Greece – damned if they do

Written By: Anthony R0bins - Date published: 11:20 am, July 2nd, 2015 - 124 comments
Categories: capitalism, Europe - Tags: crisis, greece, IMF

Greece is in an impossible situation. It’s clear that rejecting the demands of the IMF / “troika” might lead to instant catastrophe. But is it widely understood just how bad accepting those demands would be? An excellent piece in The Guardian:

IMF: austerity measures would still leave Greece with unsustainable debt

Secret documents show creditors’ baseline estimate puts debt at 118% of GDP in 2030, even if it signs up to all tax and spending reforms demanded by troika

Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors.

The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.

The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession.

The documents admit that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes.

Even under the best case scenario, which includes growth of 4% a year for the next five years, Greece’s debt levels will drop to only 124%, by 2022. The best case also anticipates €15bn (£10bn) in proceeds from privatisations, five times the estimate in the most likely scenario.

But under all the scenarios, which all assume a third bailout programme, looked at by the troika – the European commission, the European Central Bank and the IMF – Greece has no chance of meeting the target of reducing its debt to “well below 110% of GDP by 2022” set by the Eurogroup of finance ministers in November 2012.

In the creditors own words: “It is clear that the policy slippages and uncertainties of the last months have made the achievement of the 2012 targets impossible under any scenario”. …

Apocalypse now or decades of servitude. Impossible dilemma. Greece needs a real rescue package of debt relief.

124 comments on “Greece – damned if they do ”

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Sable 1

2 July 2015 at 11:36 am

In other words let the corporate sharks finish the job. Come in and privatize everything at fire sales prices, leaving the average Greek destitute. Sounds kind of familiar…
- McFlock 1.1
  
  2 July 2015 at 12:11 pm
  
  Yup. Fuck the currency and build up debt so much that when the overseas debt is called in “There Is No Alternative”.
  
  They did it in the 80s and key are setting us up for it again.
  - Gosman 1.1.1
    
    2 July 2015 at 12:42 pm
    
    Are you suggesting NZ cuts Government spending to reduce the debt burden in NZ so this scenario can be avoided? If so, we are in agreement.
    - McFlock 1.1.1.1
      
      2 July 2015 at 1:05 pm
      
      Only on wasteful items like fresh limos, curvy screens and ineffecient charter schools.
      
      But then its expenditure should be raised on things that actually help people, like state housing and decent benefits and healthcare and infrastructure construction.
      
      So the government might also need to boost its income by reversing even the last 10 years of tax cuts.
- Gosman 1.2
  
  2 July 2015 at 12:13 pm
  
  Many of these assets require substantial investment to increase their economic potential. Where do you think this money will come from if the assets are owned by the State?
  - McFlock 1.2.1
    
    2 July 2015 at 12:43 pm
    
    Taxes. Going by Syriza so far, proportionately paid by the rich rather than a flat rate, and without the motive to loot them for as much profit as possible.
    
    So, yeah, better than privatisation to sociopathic corporations.
  - tracey 1.2.2
    
    2 July 2015 at 1:05 pm
    
    well, there will be some income that is no longer going out on interest repayments…
    
    but this is all getting very repetitious… by everyone.
mickysavage 2

2 July 2015 at 11:37 am

Thom Feely has set up a Greek bailout crowd fund! The fund is heading towards a million euros. If a hundred million progressives could contribute $10 each this would make a big dent in the problem …

He is quoted as saying:

“I set up the crowdfunding campaign to support the Greek bailout because I was fed up with the dithering of our politicians. Every time a solution to bail out Greece is delayed, it’s a chance for politicians to posture and display their power, but during this time the real effect is on the people of Greece.

I wondered, could the people of Europe just have a crack at fixing this? Less talk, more direct action. If we want to sort it, let’s JFDI (just effing do it)! On Tuesday, between leaving for work and returning home, the crowdfunding page had raised over €200,000 in around six hours, which was incredible. This isn’t just about raising the cash, though. In providing the perks, we would be stimulating the Greek economy through trade – buying Greek products and employing Greeks to source and send the perks out.”

http://www.theguardian.com/commentisfree/2015/jul/01/greek-bailout-crowdfund-politicians-euros-people
- Melb 2.1
  
  2 July 2015 at 1:35 pm
  
  Are they then going to raise the €7 billion payment due next month?
  - tracey 2.1.1
    
    2 July 2015 at 1:42 pm
    
    if Greece defaults, they will default on the lot. You never declare part-bankruptcy. You are either bankrupt or not…
    - Phil 2.1.1.1
      
      2 July 2015 at 6:09 pm
      
      That’s not right. Bankruptcy and Default are two fundamentally different concepts.
      
      Bankruptcy is at all times a balance sheet phenomenon; companies go bankrupt when their liabilities exceed their assets. Countries don’t really go bankrupt per-se, because their assets (i.e. the country) tend to be of significantly more value than any loans they accrue.
      
