Greek elections

[happie chappie]

There are carrots the Troika could offer if it was so minded - provide more bailouts for example. Write more Greek debt off. Give it longer to pay off existing debt and so on.

By the way on your point on using foreign currency reserves for international trade. Assuming the Greeks have any left they would soon run out as Greece imports far more than it exports.

It's main "export" is tourism. In a parallel currency world Greek hoteliers would be paid in Euros by tour companies, and then pay their staff in comparatively worthless Drachmas. It's highly unlikely these Euros would find their way to the country's foreign currency reserves.

As suggested above, they would just be hoarded or spirited abroad.

 

[campanula]

If nothing else, this farce has exposed the paucity of democracy in a parliamentary system of parties since to all intents and purposes, power - the ability to effect change, resides in the shadowy hands of unelected technocrats and bankers. The dire no choice in our recent election simply illustrated the meaningless of 'parties', even ideology (since ours is made up on the hoof and largely fails to exist in any understandable form).
Rambling and depressed.

 

[ItWillNeverWork]

There are carrots the Troika could offer if it was so minded - provide more bailouts for example. Write more Greek debt off. Give it longer to pay off existing debt and so on.

These are exactly the things that the Troika are not willing to give.

In a parallel currency world Greek hoteliers would be paid in Euros by tour companies, and then pay their staff in comparatively worthless Drachmas. It's highly unlikely these Euros would find their way to the country's foreign currency reserves.

Businesses would be obliged to pay their taxes in Drachmas, and it is that obligation that would cause them to circulate. This is the same with every currency out there, by the way. There is no intrinsic value to any form of fiat money, just the power of the state sitting behind it.

Also, foreign exchange controls.

 

[happie chappie]

it's not what the Troika is willing to give - now. But it's possible they will give it, in small doses, if Greece complies with its demands

It's not a question of whether Drachmas circulate or not - they will. Not least as public sector workers, and most other employees, will be paid in Drachmas. It's how much they're worth and what they'll buy that's important.

They will circulate - at the speed of light as everyone who can would want to get rid of them. Again, "bad money drives out good".

In any case, businesses with access to Euros would exchange a relatively small amount of them for a barrow load of Drachmas and effectively inflate their way out of paying taxes.

You could always have foreign exchange controls, and then impose capital controls. And then become a siege economy no-one wants to trade with because your currency is worthless.

The rich are very adept at finding their way around foreign exchange and capital controls by the way. And that's assuming there's any foreign exchange or capital left before the controls actually take effect. Even a rumour of such controls would see massive outflows.

 

[SpackleFrog]

it's not what the Troika is willing to give - now. But it's possible they will give it, in small doses, if Greece complies with its demands

It's not a question of whether Drachmas circulate or not - they will. Not least as public sector workers, and most other employees, will be paid in Drachmas. It's how much they're worth and what they'll buy that's important.

In any case, businesses with access to Euros would exchange a relatively small amount of them for a barrow load of Drachmas and effectively inflate their way out of paying taxes.

You could always have foreign exchange controls, and then impose capital controls. And then become a siege economy no-one wants to trade with because your currency is worthless.

The rich are very adept at finding their way around capital controls by the way. And that's assuming there's any capital left before the controls actually take effect. Even a rumour of such controls would see a massive outflow of capital.

You're right to a point but you're exaggerating dramatically. You also forget that Greece still produces a reasonable amount of food, and that the Greek banks do have decent stocks of foreign currency.

In any case, the system we're discussing operated in Cuba for decades and they still managed to operate a bloody good healthcare system - that's light years better than what Greece has now.

 

[Diamond]

You're right to a point but you're exaggerating dramatically. You also forget that Greece still produces a reasonable amount of food, and that the Greek banks do have decent stocks of foreign currency.

In any case, the system we're discussing operated in Cuba for decades and they still managed to operate a bloody good healthcare system - that's light years better than what Greece has now.

Have you ever been to Cuba?

 

[kebabking]

...power - the ability to effect change, resides in the shadowy hands of unelected technocrats and bankers..

bollocks - and self-deluding bollocks. the power in this debacle has been unecquivically and demonstratably been held and used by democratically elected politicians - just not the ones you support.

it is Merkel, not Draghi or Junker who has decided where and under what terms this ends. it is the EZ finance ministers, all members of democratically elected governments and acting as their states representatives, who have held Tsipras and Greece to the fire long after he told his people they'd loosen their grip.

the power in this comes from the states - not banks, not bankers, and not the servants - and that is what they have been shown to be - in the EU and EZ bureacracies.

the lefts' delusion that this is about banks and bankers is its great failure - it has focused on the strawman because that would be a much easier target and a much more comfortable one. its grotesque failure is there for all to see.

 

[SpackleFrog]

Have you ever been to Cuba?

No. Have you?

 

[ItWillNeverWork]

Oh for goodness' sake. We're talking as if a country has never broken out of a currency union/peg before. We can see historically what happens. It's tough for a few months and then the economy recovers.

