PITY Karolos Papoulias. The 82-year-old president of Greece has spent over a week trying to persuade the country's fractious political leaders to form a government after a general election on May 6th failed to produce a clear winner. Mr Papoulias, a soft-spoken former foreign minister, handed out mandates to various party leaders, none of whom could deliver, and made a three-day effort of his own, before finally giving up yesterday.
Success would have given Greece breathing space, if only for a few months, to pursue urgent reforms—such as recapitalising its insolvent banks and getting on with privatisation—to help restore its credibility with European partners and financial markets. Instead, another election now looms, on June 17th. Until then the country will be run by a caretaker government under Panagiotis Pikrammenos, Greece's most senior judge. Lucas Papademos, the ex-European central banker who has run a coalition government for the last six months, overseeing a €206 billion sovereign-debt restructuring and Greece's second bail-out, was not asked to stay on.
The transcripts of Mr Papoulias's last three meetings, made public at the request of Alexis Tsipras, the leader of Syriza, a hard-left coalition, and Greece's rising political star, reveal a disturbing lack of vision among the men who are supposed to be Greece's leading politicians. Rather than tackle serious issues, such as how to keep Greece in the euro, they swapped insults and shrugged off a warning that a bank run was imminent. “They're all irresponsible, none of them is capable of ending this crisis,” says Aristomenes Antonopoulos, a lawyer. “How to vote now?”
Support among Greeks for staying in the euro is up from 70% to 80% over the past three months, according to opinion polls. Yet fears that prolonged political instability could trigger a “Grexit” are also increasing. Greek savers withdrew €3 billion from local banks—about 2% of total deposits—as hopes of forming a coalition collapsed. Greece has seen a steady erosion of bank deposits over the past two years, yet few bankers were prepared for such a rapid acceleration of withdrawals. Deposits had increased in March and April, thanks to smooth handling of Greece's partial default.
Today, cash was being taken away from the banks in orderly fashion. There were no queues outside branches in central Athens or its suburbs. Customers ordered cash by telephone and picked it up 24 hours later. Some went straight into safety-deposit boxes at the same bank; some was stashed beneath mattresses in case Greece has to re-adopt the drachma. "People are taking preventive measures," says one veteran banker. "If you own a pile of euros, you'll feel rich in a drachma environment."
Despite their enthusiasm for holding on to the euro, Greeks are fed up with the austerity that German politicians say is the price of continued membership. Syriza suggests that such views are compatible, arguing that Greece can stay in the euro but also reverse the reforms imposed by the "troika" (the European Union, the European Central Bank and the International Monetary Fund).
This is a message Greek voters appear to like. A recent poll found that Syriza would win the next election with 20.5% of the vote, just ahead of the pro-euro New Democracy party on 19.4%, but well short of an overall majority. The PanHellenic Socialist Movement (Pasok), the only other electable party that supports reform, would come a distant third with 11.8%.
Mr Tsipras is reorganising his party and renewing his campaign, neighbourhood by neighbourhood, in Athens and other cities. His rhetoric is sharper than ever, yet his dream of forming a left-wing government is no closer to being realised than at the previous election. Potential partners have sounded more cross than co-operative since Mr Tsipras bounced into second place behind New Democracy on May 6th.
Antonis Samaras, the New Democracy leader, will pull out all the stops. If his centre-right party cannot form a government this time, his career will be over. A new alliance with a small liberal party should give him another couple of percentage points at the election. As for Evangelos Venizelos, the Pasok leader and a potential coalition partner, he is struggling to prevent more voters defecting for Syriza.
Even with the extra 50 seats that go to the party that comes first, the two pro-bailout parties will still struggle to form a government after the second election. The long-suffering Mr Papoulias is likely to be back in action on June 18th.
Readers' comments
The Economist welcomes your views. Please stay on topic and be respectful of other readers. Review our comments policy.
Sort:
@ Joe Solaris/MilovanDjias (1):
Here's a BEST OF (or rather WORST OF) your xenophobic rants (only today's crop):
"In classic Nazi fashion, the Germans seem to believe that by eliminating the weakest members of the Euro, (...)"
http://www.economist.com/comment/1419266#comment-1419266
"Spiegel has been anti-Euro for months. This article is the most cynical piece of rubbish published in Germany since the Nazi period. (…) this is about punishing Greece for having 'betrayed' Germany. If the Jewish analogy offends you, perhaps we should compare this to Ottoman treatment of the Armenians circa WWI."
http://www.economist.com/comment/1418644#comment-1418644
"Evidently the German conception of Economics, not only does not agree with Anglo-Saxon ideas, but also has more in common with Josef Mengele than Adam Smith."
http://www.economist.com/comment/1419278#comment-1419278
The only one displaing a Nazi mentality is you, Joe Solaris/ MilovanDijas.
I'm really sorry you've lost your job, but letting it out by collectively scapegoating and denigrating other nations won't bring it back.
@ Joe Solaris/MilovanDjias (2):
I'll add a few factual corections. As usual, you are widely off the mark when it comes to the subjects discussed.
1) "The Germans are performing a sort of 'mobbing' to convince Greece they need to leave the Euro and the EU."
http://www.economist.com/comment/1419278#comment-1419278
- Your basic assumption, as expressed here, is flawed. Germany has LESS interest than anybody else in a Greek default – because it stands to loose more than anybody, having contributed about 40% (!) to the entire Greek rescue package: 30% of the 240 billion euro accorded to Greece in emergency loans – which would be 80 billion euro. And about 40 billion euro which the Greek central bank owes exclusively to the Bundesbank via the ECB's target 2 mechanism. That's a grand total of 120 billion and thus about more than twice as much as Italy would loose if Greece defaulted (18% of 240 billion euro = about 45 billion euro).
2) "The article in Spiegel is pure slander and defamation against Italy. No apology has been forthcoming from German governmental sources - hence, it obviously reflects official thinking."
http://www.economist.com/comment/1420103#comment-1420103
- Apart from the fact that there is NOTHING slanderous and defamatory in the Spiegel's article (which is a well-crafted, balanced piece of quality journalism), are you sure you live in a WESTERN society? Since when do governments in Western democracies respond for articles published in the media? Do they do that in your country? (What is your country? Belarus? Russia? China? Or maybe Greece, horribile dictu? LOL)
3) "No, Greeks will not be going to Germany - they will go elsewhere, more likely to England or other English-speaking countries."
http://www.economist.com/comment/1419266#comment-1419266
Yes, they are going to Germany, and in fact in record numbers.
The below article was published at spiegel.de TODAY and shows that the number of Greek immigrants to Germany has been up by 90% (!) in 2011 from 201 – and that from an already high basis. Germany has been the # 1 immigration destination for Greeks for about 50 years, and that has NOT changed.
http://www.spiegel.de/wirtschaft/soziales/schuldenkrise-treibt-zuwandere...
I suggest you start fact-cecking before you sent off one of your rants, or else you'll look like a fool.
Godwin principle or no, there really is an upside to reintroduction of the Drachma. The Euro currency is ugly and inhuman in the extreme. It is deliberately designed to depict NOTHING! Big Brother currencies past and present are less offensive to common sensibilities. The Drachma could have the historical and cultural richness worthy of the founding culture of European Civilization. The deliberate emptiness and ugliness of the Euro suggests how arrogant and inhumane the elites which foisted it on Europe really are!
Please stop using that horrible word "Grexit". It is almost as offensive as PIGS.
Grexit. I thinks it's cute. Could be the name of an insurance company or a laxative. How fitting.
You are right.
Some people get it and some don't.. the danger of such acronyms. So before reporting the comments a few words on the dangers of verbal violence.
The characterization of the Southern Europeans and especially the Greeks as a rogues, crooks, etc t is just another case of the sociological phenomenon of relying on negative stereotypes in times of national and international crises. Instead of being judged and criticize decisions or actions of particular individuals, whole nations are collectively stigmatized. The most dangerous stereotype is the question of human nature and nations.
The acronym "PIGS" which is used by investors, finance professionals, the media and commentators, as a concise reference to the peoples of southern Europe and their economies, is not just only an insult of extremely bad taste. It is a modern version of the historical phenomenon of defiance of human nature of the fellow man, the process by which members of one ethnic group degrade the members of another to the level of animal, indirectly communicating the message that is worthy for them to receive treatment similar to that of animals
Although some media, such as «Financial Times», and banks such as Barclays, following complaints, such as that of the Portuguese Finance Minister, banned the use of the term, it seems that due to the quite acceptance of others the term might be established. Those who continue to use it, do not realize the seriousness of such a practice. They forget that such disparaging expressions have been used systematically in the past to desensitize the public to suspend any doubts, to turn off the empathy and facilitate, at least, the raise of imaginative and non-existing barriers between nations.. or even persecutions, massacres and even genocide as history is teaching us.
Before the genocide in Rwanda, for example, there had been a concerted government campaign of speech "brutalization" of the victims. During World War II Japanese propaganda had used the same method against the Americans. The most extreme case, of course, was that the Third Reich. One of the substances used for the genocide of Jews in concentration camps, was the pesticide Zyclon B. Long before, this, a seemingly innocent propaganda preceded the actual event. A propaganda of the impairment of human nature from the Nazi mechanism.
Expressions such as "rats", "infectious bugs" have been used routinely to characterize them. And of course when you perceive other people or nations not as human beings but as beasts or parasites, then you pave the way to go a step further. The verbal "brutalizing" violence is often the vestibule of real violence and not just in the “target” nations or groups of people.
Abusive language, denial of the human nature and verbal "brutalization" is the first step of the transformation of groups of people or nations, to a mob.
It would be unreasonable, of course, to argue that users of the term "PIGS" pave the way for economic massacre of “prodigal hogs" the South. Not in reality at least, because in the anonymity of the internet the case is different.
But it is surprising that civilized people reach the point of spreading disparaging expressions which have caused so much suffering in the past. When dealing with others not as individuals but as representatives of stereotypes, when one ethnic group is considered to embody the moral and honorable, and another ethnic group the deceitful and immoral, then the door opens to all sorts of barbarity. Neither the South are "pigs", nor the Greeks are born crooks, nor the Italians rogues, nor the Germans prone to genocide.
Good and evil is inherent in every person and the second can easily be triggered by verbal social interactions. Hopefully this practice will stumble on the rocks of reason and our common humanity.
To conclude I would say that the word PIGS is not the only issue. When people are suggesting the “argument” : “They have done it before, who will persuade me that they will not do it again” is exactly the same thing. With this logic after the Germans failed to exterminate the Jews for their reasons, the we should exterminate the Germans because we believe that they will do it again because they are prone to genocide. Statements like that are beyond stupidity... naivety, lack of education, lack of history and social education, racism and superiority complexes or a naive joke?? In any case the result is the same.
And because I know from recent experience that the Economist is as sensible as the FT and others on this issues, and that it will delete the reported comments, please leave Lububashi's and my comment as it is, so that it will be clear that you have acted.
In this way you will contribute considerably in avoiding discussions threads degrading to verbal mobs as it is often the case.
But just as accurate which is why it is so infuriating to hand out apologists. I prefer Club Med to PIGS but the innuendo is the same.
Long comment but worth it. I agree with you on "pigs". What an abhorent acronym it is. You explained well why it is a dangerous expression that paves the way to genocide. Besides, it provides no understanding on the actual causes of the current economic difficulties. It is rather designed to express racism and hatred in a a single word and arouse the darker, lower instincts within every human being.
Excellently well put. Just one niggle, if I may.
It would be helpful if you would kindly acknowledge that it was not "the Germans” who "failed to exterminate the Jews”. What made the Holocaust possible, in its specific time and place, was a universal acceptance of antisemitism as a normal attitude. That anomaly was certainly not confined to Germany. National Socialism struck a chord in the Thirties, throughout Europe and beyond, including I daresay the hallowed United States. If it were not so, I doubt the very (for us) unthinkable could have taken on such unspeakable proportions, The Nazi juggernaut depended heavily on the overt co-operation of millions of ordinary “Europeans”, high and low.
I join you, in the interests of avoiding further xenophobic extremism. But may I suggest you specify the Nazi ideology that drove that particular madness, rather than a specific nationality or ethnicity?
Ich danke Ihnen ganz herzlich.
This is by far the best comment I have ever read in The Economist in the last 10 years. Thanks for writing it.
I acknowledge it by all means. It was the Nazi regime and not the German nation.
In my comments I have spoken not only against the notion of collective responsibility of the German nation for what has happened during WW2. In fact I have expressed my admiration for the level of self-criticism of the German people which in my opinion is unprecedented and should set an example for all nations. Moreover the Germans enjoy a very liberal and solid democracy which themselves have created out of chaos.
Hence I am very disappointed by articles and covers of the Bild and Focus as I am of the Greek equivalents although they are of very low circulation.
Having said all that, it does not come as a surprise to me, that the only ones that see the similarities of the Weimar Republic and the 53 German debt restructuring, with what is happening now in Greece and in the rest of the South, are the Germans. Moreover no surprise in the fact that the most "fanatic" of keeping the Union united, are again Germans and Greeks.
Both these, are due to (among other things) the historical conciousness both nations have.
And if I may, a prediction: Greece triggered a crisis that in fact was much wider and deeper and not isolated in Greece. Germany will end it. And it will not be with loans and bail outs.
I might disagree with Chancellor's Merkel policies not because they are wrong by definition. But because they are wrong because they are half.
And until now she is the only one that has done something all Europeans want desperately. She has put politics above the markets when everybody was saying initially that this would lead to disaster. I am referring to the PSI and the restructure of Greek debt.
Ευχαριστώ πολύ για όλη την υποστήριξη σας μέχρι τώρα.
"a disturbing lack of vision among th"ose" who are supposed to be Greece's leading politicians"
Just plug "Europe's" in there, and be done with it. If Greek politicians had vision, it would do no good; they'd have no one to talk to.
It took a lot of vision and courage to establish the common currency. No one ever thought this was going to be easy. The next step is to make it work. I hope Europe will again find the necessary vision and courage.
Explaining to thrifty hardworking creditor nations in the Northern Euro area that they will need to pay higher interest rates to pay off OTHER peoples debt.
You would need a lot more than just mere courage to do that!
Europe seems to be cursed right now with an abundance at the top of mere politicians, and not a single statesman. It makes a great difference.
Along with vision and courage, it took a great deal of wishful thinking and of lying to their publics by European leaders to create a common currency that included the weaklings. I think that they hoped that by the time a severe test came, the people of the Euro would be genuinely Europeans; but it seems there are none of those to be found anywhere on the continent.
Are there Americans in America?
It certainly seemed so on 11 September 2001.
Well played!
We have short memories and virulent pols.
That is where vision would fit, I guess...
Yet another fine mess Europe has gotten the world into. Two world wars and now an intractable currency mess.
The stock markets are fixated, if not commanded, by a bunch of dysfunctional Greek politicians sitting in a room hurling insults at each other.
Hmm, all the recent pointless wars seem to come from the US.
Oh yes, then there was Lehman bros, that was the US too, and Goldman Sachs, who conspired with the Greek government to hide the government overspend.
Please grow up. You are the one hurling insults here.
The thing that is pointless and evil is terrorists from the Middle East who want to create havok and wreck World peace.
America trying to defend itself and as the leader of the free World stop the terror.
But anyway lets stop talking about wars like Iraq and Afghanistan which are over 10 years old, losing support, politicians wish they hadnt started...And talk about the Euro!
I would not talk about something of which I know too little to make a reasonable opinion. What I do know is that where cultural differences exist it is difficult to work together.
Look at the cultural difference in work ethic and view of debt between Europe's north and south. The laudable aim was to integrate two sets of not completely compatible cultures, and do so [not at all laudable] with inadequate forethought and preparation.
Have you spent much time in Italy? Italy is divided into at least three cultural areas [broadly north, central and south] that do not get along, do not share a single culture and despise each other, sometimes threatening divorce.
If the Italians have such difficulty forming a country consisting mostly of Italians with a mostly shared history, did it make sense to blithely look forward to uniting the many different cultures of Europe? Not to mention, again, doing so with too little foresight and inadequate preparations.
I wish Europe well, and wish it had gone smoothly. But now is the time in a marriage when large questions loom. Continue the domestic discord or divorce? Divorce peacefully and as amicably as possible, or in a horrendous family feud, not to mention bloody battles over division of property and child custody.
It's not a culture issue; Southern Europeans work as hard if not harder than North Europeans; they want the same things; the difference is that unlike N.Europeans they find themselves in a situation where hard work and competence is punished and dishonesty and incompetence rewarded.
In the Indian subcontinent, all the South Asian countries almost share the same culture in spite of having different religions. Still they can't form something similar on the lines of EU. Whereas, Europe after fighting bloody wars for centuries decided to integrate their economies (although having different cultures and ethnicity)
So Goldman Sachs convinced the Geeks to lower their retirement age, to 50yo in some instances?? It contrived the kleptoracy by Greek citizens in the national railroad? It masterminded the pay raises for useless Greek civil servants? The list goes on...
Please don't attempt this simple minded deflection of Greece's foolish onto the USA. The responsibilities SOLEY are with the Greeks. Grow up yourself.
"lets stop talking about wars ... over 10 years old"
yeah ... why talk about wars and these millions of civilian suckers, who died on the sidelines ...
It will surely make you and your friends feel better. Right?
What you are saying shows that US propaganda machine is doing a marvellous job. Mr. G. is turning in his grave.
Culture has different meanings. I wasn't referring to the Greek Orthodox Church, Greek food, etc. I was talking about the culture which is responsible for the crisis, that is government/political culture, business culture, etc.
Your reply is very à propos. However it is difficult to compress the many issues into a textbook, much less a 5,000 word post.
With the exception of the religious wars, most of Europe's wars have been dynastic, political and territorial. Though this is almost too broad a generalization, European countries share a common history [related to Rome and Christianity, which classical heritage has, more recently been enriched by the enlightenment developments] are not as different as the Asians.
They have thus more in common with each other than Asian countries despite the warfare. Following World War II, the Germans not only admitted their guilt, they teach their children about it and seem to have changed the national character. The Japanese have not done any of this and have made apologies under pressure and inadequately.
This seems to be healing the Korean-Japanese hostility; but no Asian country subjected to the "Greater East Asia Coprosperity Sphere" [i.e. Japanese colonization] or invasion [Korea, India-Azad Hind, China, Vietnam, Philippines, etc.] would find any kind of union with Japan palatable.
IMHO the main problems are: they underestimated the difference, planned inadequately for problems, disregarded lessons learned elsewhere [U.S., India and Canada], expanded too far too fast and were wildly overoptimistic.
what would be impact of germany leaving euro ?devaluation followed by restabilisation
Instead of reintroducing the Drachma, Greece should introduce a new "Greek Euro" (seperate from the Euro but related in name like the French Franc and the Swiss Franc). Since the currencies would be at par on day 1 and because Greeces debts are in Euros eminating from Greece, Greece could make an arguement for paying debts, salaries, etc in new "Greek Euros". These obligations (as well as Greeks standard of living) would quickly decrease as inflation takes off.
A dumb idea but not much dumber than a lot of what's being discussed.
no one is going to accept "greek euros" no matter how cute that name is, for debts denominated in real euros.
Unless you are talking about Greece counterfeiting the euro, which I don't think is likely, then you might as well call it the Drachma.
There really is no relation between the French Franc and the Swiss Franc, any more than there is between the US Dollar and the Hong Kong Dollar.
Why would the name make it any different? Why would they be at par on day 1 ?
Gary C
"A dumb idea but not much dumber than a lot of what's being discussed."
You have already told us what you think of your own idea, so I won't.
It doesn't matter what the new currency is called. It doesn't matter what rate it is issued at. By the end of day 1 it will have fallen in value.... dramatically or maybe I should say "drachmatically".
And once it finds a new level it will then have to content with Greek politicians spending like there is no tomorrow (again) and the markets will factor that in and it will fall even further.
Hopefully we will soon find out!
Quite right, CW - and Greece would still have all its debts to carry - all of which are denominated in real Euros.
Doesn't work, as you have observed, GaryC - but as Brunny asks just above you, if the North leaves and goes to a new currency, then the existing Euro can be depreciated through stimulus-QE, and the South's debts get depreciated right along with it. This could work - but the fu.... krauts are too closed-minded to even entertain the notion. Maybe a couple of months in limbo will permit them to look at it from this angle.
Why would the currencies be at par on day 1? Who will buy at that rate? Nobody. If Greeces owes Euro to me will I accept drachmas or greek euros or whatever you call, knowing fully well that it will be worthless in the near future?
Although creating "Greek Euros" isn't a ligitimate solution, it could be a political solution for politicians. Some of the Greek electorate might be convindced they didn't default and their problems are caused by the banks, by the Germans, or whatever other scapegoat they can find.
Bunny's solution of the Germans leaving the Euro might help Greece (and Portugal, Spain, etc), but as a creditor why would Germany want to accept less than what is owed them by other borrowers that can afford their debts?
I don't think the Greek exit will come before the American presidential elections. Mr. Obama will want to avoid such a risk to the economy and his campaign. Even if Mr. Obama can not persuade Mrs. Merkel to keep on funding Greece forever, he can persuade her to wait until November. So the Greek exit could then happen at Christmas/New Year.
Ad why not think about a "Grexit" as a solution rather than a problem?
It could justify the Spanish, French and others missing their fiscal targets (no matter if caused by Greece or not), and more important, it could justify all sorts of unconventional ring-fencing measures by the EFSF, the ECB and others. For example giving Spanish banks direct access to bailout money from the European funds and more temporary money printing by the ECB to absorb "the shock".
So measures could be introduced, that are necessary anyway in this worsening debt crisis, but it could be explained conveniantly by the need to absorb the shock caused by the Greek exit.
One thing that should not be forgotten though: if Greece exits and defaults, the guranatees for their bailout programme would have to be payed. Not only by Germany, but also by the other countries like Italy, Spain and so on. But again, this would be a conveniant explanation for failure to meat fiscal targets.
Unless there is some more transparency in the Spanish banking sector and the EBA has more power, it makes no sense whatsoever to bail out Spanish banks directly with the EFSF. You don't bail out potentially insolvent banks, only illiquid once. And if you have a look at how much capital is being stored in the ECB every day because especially northern banks don't know what to do with it, you will find out that more printing for the sake of printing is quite unnecessary.
http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increase...
BadaBOOMMMMMMMMMMMMMMMMM
Doubt whether Obama's views will count for much. The US is not in a position to exert any real influence. But another country is.
My two abiding memories of Cannes will be Papandreou being told off like a naughty schoolboy by Merkel and Sarkozy, followed by a sulky Merkel sloping off home after Hu Jintao made it clear China expects Europe to do more to clean up its own mess.
From everything I've read, Mr Tsipras hasn't provided any details of just how he thinks the Greeks can remain in the Euro while scrapping the austerity program. The reason for that is simple - he doesn't have a plan. He just knows that to get elected, you need to promise the people what they want. I sincerely hope Greek voters, having vented, will now be smart enough to recognize that they cannot have both and that a vote for Mr Tsipras and his ilk is a vote for Grexit. And, if that's what they choose, so be it. Let's get on with it.
He has one...
You don't want to read it....
If you want to get an idea find the program of one of your country's radical left party's program you will find similarities.
I'm absolutely sure he has a program - but it's not one that involves remaining in the Euro. Like all far-left politicians he believes there's plenty of money available. All he has to do is take it from those that have it.
1. Out of fear the Greeks will vote in a pro-Euro coalition in next election ;
2. In any event, Eurocrats will not tolerate the exit of any member from the Eurozone. Collectively, they would rather pop a cyanide capsule in a Brussels bunker than admit defeat to any part of their project
Nicely done. A reference to you-know-who from you-know-where, without incurring Godwin's Law... and still calling a spade a spade...
Yes, to points 1 and 2; and the next election will prove it...
Do you mean that Greece will have a Weimaresque government, 1920s style worthless paper money in units of billions, a coup d'etat or, most likely of all, an occupation by certain outside forces [which need not be mentioned for reasons you have stated]?
No, not at all. I fear you missed what I was referring to. Point 2 (the initial one) drew a clever parallel between you-know-who, who went down with his idea of an empire in his bunker without ever admitting defeat (not that admission was necessary at all, for it was rather obvious to all), and the Eurocrats who behave exactly the same way as the courtiers of that person whose name shall not be mentioned. The obstinate denial of the obvious was the point of the second entry. Guess which country are the Greeks in a pissing contest with? Yes, that one. So, you see, in my opinion, the points the thread initiator made, and the way (s)he expressed them, were truly witty. I was acknowledging it in a manner that was not too obvious (I hope); and commenting on the post the same way one comments on a nice shot/kick/throw in a sport where a nice shot/kick/throw is appreciated. You picked up on the cues, but were misled unintentionally by the roundabout way neither the person, nor the place he was from, were named - for fear of invoking Godwin's Law. Phew, it took longer than I thought it would; but hope that I was perspicuous enough...
Either you are far too subtle for me, or I have conflated different arguments [possibly both].
Some posters seemed to be referencing the impetuous and ultimately disastrous forcing of ruinous reparations on a country that in reaction became a menace. Ελλάδα η απειλή has been involved in unnecessary military adventures in the Balkans, always a lively and inflammable place.
Some seemed to be worrying about the potential fall out from a Drachmatic change in the EU/EZ resulting from Grexit. That is, speculation and hyper-inflation leading to political and economic instability. This was feared to spread to the rest of Europe. Rather like the 1920-30 period.
Some have suggested that Greek attitude was a reaction to foreign gauleiters and their local quislings being heavy handed; and trying to remake Greece into Γη της το Νότιο Teutones.
Perhaps I read more into the remarks than was intended, however this seems a fair summary of posts on this topic [and chillingly déjà vu].
" Either you are far too subtle for me, or I have conflated different arguments [possibly both]."
Going by our previous exchanges, I would say that more of the second than the first. I see the points you brought up (some I agree with, some I don't), but in this case they are misapplied.
The thread initiator said in a clever way that, the Greeks will vote for a government (June 17) that will want to stay in the EZ; and even if they would not, the Eurocrats would find a new way to give Greece the financial help it so desperately needs. I agree with both points. Just to make this overwrought drama a little more interesting for us, non-Europeans, let us make a small wager that, the Greeks will indeed vote in a pro-reform government. Let's ignore the second point for now. The winner will simply state in a post that, the other read history (in this one simple instance) correctly. What do you say? The whole financial market of the world is doing nothing, really, but places bets with other people's money, anyway. It is always interesting to muse over history with people who have a little feel/respect for past events; as opposed to insisting in a shrill voice that history must obey their interpretation - and demand that history follow their whims... So, is it a bet?... Unless, of course, you agree with the assessment to begin with.
I only bet on [nearly] sure things, and this situation is far too murky, and risky. I think, whichever currently plausible outcome eventuates, we are in for a very rough ride.
I am not sure that the Greeks will draw back from the brink [it is the Balkans, after all]. History, as I understand it, seems to indicate that the only [nearly] safe bet in the Balkans is on Murphy's Law.
I am not sure the thrifty Germans will continue to allow their government to send their hard earned money to people they think [whether or not correctly] are wastrels. Not to mention whose government(s) are perceived to be inveterate liars and irredeemably corrupt.
I am not sure that the uncertainty caused by the last Greek election will not continue to cause problems, worsening the situation before the next Greek election. I am also far from certain that the next election will be too different from the last.
I am sure that the US doesn't have the financial resources now to risk intervening, even if asked, and even if the election season in the US were not as poisonous as it already is.
However, I am not sure that the unstable political and economic situation in the US will not become entwined in the Drachmatic developments now unfolding [I hope I am not overdrachmatizing]in the even more unstable Balkans.
I am afraid I disagree with your kind interpretation of my remarks, it is almost certainly the former. But I hope I have not been insisting on my interpretation [whether or not in a shrill voice], and am far from offering a Delphic oracle on the matter.
My previous post was truncated. So let me say in conclusion that I will certainly acknowledge a win for you should either or both of your predictions come to pass. My statements are too general to warrant being called prediction, however.
PS this is the second time that a post has been truncated well short of the 5,000 character limit. Both times I was using the edit function to repair an oops. I am happy to report on a positive note that edit no longer seems to delete paragraphing.
I live in Greece. The article is quite accurate.
However an obvious mistake is the amount of withdraws. 1 billion was the amount.
The fact that the transcripts have been published after a request of Syriza. This is the epitome of populism. A populist misinterpretation of democracy.
Instead of the leaders discussing in private and therefore be able to manoeuvre to be realistic to be flexible and constructive, the meeting was in fact public and hence degraded to a sterile reproduction of election speeches.
I believe that this should be pointed out by the journalist. And in fact by the foreign media in general.
I am Greek and and as any citizen of any democracy I do not appreciate foreign interventions.
But this issue is not a matter of intervention.. it is pure and simple common sense.
"I do not appreciate foreign interventions."
"pure and simple common sense"
Booing is boring, what is your more interesting alternative?
I have no point to make, you have both my ears.
Very interested to learn what you think
--an American watching very closely
Well, one of the basic rules of any monetary reform that negatively affects general public is that it must be surprising and fast.
If basically all global media have launched a massive campaign persuading readers that the transition of Greece to the national currency is an accomplished fact, then I'm not surprised that I'm reading about massive run on Greek banks from which people draw out all their Euro-savings, and, at the same time that ECB does not want to support some of the Greek banks that are in most difficult situation anymore.
Therefore, I'm afraid that this irresponsible campaign will really lead to the chaotic default - exactly what the EZ countries have been trying to avoid for the last two years by the massive - and that it will happen sooner than the June elections take place.
Maybe, as a penance, the journalist should also start a global fund-raising campaign to keep the basic state-services in Greece running throughout the process.
