 10:41:39 AM
Quote from: Berkut on July 14, 2015, 10:29:27 AM
There are plenty of countries of the size and budget of Greece that have managed to not spend themselves into bankruptcy. Hong Kong might not be a good comparison, but the point Mono is making is perfectly valid.
This is just another iteration of "too big too fail" where bad decisions that fuck everyone are made in the full knowledge that they will have terrible outcomes in the long run - but fuck it, let the people who will be in power then deal with it, we don't care.
I cant think of any other Euro countries that have suffered such a significant drop in GDP over such a short period of time. Is there a good comparator?
Th Baltics experienced even worse drop of GDP all within a year, as a result of frontloading cuts. The differences are marked between both scenarios, though: smaller size, excellent timing of cuts, small financial sector, no prior debt from the Soviet era, private rather than public debt, much better (and trusted) governance ...
Quote from: Iormlund on July 14, 2015, 10:56:05 AM
Quote from: crazy canuck on July 14, 2015, 10:41:39 AM
Quote from: Berkut on July 14, 2015, 10:29:27 AM
There are plenty of countries of the size and budget of Greece that have managed to not spend themselves into bankruptcy. Hong Kong might not be a good comparison, but the point Mono is making is perfectly valid.
This is just another iteration of "too big too fail" where bad decisions that fuck everyone are made in the full knowledge that they will have terrible outcomes in the long run - but fuck it, let the people who will be in power then deal with it, we don't care.
I cant think of any other Euro countries that have suffered such a significant drop in GDP over such a short period of time. Is there a good comparator?
Th Baltics experienced even worse drop of GDP all within a year, as a result of frontloading cuts. The differences are marked between both scenarios, though: smaller size, excellent timing of cuts, small financial sector, no prior debt from the Soviet era, private rather than public debt, much better (and trusted) governance ...
The key difference, of course, was that neither of them joined the Euro until after the crisis. So they could run very high inflation to get out of the domestic debt.
Quote from: Martinus on July 14, 2015, 10:58:32 AM
The key difference, of course, was that neither of them joined the Euro until after the crisis. So they could run very high inflation to get out of the domestic debt.
Really? The Baltic currencies were already pegged to the Euro before the 08 crisis. I doubt if they could just print money as much as they liked under such a system.
Quote from: Monoriu on July 14, 2015, 11:01:24 AM
Quote from: Martinus on July 14, 2015, 10:58:32 AM
The key difference, of course, was that neither of them joined the Euro until after the crisis. So they could run very high inflation to get out of the domestic debt.
Really? The Baltic currencies were already pegged to the Euro before the 08 crisis. I doubt if they could just print money as much as they liked under such a system.
Quote about Lithuania (whose GDP dropped the most):
QuoteIn December 2006 the government approved a new convergence plan, which pushed the expected adoption date to post-2010 due to inflation.[5] In 2007, Prime Minister Gediminas Kirkilas stated that he hoped for adoption around 2010–11.[6][7] Generally high inflation, which reached a peak of 12.7% in June 2008[8] (well above the 4.2% limit of the time),[9] delayed Lithuania's adoption of the euro. By the time of the 2010 European debt crisis, the expected switch over date had been put further back to 2014.[10] Lithuania expressed interest in a suggestion from the IMF that countries which are not able to meet the Maastricht criteria be able to "partially adopt" the euro, using the currency but not getting a seat at the European Central Bank.[11] Interviews with the Foreign Minister and Prime Minister in May and August 2012 respectively highlighted that Lithuania still aimed to join the euro, but would not set a target date until the state of the eurozone post-crisis was clear.[12][13]
https://en.wikipedia.org/wiki/Lithuania_and_the_euro
Quote from: Martinus on July 14, 2015, 10:04:45 AM
That would suck - Europe of Two Speeds.
Europe already has many speeds...?
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Ffarm6.static.flickr.com%2F5215%2F5509980924_8227fac906_b.jpg&hash=082ba7c91028a39d921d53acea1070fa4e51c231)
Oh, just let the Nazis in again and get a proper unification.
Quote from: Iormlund on July 14, 2015, 10:46:07 AM
Quote from: Syt on July 14, 2015, 10:03:33 AM
http://www.nasdaq.com/article/frances-hollande-eurozone-should-have-its-own-budget-parliament-20150714-00436
QuoteFrance's Hollande: Eurozone Should Have Its Own Budget, Parliament
PARIS--French President Francois Hollande said Tuesday he will make proposals for a eurozone government, after Greece came close to exiting the currency bloc in tense negotiations between European heads of state at the weekend.
In a television interview on France's Bastille Day holiday, Mr. Hollande said he will make a joint proposal with Germany to improve how the eurozone is governed.
"There must be an economic government for the eurozone," Mr. Hollande said.
The next step would be to create a budget for the eurozone and, ultimately, a parliament, he added.
Wait, what? The French have been the biggest obstacle for further integration.
Also I love how he proposes to create a government and a budget before a parliament. :bash:
It's france trying to spend other people's money again.
Quote from: Iormlund on July 14, 2015, 10:56:05 AM
much better (and trusted) governance ...
and that's the crux of the matter: the greek state is shit. It's clientilism to the nth degree and the greek citizens act accordingly.
There won't be a solution until that changes.
Quote from: Crazy_Ivan80 on July 14, 2015, 01:07:47 PM
Quote from: Iormlund on July 14, 2015, 10:56:05 AM
much better (and trusted) governance ...
and that's the crux of the matter: the greek state is shit. It's clientilism to the nth degree and the greek citizens act accordingly.
There won't be a solution until that changes.
I'd hope for some change with Syriza, but I doubt it. You are of course entirely right. Greece, in many ways, is a state that has failed.
The lenders didn't exactly do due diligence either.
Quote from: Norgy on July 14, 2015, 12:57:27 PM
Oh, just let the Nazis in again and get a proper unification.
:wub: