Greek elections

[Diamond]

What, precisely, do you think he did wrong? Is it the substance i.e. reflecting the clear mandate of the Greek people, or the tone he adopted in negotiations? If the latter, what do you consider would have been a better tone, and why?

The clear mandate of the Greek people...

I he a member of Syriza?

 

[Casually Red]

50bn is 10,000 euros for every person in Ireland. That's fucking mental

What's even more mental is half the bloody country emigrated , again .

 

[Casually Red]

so theres word about Tsipras talking to Putin today...one other thing I dont know if mentioned on this thread is that Greece and Russia signed a big gas pipeline deal last month http://rt.com/business/268279-russia-greece-turkish-stream/


this morning...

not happy

Hopefully just the start .

Christ her face reminds me ofAdolfs last days in the bunker . If her hand starts shaking it'll be a single pistol shot and a gallon of petrol out the back of the reichstag .

 

[Lurdan]

Yesterday SpookyFrank posted a link to a translation of an interesting interview with Piketty in Der Zeit. The version at that original link seems to have been removed for copyright infringement. However the whole thing has been reposted here :

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.

The Greek representative signs the 1953 Agreement.

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: 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.

(...)

 

[Lo Siento.]

The attitude of that Zeit interviewer (and a lot of German citizens according to the polls) is just incredible. Almost as if in the absence of anything positive in German history pre-1945 they've settled on a particular narrative of the "Wirtschaftswunder" on which to base their entire national identity.

 

[Lurdan]

The attitude of that Zeit interviewer (and a lot of German citizens according to the polls) is just incredible. Almost as if in the absence of anything positive in German history pre-1945 they've settled on a particular narrative of the "Wirtschaftswunder" on which to base their entire national identity.

I guess for them, to paraphrase Thatcher, there is no alt-narrative.

Sadly, our equivalent national narrative, in the form of post-Blatcherite political and economic 'realism', is equally pervasive.

 

[Athos]

The clear mandate of the Greek people...

I he a member of Syriza?

No, he's not member of Syriza, but he was appointed finance minister in a Syriza government. So are you saying that he didn't have a clear mandate to do what he did? Is that your criticism of him? Or is your criticism of the tone he adopted in negotioations? Or both, or neither? If you are critical of the tone, what tone would have been better and why?

 

[pocketscience]

The attitude of that Zeit interviewer (and a lot of German citizens according to the polls) is just incredible. Almost as if in the absence of anything positive in German history pre-1945 they've settled on a particular narrative of the "Wirtschaftswunder" on which to base their entire national identity.

Die Zeit is a fairly good german paper and often very critical of the the german state and there's no way they'd send such a numpty to ainterview a star economist.
Tbf, I think the they've purposly adopted the role in that interview of a typicaly naive german citizen that's been subjected to the barrage of porpaganda that's been in the German MSM for the last 5 years. A Bild reader, if you like.
I think you're right though (or at least the polls you'seen*), in that most German citizens seem to have fallen hook line and sinker to the "lazy greek spongers" narative pushed by the populist media (an attitude largely fueled by their callous Finance Minister)

*do you have sources to these polls

 

[MochaSoul]

Taking the IMF out of the equation for a second, If the bulk of the member states of the European Union is reduced inflicting pain on another member, then everyone's lost.

I think the main problem of this so called "union" is precisely that no one is prepared to ponder "It could be me/us there in Greece right now." But I'm not surprised at all by this. A bit of research in what "aid" actually means when it comes to, say, Africa, says an awful lot.

What's even more mental is half the bloody country emigrated , again .

Two or three years ago the very person of the Portuguese prime minister urged the youth of the country to do exactly this. Ironically, Angola has been a prime destination of Portuguese emigrés. It's not even clever in the long run. Neither economically (in view of the rapid ageing of the populous, brain drain, etc) neither humanely.

 

[kebabking]

...They made the attempt and it looks to have shook the troika. Suck it up

they've shaken the troika up to the degree that lending to the Greek banks has been restricted further and the Germans are saying - publicly - that the Eurozone should stop wasting its time talking about a new deal for Greece and instead start planning the Greek exit, and how to manage the fall out from that. yes, fucking terrified. obviously.

their twattery - their language, their arrogance in dealing with people who'se support they need - has made a bad situation worse. the EZ's proposals are unsustainable, and its probable that a mutually acceptable deal was never going to be achievable, however amusing little quips about Merkel 'acting like a concentration camp guard' have ensured that an otherwise amicable and mutually supporting parting of the ways is now not going to happen. Germany will, in a fit of pique, give Greece the finger. Greeces' problem is not now whether that is right or wrong, or how it got there - but dealing with it. heroic dignity does not feed babies.

 

[Patteran]

I think the main problem of this so called "union" is precisely that no one is prepared to ponder "It could be me/us there in Greece right now." But I'm not surprised at all by this. A bit of research in what "aid" actually means when it comes to, say, Africa, says an awful lot.

(From the Zizek article posted above (which repeats sections of a piece for the LRB from two years ago) - 'Quid rides? Mutato nomine, de te tabula narratur')

 

[MochaSoul]

I bookmarked it yesterday, Patteran . Will read it now. Thanks

 

[pocketscience]

*do you have sources to these polls

It's OK Lo Siento. I've found one from before the referendum here. Would be interesting to see a post ref poll.

In a representative N24 -Emnid survey 50 percent of respondents criticize the policy of the Federal (German) Government towards Greece as "rather poor". Only 40 percent of Germans think the Berlin course in the Greek bailout to be "rather good".

Most Germans believe a Grexit would be the wrong way out of the crisis for Greece. Only 31 percent of respondents believe that a Grexit would improve the economic situation of the Greeks. 59 percent of respondents suspect it would be better for the Greeks in the future with the Euro than without.

But will the Greeks in the referendum on Sunday really decide for the euro rescue plan of EU (even if this is no longer officially on the table)? Or would they prefer a refusal, as demanded Prime Minister Tsipras? The Germans are uncertain. 44 percent of respondents believe that the Greeks will accept the EU proposals. 41 percent of Germans suspect that the Greeks will decide against the austerity measures demanded by the EU - and therefore follow the will of their government.

 

[butchersapron]

Give the recent turn of discussion, i think this may be a good time to post a piece from Wolfgang Streeck that directly challenges a lot of the seeming common sense about the german state/capital and planning, as well as offering some thoughtful and relevant stuff on the wider 'project' esp on the conflicting political management of southern and northern capitalist economies:

German Hegemony: Unintended and Unwanted

In Germany the Bundesbank and the (overwhelmingly ordoliberal and anti-Keynesian) economics profession were squarely against monetary union, afraid that it would jeopardize the German “stability culture”. Even Kohl would have preferred currency union to be preceded by political union. His European partners, however, wanted the common currency, not in order to give up their sovereignty, but to restore it. Seeing German unification at risk, Kohl agreed to monetary union first, in the hope for political union somehow to come about later as a “spill-over”. When powerful forces in his political camp hesitated to follow him, he overcame their resistance by insisting that the common European monetary regime be designed exactly on the German model, with the ECB as a giant replica of the Bundesbank.

Today it is Germany, together with countries like the Netherlands, Austria or Finland, that is reaping the benefits of EMU. But it is important not to forget that this has been so only since the financial collapse of 2008. During the first years of EMU, Germany was “the sick man of Europe”, and monetary union had a lot to do with it (Scharpf 2011). The common interest rate set by the European Central Bank, which had to take into account the economies of all member countries, was too high for a low-inflation political economy like Germany.

It is an irony of history, and one that cannot have escaped the Chancellor’s attention, that EMU, which was supposed to cement European unity forever, is now about to drive Europe apart. German policy is slowly beginning to realize that the conflict inside and over EMU is not just about a one-time “rescue” of the Greek state or the French (and German) banks. Rather than disappearing after some kind of skillful heroic surgery, to give way to renewed unity, it is inherent in the very structure of EMU. EMU unites very different national societies with highly divergent economic institutions, practices and cultures reflected in different social contracts regulating the intersection between modern capitalism and social life. Important elements of these divergent political-economic orders are their respective monetary regimes.[1] In a stylized account, the countries of the Mediterranean in particular have developed a kind of capitalism in which growth is primarily driven by domestic demand, if necessary stimulated by inflation propelled by public deficits and strong trade unions benefiting from high employment security, especially in a typically large public sector. Inflation, in turn, makes it easier for the state to borrow as it devalues the accumulated debt. Corresponding to this is a highly regulated, often public or semi-public national banking system. All these together make it possible to align more or less well the interests of workers and employers, in particular in domestically oriented small-firm industries. The price for social peace of this kind is declining international competitiveness, which must be compensated by occasional devaluations of the national currency, at the expense of foreign exporters. This, of course, requires monetary sovereignty.

The Northern European economies, above all Germany, work differently. They derive growth from successful competition in foreign markets, which makes them averse to inflation. This applies also to workers and trade unions, especially today as rising costs can easily cause outward migration of production. Being able to devalue the national currency is not important for an economy of this sort. While Mediterranean countries, including to an extent France, were best served in the past by a soft currency, countries like Germany have historically adjusted to a hard-currency monetary policy. This makes them averse, not just to inflation but to debt as well, even though the interest they typically have to pay is low (also because their accumulated debt is low). That they can do without an accommodating monetary policy furthermore allows them to live without the risk of bubbles blowing up in asset markets. It also benefits their savers, of which there are many.[2]

Other perspectives are available, neo-mercantilism for example.

 

[phildwyer]

he'll be spending the rest of his life in rented accommodation and driving an old banger.

I faıl to see the problem.

 

[phildwyer]

Generally it’s not a good idea to call your bank manager a cunt than then go in the next morning and ask for a massive loan.

Makes no dıfference. Banks don't make decısıons based on whether or not they lıke your tone. All they care about ıs whether or not they can make a profıt out of you. If they thınk they can, you can call them cunts tıll the cows come home--they're not human, after all.

 

[phildwyer]

Just to be serious for a second. Could set an important precedent. If Greece successfully sticks two fingers up to the IMF it'll fuck up the neo-liberal thing.

Precısely. In ıtself the Greek vote changes lıttle. As an example showıng that capıtal ıs not all-powerful, ıt has the potentıal to change a great deal.

 

[DotCommunist]

heroic dignity does not feed babies.

niether does continued austerity forever- or, well it feeds them enough to survive and grow up with the lifelong problems you get you from childhood malnutrition. Nasty, brutish and short is the life on offer. So its not about heroisms or flying the red flag its about 'this cannot continue', but by all means keep casting yourself as the hard headed realist while ironing your newspaper

 

[pocketscience]

niether does continued austerity forever- or, well it feeds them enough to survive and grow up with the lifelong problems you get you from childhood malnutrition. Nasty, brutish and short is the life on offer. So its not about heroisms or flying the red flag its about 'this cannot continue', but by all means keep casting yourself as the hard headed realist while ironing your newspaper

Not enough money to live on, yet too much to die on.

 

[pocketscience]

Give the recent turn of discussion, i think this may be a good time to post a piece from Wolfgang Streeck that directly challenges a lot of the seeming common sense about the german state/capital and planning, as well as offering some thoughtful and relevant stuff on the wider 'project' esp on the conflicting political management of southern and northern capitalist economies:

German Hegemony: Unintended and Unwanted

Other perspectives are available, neo-mercantilism for example.

Along the lines of "German Hegemony: Unintended and Unwanted" the guardian editorial piece today asks Merkel to step up to the plate.
It may seem like the Germans are apprehensive to be seen to be running things in Europe, but it doesn't mean that they aren't already. I think Merkel (and the governing CDU) have modeled her external image on our Queen. More a kind of neutral states-person of Europe than the baggage ridden role of Deutsche Fuhrer.
From the Ukraine crisis and now to Greece, Germans are increasingly asking themselves "when's she going to make a clear foreign policy decision" while all the time it's the Schaeuble's & Seehofers that call the shots. There are plenty of German right wingers in power that anything but make a secret of their will for German Hegemony.

 

[kebabking]

...its about 'this cannot continue'...

and that which ends the crippling austerity is good, and that which allows it to continue - whether inside the EZ or outside it - is bad.

tell me, what effect do you think the Greek governments comments about concentration camp guards, terrorism and blackmail had on the German governments willingness to be more realistic about what could and could not be paid back and both how that might be done and over what timescale?

Syriza tried to acheive a good thing, but they went about it in a self-defeating way. if a deal is done it will be worse, later and harsher than it might otherwise have been, and if a deal is not done then a Greek suspension, and then exit from the EZ, will be worse than it might otherwise have been.

so, good or bad?

 

[co-op]

if you think Greece has nothing to lose you've listening to shrills on the internet too long.

Greece has (for example) a tourism industry that accounts for around 16% of all employment in Greece, around 18% of its GDP and puts around €25billion in its coffers every year. if Greece either stagnates in a cashless banking crises, or leaves the EZ and uses a worthless currency that no one outside of Greece will accept in return for goods or services, then it won't be able to do simple things like buy food for tourists to eat in hotels, or buy aviation fuel to refuel the tourist flights, or buy petrol for taxi's and buses.

Greece grows around 40% of the food it consumes, and it has a handful of oil fields that produce a fraction of its needs - it is entirely dependent on imports like this to remain a destination for anyone other than the kind of people who holiday in North Korea - without a currency that people with those commodities will accept then this country with nothing to lose will lose an awful lot more.

theres always a worse, and it can get a lot worse.

You're right that much pain can be inflicted on the Greek people by the wankers in the troika but you're completely wrong to suggest that it can be avoided by doing as the troika says; that would simply mean permanent austerity and contraction.

The fact that tourism is so important to the Greek economy is a key reason that Greece can leave the Euro without long term problems.

If Greece leaves the euro and issues its own currency there would be short term pain as imports shot up in price (as the new currency devalued) and this would mean that some supply of basic (imported) commodities would need to be guaranteed by another state - Russia would be the obvious candidate here. But that's the downside of devaluation; the upside is that Greek goods and services would simultaneously become vastly cheaper; it would be by far the cheapest holiday destination in Europe - probably 75% cheaper than Spain or Portugal. There would be a very rapid boom in tourism - and in exports of other goods.

It is the present situation that will destroy the Greek economy; in the long term - by doing as the troika says that would simply mean permanent austerity and contraction, in the short term, the troika can (as you say) destroy Greece's tourist industry by strangling their liquidity. Either way, out would clearly be the best long term solution.

 

[Diamond]

No, he's not member of Syriza, but he was appointed finance minister in a Syriza government. So are you saying that he didn't have a clear mandate to do what he did? Is that your criticism of him? Or is your criticism of the tone he adopted in negotioations? Or both, or neither? If you are critical of the tone, what tone would have been better and why?

He did a bad job.

It looks like his office leaked delta views of negotiated documents while they were being negotiated.

There is no surer way to kill off talks than leak confidential information.

 

[ska invita]

Costas Lapavitsas.....interviewed yesterday

Part Two
time to nationalise the banks!
interesting to hear how much bias there was in the Greek media to a Yes vote... something we can't get a feel of from here...

 

[kebabking]

..Either way, out would clearly be the best long term solution.

i agree entirely - and i'm absolutely not writing as a fanboy for the troikas utterly self-defeating idiocy, merely suggesting that deciding a week before the Greek banking system runs out of money that exit might be on the cards was a spectacularly stupid risk.

Syriza have been at this for 5 months, they must have known months ago that the kind of deal that Greece could live with in the long term was simply not on the cards. had they exited in - for example - April, they could have gone with a cushion of hard currency for imports and allowed the devaluing effect of the New Drachma to kick in for the summer season. as you say, that would mean Greece becoming the cheapest place to holiday in Europe - and, lets be frank, after Tunisia and the continuing turmoil in Egypt, and the endless media stories about Italy and its migrant problems - one of the few safe and desirable destinations in the Med.

 

[butchersapron]

Michael roberts has an excellent summary of everything here - including making clear this is a crisis of capitalist profitability and european management of that, not of parties or personalities.

 

[pocketscience]

He did a bad job.

It looks like his office leaked delta views of negotiated documents while they were being negotiated.

There is no surer way to kill off talks than leak confidential information.

it was the Eurogroup that stated that game back in February. They leaked Varoufakis' first introductory letter ffs

 

[Lo Siento.]

He did a bad job.

It looks like his office leaked delta views of negotiated documents while they were being negotiated.

There is no surer way to kill off talks than leak confidential information.

Surely, but surely, we're beyond the infantile idea that it is the skill of negotiators that determines the outcome of tussles that are ultimately over power and leverage?

 

[Diamond]

it was the Eurogroup that stated that game back in February. They leaked Varoufakis' first introductory letter ffs

OK, perhaps you can prove me wrong but there are a couple of points to make here.

First, the link that you provided does not indicate the source and, given that it references a Greek newspaper as the recipient, would seem to suggest that it was Greek.

Second, that is very different from leaking a delta view of a contract under negotiation. A hell of a lot has been made about the "red ink" version of the latest bail-out that was returned to Greece but if you publish the actual documents under negotiation that have not been agreed, you can be fairly certain that the negotiations will not improve.

 

[Diamond]

Varoufakis may be a very good economist but that in no way equates to being a good negotiator.