Hello Tomas,
Please excuse me for sounding like a broken record. Ten billion euros, offered as a solidarity gift in exchange for sticking to the austerity programme, to be used directly to reduce the deficit this year... Is that so much to ask to avoid Armageddon? Divided amongst us older and richer EEC members this is a trifle. And yet, the Germans in their insanity are willing to write off 60 billion of their own exposure and risk continental melt-down, even as they refuse to gift two billion of their own money to Greece.
This is insanity. And Vendetta.
Please understand, we Italians feel about Greece more or less like the Czechs feel about Slovaks. Yes, we know they have warts. Yes, we have had our own (sometimes bloody disagreements) in the past - but they are our "little" brothers, and seeing them mistreated, entrapped and driven into bankruptcy like this is enraging public opinion here, turning what was long Europe's most pro-integration country, a founding member, against the whole European enterprise.
The only part of Greece with a Land Registry is in the ex-Italian colonies of Rhodes and the Dodecanese (today's South Aegean Region) where we left behind this reform. What were the Germans doing lending tens of billions to a country without a Land Registry? They knew, they had to know by Germany's own legislation and praxis that such uncertified values about something so basic as land and ownership renders all statistics suspect.
Italy was for 30 years a bigger arms exporter than Germany - fourth in the world after US, SU and France. Then in the last ten years Germany overtook us - 20% of their military exports to Greece, with proof now of bribes paid to officials in Athens. We never sold arms to Athens for fear of upsetting a delicate regional balance with Turkey. Last year, the Germans were still insisting Athens not cancel arms purchases or else Berlin would not contribute to the bailout.
This whole situation is colossal, historic, pig-headed stupidity on the part of the Germans. A minor crisis, well within the ability of the richer nations of Europe to resolve, has been turned into the brink of worldwide Depression. And the Germans are all telling themselves it will not be difficult to withstand the blowback of a Greek exit and default.
This is like saying that with the Schlieffen Plan the war will only last a few months...
Thank you, that puts it perfectly in perspective.
You do not care a sh*t about Greece, the only thing you care about is you and Italy in the most selfish and hypocratical way possible. Neither are the maths your strength if you seriously think a two-million one-time gift would have changed anything.
Hello Milovan/Joe!
I understand your feelings and I consider the escalated situation very sad for EU too - because in my understanding, EU should be like a guarantee for all - from private tourist to corporate investors - that wherever in EU you are, the place is stable, safe, well-maintained, law-abiding and all the common standards can be relied on.
But I'm afraid that this reputation will now be lost. And I think it's caused by the fact that EU is not strong enough to enforce the standards - simply the national states with all their sins and bad habits, (often irrational) decision making processes driven by past experiences are key factors for the development of individual EU members.
Therefore, notice that the escalation is the result of national elections in Greece and the issue that you described (e.g. arms-dealing) is again about national/economic interest of individual countries (Germany in that case). Thus, you should be fair and admit that without Greek refusal to continue in troika-agreed measures (by electing parties that refuse this policy), the escalation wouldn't have happened and Holland and Merkel officially claimed after their recent meeting that they didn't want changes in EZ. Thus I think it's the pressure of financial markets and journalists who contribute to increasing the pressure.
And the question is, what can be done now, when the situation seems already too far for managed solutions - run on banks and cutting local banks off the ECB backing is a trigger of chaos...
Anyway, I guess you don't have to worry about the Greek people even in case of default - unlike Argentina, common citizens of Greece have freedom of movement around EU and thus can move away if situation becomes unbearable. But it's definitely sad that the zone of prosperity in EU shrinks rather than spreads...
MilovanDjilas
"We never sold arms to Athens for fear of upsetting a delicate regional balance with Turkey."
Germany was equally careful about this "delicate balance". That's because they sold arm to Greece and Turkey equally. Voilà. And you accuse Germany of being incapable of pragmatic solutions?
Two billion from Germany, with like amounts from Italy, France, Spain and Benelux and perhaps Brussels (unspent Greek monies?) would be enough to bring their deficit from 7% to Maastricht's 3% THIS YEAR. That would kick the can down the road for another 12 months - giving both Greece and the rest of the EZ another year to continue budget consolidation (and perhaps get out of recession).
The Greeks are great soldiers, physicians and linguists. They have never been bankers or economists. I am talking with educated Greek friends, speaking five languages and with distinguished careers - and the truth is that they are quite inexact about their own country's financial statistics.
Of course, the people vote this way - they do not understand and are frightened, struggling and too ready to believe the demagogue Tsipras, who gives them false hope. The fundamental problem is that they do not perceive the European Union as a friend any more - and perhaps they are not wrong.
I agree with that generalizations like denouncing (citizens of) any country is wrong. Every individual has strengths and weaknesses. But the fact you mention that most Greeks are not interested in economy is exactly why the needed reforms should be supervised by EU. For example, you mentioned that land registry was necessary for an efficient administration, everyone knew that, so why was not EU able to enforce its creation since 1981? If Greece gets a populist government, I can quite understand that EU/IMF will thus lose any hopes for the needed reforms and refuse to keep on funding the inefficient administration.
As for the relationship: I'm afraid that the actual relationship between EU and Greece is as that of a lover and a pampered beloved ;-)) And every love eventually perishes. The correct relationship among EU members should be as that of family members: each family member is an active part of the family and should contribute his/her best in the name of increasing the common good and, in addition to receiving advise and expecting help in need, also feel responsibility for the situation of the whole family rather than only his/her own. Note that spoiled offspring who do not want to respect it, are often disinherited...
How do you spell 'accountability' in Greek?
ευθύνη There you go.
But the correct sppelling is απληστία in Greek and
cupidite in French and
Gier in German and
avidità in Italiano
tamaa in swahili.
The problem is not just in Greece, its also wit the private sector in rich Europen countries, driven by greed to make a profit, they could do anything in the days just before the crisis.
If Syriza formed a government in June and marched to Brussels to "renegotiate", what is the realistic outcome?
Syriza can't let the aid negotiations collapse - it critically wants to meet payroll and social commitments. After a bit of hard ball, creditor nations would make some pretty concessions without substance - just something to let Syriza go back with a credible claim to having done its best.
Of course, with a bank run right now, Greek tax revenue could well collapse and produce a growing deficit. This will test the versatility of European institutions: can we rebuild a functioning banking system in Greece (so that investment doesn't collapse entirely)? Can we resolve the liquidity crisis? Can we help Greece enforce a functioning tax and legal system? Can we reduce corruption and political rent seeking? Can we provide confidence, stability, and trust that business assets will not be appropriated? Can we restore normality?
All of this is entirely possible - it would require boldness and would perhaps strain "democracy", but resource requirements would be modest - and broadly popular by Greek opinion polls on the euro.
+1. And it shouldn't be thought of as a Greek project, but as European. It must address EU wide structural reform (liberalizing trade in services, etc.) to correct the internal balance of payments problems inherent within the eurozone. How else will Portugal, Spain, et. al. be resolved?
The single currency was a magnificent political leap of faith. Europe must go all in on this one. Dissolution of the eurozone would be a terrible, terrible step back.
If Syriza could put together the right pitch - appealing to EU voters over the heads of their political leaders - his negotiating position might be stronger than you think.
Most independent analysts (including TE) suspect that Greece (unlike other 'problem countries') has got beyond the point where any combination of expenditure cuts and tax increases can balance the books, because they will drive the country deeper into recession, increasing the social expenditure bill and cutting the tax take. In the current climate, the proceeds of fire-sale privatisations would be derisory. And the measures of liberalisation and deregulation which might make Greece more attractive to business will take time to work - time that Greece does not have. So, Greece goes bankrupt if it stays in the Euro and bankrupt if it leaves or is booted out.
Syriza's message would be that it was incompetent and mendacious politicians who got Greece into this mess, not the ordinary decent people of Greece. Tsipras could appeal to the ordinary decent people in fellow EU states not to allow their Governments to leave Greece painted in this impossible corner. His strong subtext message would be "If it's Greece today, it could be you tomorrow".
In facing this down, Merkel would have a very nervous Hollande at her side (or trying to hide behind her) and be without a hawkish Dutch ally. And she would know that many German voters are beginning to feel more queasy about where all this is going. She's done U-turns before, and is perfectly capable of doing so again.
Syriza's offsetting weakness would come partly from their total lack of credibility (with ECB, IMF, Monti, etc) as a party that would ever actually do much to restore Greek competiveness. Additionally, Tsipras shades too easily from being anti-EU (plays well with everyone) to being anti-bank (plays well with voters, but not with people who are still Greece's creditors) or anti-German (very poor tactics). With his "Playing poker with people's lives" line, Tsipras is making the right opening move. But I don't think Syriza could cut as good a deal for Greece as a pentient an 'under new management' ND-PASOK coalition (of which, on current showing, there is not much chance).
This is disturbing.
Syriza absolutely does not have such a good negotiating position. Greece has already received extensive aid - to the consternation of poorer EU and eurozone countries. Syriza's rhetoric about "renegotiating" (defaulting?) is really straining any sympathy or willingness to continue helping that other Europeans have.
Many national politicians are under pressure to wash their hands of Greece and move on. Greece must attempt to comply with international treaties - and can't realistically demand much by way of concession. Both deficit cutting and structural reform are non-negotiable preconditions for financial aid.
Spending reduction does reduce the deficit. Not euro-for-euro, but it is effective and necessary for the confidence of creditors. Nobody under 60 should receive a pension - cap all government payments retrospectively at 250 euros/ person and tell them to find/ create work. Nobody under 67 should be shifted to retirement - it is far cheaper for government to make them work, whilst sacking the least productive civil servants. Cut military spending radically. Pursue real growth opportunities - a rising pension bill and the taxation needed to fund this undermines everything.
There is so much good that a new political party - especially a liberal left wing party - could do in Greece. Hang the military, stop tax evasion, get the courts working, fight corruption, increase education investment, placate the trade unions, etc. But I'm getting ever less confident that these will be the actions of Syriza.
It was clear that this was coming 2 years ago. If Greece had exited the Euro and defaulted on its debts then, we'd be a lot further along by now. Greece, after a truly painful year, would be growing now. Spain and Italy would be out or in, but by now we'd know. There'd be a lot of busted banks in Europe, but that is still likely to happen.
Remember those currently unemployed in Greece (or Spain), how much longer do they have to wait for some lasting relief of their plight ?
Down with the Euro DOWN WITH THE EURO!
spoken like a true City dweller ... can't wait for a new feast, can you?
;)
I hate central planning and live in a suburb.
God I hope the ECB has already printed Drachmas.
I look forward to waking up one weekend and finding the Grexit has occurred and finally Greece (an economically tiny and unimportant country on the edge of nowhere) will be off the front page.
Exit then default PLEASE.
Euthanise the patient already!
To start with I have reported your comment for what it is.. a hate speech.
Secondly, the ECB does not print currency. Private companies do.
Thirdly, read the following:
http://www.nytimes.com/2011/06/30/opinion/30mazower.html?_r=2
It is written by a professor of Columbia University. It will help you.
Finally: politics, economics, sociology, history and modern European history. Start your studying now and start from page 1 in every subject. With hard work, you will wake up one day educated with actual knowledge of the universe we live in.
"Euthanise the patient already!"
You mean the EU?
I wholeheartedly support, and fully agree with you.
dimit71
I know the ECB doesn't print currency - but it sure as hell issues it after getting someone else to do.
Hate speech? Haha!!! I know TE policies and nothing I have written could be construed as hate speech. Just because it upsets your delicate sensibilities does not make it anting more than it is.
I stand by everything I have written. I read what your professor of HISTORY wrote and it didn't change or add anything new. History are the laurels that Greece lazes on.
Greece is an economic and now political disaster. It is a country that now represents less than 1% of EU GDP and hence is economically tiny.
It is a country that is so badly run that it has bankrupted itself in a spectacular fashion even after all the EU has handed out to it since 1981.
Blaming the banks or the EU for what has happened totally ignores the Greek politicians spending the money on Greek voters.
I am educated and see Greece for what she really is.
The Greeks caused this problem and they can solve it by please leaving in an orderly fashion - before they are booted out.
enjoy your future dummkopf
http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increase...
Marie.Claude
Wow calling me a German insult. Even though I speak German, I am not. My country is not bankrupt and when our next recession hits we will not blunder our way through it blaming others.
But Greece has to blame someone and it is all Germany's fault? God forbid it might be the Greek voters feeding at the trough of government largesse that is at fault!
Calling people names does not show intelligence - it does the exact opposite. Congratulations!
Lastly, what a pathetic article. I am actually embarrassed for you that you posted it not once, but twice on this forum. An anonymous article written under the nom de plume of Tyler Durden - you besmirch yourself probably because you don't even know the connotations of the name - quick pop over to Google.
Another reply that does nothing to counter any of my claims or comments.
LMAO, the chicken will come to roast into your home too !
oh that's too much, did I insult your hubris fatuity
Zerohedge hasn't the reputation of being a magazine for Dummkopfen, too bad that you can't appreciate the irony of it
Dummkopf is a gentle name, I could find some more vicious' ones for your self-complacency and lack of empathy
your country isn't bankrupted, yet, until when? the chicken will not forget to come to your home too !
Too bad that zerohedge isn't appreciated by your kind, it is nonentheless by many smart people that know a bit of finance and economy, that you seem to reduce as clichés
May-be WSJ is for the donkeys too !
http://blogs.wsj.com/marketbeat/2012/02/16/cashin-heres-the-real-risk-if...
I have not red the policies of the Economist concerning hate speech. I used common sense and historical knowledge. Abusive language and verbal brutalizing language is often the vestibule of real violence. It is the first step of transforming a group of people to a mob and might pave the way for the real thing.
The expression "Euthanize the patient" when it refers to a nation is such an example of verbal abuse and brutalizing language.
It is not a matter of ones delicate sensibilities, it is a question of ethics, common sense, and basic humanity. Good and evil is inherent in every person and the second can easily be triggered by verbal social interactions.
I am afraid you lost the point of the article I have posted. It was just to point out the historical fact that many times in recent times, historical changes have started in Greece or have been triggered by Greece. This does not make me proud or ashamed. It is a historical fact that seems it has repeated itself with the crisis. Firstly it was treated with denial as an isolated Greek problem. Now it is clear to all that the problem is far deeper and wider and concerns many countries that are in trouble and in fact the EU as a whole.
The GDP of Greece is tiny although not 1% it is around 2.5% but in any case this is not the point.
I never denied responsibilities and I have never blamed any bank. This is obvious from all my comments. Moreover I never connected Greek history and civilization in any way with the economic crisis. I most ferociously opposed it and characterized the minority that implies or expresses such connections as comical. Minorities of this sort you will find in any nation.
Oh Marie.Claude
Wow, I must have really had an impact on you - two replies to my last comment.
Both laced with insults. Aaah the first retort of the obtuse and the last resort of the incompetent.
The fact you thought that you had insulted me only reinforces the last sentence.
My country does not suffer the stupidity of many European countries. During the good times, we ran surpluses and paid off all our government debt. That is what the good times are for. And when the bad times hit we did the opposite. That is why they are called the bad times!
Economic orthodoxy! I do not lack empathy as you believe, but I am not going to feel sorry for countries, governments or people that gorged themselves at the trough of deficit and debt when they should have shown restraint.
Greece and the Greeks created their own problem. Now they have to live with the consequences. Blaming others does not solve the problem, it only prolongs the pain. A pain that is constantly spreading.
Take it as it pleases you, words are less insulting than a attitude, yours bears this parallel
Blaming others, oh? but lecturing with arrogance?
dimit71
You need to stop being so sensitive. You catapult my comments into some sort of pogrom against Greece. Stop hiding behind verbal and linguistic contortions.
You get upset because people are picking on Greece. Just admit it. You are shamed by it. An ancient civilisation has been brought low. And not by any external force.
Bringing up Rwanda and the Nazis doesn't change the fact that it is Greece that created this problem and it is Greece that is prolonging the problem.
Attempting to silence dissident opinions by associating their views with despicable acts by genocidal maniacs is pathetic.
Greece is broke. Greece needs to leave the Euro and default. The banks deserve what they (don't) get.
The Greek economy is terminal while it is strapped to the Euro. It is like a junkie that needs its next fix. Another handout. Another bailout.
Greece needs to reform its economy and increase its productivity. The only way that is going to happen is if it leaves the Euro. Defaults. Rebuilds and becomes competitive.
The most urgent reforms are NOT recapitalizing banks and privatization, that is fire sale, to raise money to give to banks. Since there is not a chance that media will ever explain the nature of banking and the nature of casino economics that they engage in --- we are stuck with being forced to believe that Greeks have consumed the money that was generously given them by prudent investors ---- and need to pay. So, Greeks, in order to give to this casino JUST A LITTE BIT MORE of what you have, you will have to go along with the austerity that in fact, FOREVER prolongs your debt. Under current conditions, banks will DOUBLE Greece's debt every four years, so all that has been paid so far is not enough to avoid doubling, triplling and quadrupling of the debt. Markel may be the only leader in Europe that has some mathematical skills, and figured out that paying more into the casino is not the solution. She agreed to several rounds already --- just to demostrate that it does not work. Now, it is time to do SOMETHING ELSE. And for Greece, it is urgent to leave Euro. Once out, drahma will develuate against euro dramatically, and the debts will be refinanced accordingly. It will be much better for Europe to give money to Greece to get its economy started with drachma, then to give more money to bankers. All other countries with such problem can do the same, and free up Eurozone from the blackmail by banking cartel. Spain may do the same, and Ireland as well. Italy may be only happy to do it as well. The only suffering will be bourne by an army of EU fanatics in each country that is esconced in good jobs and careers linked to Euro existence. This will both strehghten Euro, and the economies of the services dependent European south.
Okay, so let's say that there is a Grexit.
Then what?
Could it be that there is a "drachma gang" which has a primary interest in chaos coming about in Greece leading to an exit from the Eurozone? If the latter happened and if such a gang really existed, they would certainly make a killing once everything has become very cheap in Greece!
http://klauskastner.blogspot.com/2012/05/go-after-drachma-gang.html