 

[Diamond]

No. Have you?

Yes.

 

[MochaSoul]

Anybody has any idea what Varoufakis has been saying on his twitter account? The translators are crap.
https://twitter.com/yanisvaroufakis

 

[ska invita]

Did anyone expect Syriza to a) undo decades of economic mismanagement and b) defeat the EU/ECB/creditors inside six months?

Expected post-referendum to get a much better deal than offered or else leave the eurozone.
What did you expect?

Anybody has any idea what Varoufakis has been saying on his twitter account? The translators are crap.
https://twitter.com/yanisvaroufakis

"Tomorrow Euclid deserves the support of us all. He has my own in full. Then we will evaluate the effect."

Google translate

 

[MochaSoul]

Expected post-referendum to get a much better deal than offered or else leave the eurozone.
What did you expect?

"Tomorrow Euclid deserves the support of us all. He has my own in full. Then we will evaluate the effect."

Google translate

I'm confused. Is he or is he not behind the agreement then?

 

[happie chappie]

You're right to a point but you're exaggerating dramatically. You also forget that Greece still produces a reasonable amount of food, and that the Greek banks do have decent stocks of foreign currency.

In any case, the system we're discussing operated in Cuba for decades and they still managed to operate a bloody good healthcare system - that's light years better than what Greece has now.

It certainly does produce food - a lot of it and it's very nice, But why would farmers want to sell it on the open market for worthless Drachmas that would have probably lost value by the time he'd got home to count the day's takings?

He'd be better off keeping it to eat, or bartering it.

If they sell it abroad, and get paid in Euros, there'd be a strong temptation to hoard them, or have them paid into an offshore Euro account so they never get anywhere near the Greek mainland, let alone the Greek treasury.

As for Cuba - yes it has good healthcare system but is an economic basket case that only survived because it was propped up by the Soviet Union.

It's currency is pretty much worthless outside the country. In fact, I'm not entirely sure how the Cuban currency actually works. It looks pretty complicated to me.

 

[SpackleFrog]

Yes.

And? Got some holiday snaps for us?

 

[SpackleFrog]

It certainly does produce food - a lot of it and it's very nice, But why would farmers want to sell it on the open market for worthless Drachmas that would have probably lost value between the time the sold the vegetables and when got home to count them?

They'd be better off keeping it to eat, or bartering it.

If they sell it abroad, and get paid in Euros, there'd be a strong temptation to hoard them, or have them paid into an offshore Euro account so they never get anywhere near the Greek mainland, let alone the Greek treasury.

As for Cuba - yes it has good healthcare system but is an economic basket case that only survived because it was propped up by the Soviet Union.

It's currency is pretty much worthless outside the country. In fact, I'm not entirely sure how the Cuban currency actually works. It looks pretty complicated to me.

You do understand that I'm not saying a free market system where farmers could sell their produce to whoever they wanted would work right?

Your analysis of Cuba is a little off - it had to survive without much Soviet support from the '70's onwards which is when the dual currency began. The point is it survived and could have moved forward in other ways.

 

[gosub]

Have you ever been to Cuba?

Yep, good example of how a parallel currency fucks things up - bar staff who have access to foreign tips, now earn more than doctors or teachers .I like a buccanaro as much as the next bloke but thats fucked up. Also you go somewhere like Matanzas where they don't need the tourist dollar (or didn't) coz of oil you get a better idea of how paranoid and suspicious they have become. Nice people all the same and worth a visit before 1million yanks fuck it up change it beyond recognition.

Surviving the end of the soviet era, meant cutting down everything and planting sugar, whch incidently was all the soviets wanted from them, that and a sunny atlantic port to boost the moral of good Soviet Navel officers

 

[happie chappie]

You do understand that I'm not saying a free market system where farmers could sell their produce to whoever they wanted would work right?

Your analysis of Cuba is a little off - it had to survive without much Soviet support from the '70's onwards which is when the dual currency began. The point is it survived and could have moved forward in other ways.

Yes - and when the Soviet Union went pop Cuba had to look to Venezuela. It was a mutually beneficial relationship - until the oil price collapsed and Venezuela's economy hit the buffers. Anyway, pretty off topic. Back to the matter in hand . . .

We’ve already discussed in recent posts a parallel currency, exchange controls, capital controls, forcing businesses to pay taxes in Drachmas and so on.

Earlier in the thread someone even suggested issuing a scrip currency to bridge the gap between leaving the Euro and printing enough Drachmas to let the economy function.

Then there was the idea of pegging the Drachma to the Euro on a 1:1 basis.

In the end if Greece leaves the Euro, it’s likely they’d end up chasing their tail, fixing one economic problem and just creating another.

And that’s not even taking into account the political and social upheaval that would take place if the Greeks left the Euro.

Let’s be clear – I’m certainly NOT a cheerleader for the Troika or austerity.

If I had my way I’d increase the bailouts, write off most, if not all, of the Greek debt, so that the country could return to semblance to normality and the long-suffering Greek people would get at least some respite.

But I honestly think that option’s just wishful thinking.

 

[kebabking]

...I'm confused. Is he or is he not behind the agreement then?

he's got a family thing on, obviously he'd like to vote on - arguably - the most important parliamentery vote in Greece since the military dicatatorship, but theres a thing, parents, table booked etc... you know what its like, can't be helped.

 

[Coolfonz]

Expected post-referendum to get a much better deal than offered or else leave the eurozone.
What did you expect?

"Tomorrow Euclid deserves the support of us all. He has my own in full. Then we will evaluate the effect."

Google translate

I didn't expect anything. I hoped Syriza would stay in govt.

And Varoufakis support Euclid...

 

[brogdale]

bollocks - and self-deluding bollocks. the power in this debacle has been unecquivically and demonstratably been held and used by democratically elected politicians - just not the ones you support.

it is Merkel, not Draghi or Junker who has decided where and under what terms this ends. it is the EZ finance ministers, all members of democratically elected governments and acting as their states representatives, who have held Tsipras and Greece to the fire long after he told his people they'd loosen their grip.

the power in this comes from the states - not banks, not bankers, and not the servants - and that is what they have been shown to be - in the EU and EZ bureacracies.

the lefts' delusion that this is about banks and bankers is its great failure - it has focused on the strawman because that would be a much easier target and a much more comfortable one. its grotesque failure is there for all to see.

The representatives of states exerting power over Greece have done so in the interests of those entities to which they have become indebted. That they appear to be wielding power does not equate with ideological agency. They are doing their own paymasters bidding

 

[MochaSoul]

he's got a family thing on, obviously he'd like to vote on - arguably - the most important parliamentery vote in Greece since the military dicatatorship, but theres a thing, parents, table booked etc... you know what its like, can't be helped.

It may well be the case that there is something serious happening with the family. TBF, I'd not have much to say if I were him either. It's capitulation to the "troika" and implosion of Syriza or Grexit and economic implosion. Given that he wanted to save the euro to be able to save lives... I don't know.

 

[MochaSoul]

It may well be the case that there is something serious happening with the family. TBF, I'd not have much to say if I were him either. It's capitulation to the "troika" and implosion of Syriza or Grexit and economic implosion. Given that he wanted to save the euro to be able to save lives... I don't know.

... and let us not forget that what Tsipras has delivered to the Troika has the support of PASOK et al. Talk about getting into bed with the enemy

 

[Diamond]

Also - and peeps here aren't thinking properly about it because we are not part of the Schengen zone is the fundamental EU right of freedom of movement.

What happens if Greece leaves the eurozone and the economy properly goes down the toilet?

Would newspapers like the Daily Mail start campaigning against Greeks crossing out borders?

Would Greece even be allowed to remain in the EU at all?

 

[kebabking]

It may well be the case that there is something serious happening with the family...

it could be, of course it could - shit happens in every family, we've had two PM's running who've lost children while in office - it just looks about as convincing as a giraffe in dark glasses trying to get into a polar bears only nightclub.

perhaps he see's it as more honourable than voting against something he help to create, or voting for something he opposes - either way i doubt (unless it does turnout to be genuine) he'll get much credit for it...

 

[Idris2002]

Could the consequences of Grexit vary according to the steps that lead to Grexit? If SYRIZA is able to say "we did everything to avoid Grexit, but the hegemons in the EU wouldn't have it", will that alter their position if they had said "Grexit or bust" from the beginning? (Regardless of whether either of those things were what they believed in their hearts).

 

[happie chappie]

Could the consequences of Grexit vary according to the steps that lead to Grexit? If SYRIZA is able to say "we did everything to avoid Grexit, but the hegemons in the EU wouldn't have it", will that alter their position if they had said "Grexit or bust" from the beginning? (Regardless of whether either of those things were what they believed in their hearts).

Yes - I suggested above it may alter the political consequences.

Alter the immediate economic consequences of a Grexit? No.

 

[Idris2002]

Yes - I suggested above it may alter the political consequences.

Alter the immediate economic consequences of a Grexit? No.

No, it won't alter the immediate consequences of a Grexit, but it may make a difference to how the masses (in Greece and outside it) perceive Grexit, and how they apportion blame and responsibility for it.

 

[Idris2002]

it could be, of course it could - shit happens in every family, we've had two PM's running who've lost children while in office - it just looks about as convincing as a giraffe in dark glasses trying to get into a polar bears only nightclub.

perhaps he see's it as more honourable than voting against something he help to create, or voting for something he opposes - either way i doubt (unless it does turnout to be genuine) he'll get much credit for it...

It's more honourable than the Irish PM who voted against his own government's contraception bill. . .

You UKers may look at the Greeks, and think "wow, these crazy people", but coming from Ireland I just think "come to our house".

 

[MochaSoul]

No, it won't alter the immediate consequences of a Grexit, but it may make a difference to how the masses (in Greece and outside it) perceive Grexit, and how they apportion blame and responsibility for it.

Making more real the prospects of a future Grexit, you mean?