      The Greeks, on the other hand, are now in default. Default is an inability to make payments as they fall due. If, by some miracle, Greece is able to make payment on other loans in the next few weeks, they would still be in default of their IMF loan.
      
      There’s a really good Barclays ‘roadmap to referendum’ flowchart (low resolution version) here:
      
      http://www.zerohedge.com/news/2015-07-01/next-steps-greece-complete-post-referendum-roadmap
      
      Key dates are:
      30 June – failure on IMF repayment
      10 & 17 July – Failure on Greek treasury bills
      14 July – Failure on Samurai Bond (yen denominated bond issued by Greece in the Japanese market)
      20 July – Failure on ECB bond.
      - mickysavage 2.1.1.1.1
        
        2 July 2015 at 7:54 pm
        
        Some interesting legal issues arise. I can’t think of a case where a first world nation has defaulted. Countries cannot be made bankrupt. Although creditors could conceivably sue them in their or other countries courts and then try and seize assets …
        
        te reo putake 2.1.1.1.1.1
        
        2 July 2015 at 8:04 pm
        
        I suspect Argentina might the nearest example and that wasn’t pretty:
        
        http://www.bbc.com/news/world-europe-33324363
        
        http://www.huffingtonpost.com/joseph-e-stiglitz/argentina-greece-default_b_7697838.html
        
        greywarshark 2.1.1.1.1.2
        
        3 July 2015 at 11:49 am
        
        @mickysavage
        Nations not of first world defaulting. I looked on google about the failed local areas in the USA that have defaulted as that country has lost much of its manufacturing base. There are many of them, and there was also something about Puerto Rico. (It has been part of the USA and is now in strife, Cuba has not been in the club and possibly about as well-off.)
        
        A Google search on keywords – usa cities defaults on debt – brings up a number of good headings on this subject which might offer background on this topic which may come close to home.
        
        http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html
        Google – Nov 7, 2014 – … in debt. Detroit previously became the largest U.S. city ever to file for bankruptcy in 2013. … Detroit’s Recovery Plan Increases Default Risks, Says Moody’s … that left the city awash in debt and struggling to provide basic public services.
        but
        http://www.usatoday.com/story/money/2015/06/29/puerto-rico-debt-crisis-default/29458475/
        Google – 3 days ago – Puerto Rico, which became a territory of the United States in 1898 after a war with Spain, cannot legally file for bankruptcy, as American cities like Detroit have …
johnm 3

2 July 2015 at 11:41 am

Greece can save itself by permanently rejecting all the debt as odious and as nearly criminal, then exiting the euro and if need be the EU. Result no debt no austerity. Greece will always make a living from tourism and now the energy gas pipeline Russia intends to pass through Greece. The new Brics bank will help out if necessary. Also all looted assets must be seized back perhaps only one national bank to operate meaning no more private debt creation internally.

” Like Marathon, Thermopylae, Plateau and Mycale roughly 2,500 years ago, Western freedom again depends on Greece. Today Washington and its empire of European vassal states are playing the part of the Persian Empire, and belatedly the Greeks have formed a government, Syriza, that refuses to submit to the Washington Empire.

Few people understand that the fate of Western liberty, what remains of it, is at stake in the conflict, and, indeed, the fate of life on earth. Certainly the German government does not understand. Sigmar Gabriel, a German vice-chancellor, has declared the Greek government to be a threat to the European order. What he means by the “European order” is the right of the stronger countries to loot the weaker ones. ”

http://www.paulcraigroberts.org/2015/07/01/greece-can-save-west-paul-craig-roberts/
- Olwyn 3.1
  
  2 July 2015 at 12:29 pm
  
  That is a very good article johnm, and this is the telling sentence: Looting is the only way left for the Western financial system to make money. That is what happens when all alternatives, including manufacturing, are gradually banished, being potential breeding grounds for alternative power bases to form.
  
  It was also in Greece that Solon enacted laws against lending money to people against their property and then seizing their property and selling them into slavery. At the moment we have Scotland trying to retreat from this mess, Bernie Sanders gaining some real support in the democratic primaries, Syriza in Greece and growing movements in several countries – it may take a few unsuccessful feints before a serious dent is made in this toxic, predatory system, but I still hold hope that Greece will return a resounding NO on Sunday, and at least succeed in gaining some useful traction.
- Gosman 3.2
  
  2 July 2015 at 12:37 pm
  
  How is this anything to do with the Washington Empire when it is generally involving Eurozone nations? I remember a few years ago people were arguing that the US was trying tto undermind the Euro as a counter to the Dollar now suddenly the Euro is meant to be something that the US wants to promote.
  - johnm 3.2.1
    
    2 July 2015 at 12:55 pm
    
    Hi Gosman
    
    ” How is this anything to do with the Washington Empire ” Read the above article by Paul Craig Roberts and you’ll understand the U$ connection.
    - Gosman 3.2.1.1
      
      2 July 2015 at 3:10 pm
      
      Read it. It is the usual conspiracy theory nonsense that you come across. No hard facts just a bunch of rather far fetched opinions.
      - adam 3.2.1.1.1
        
        2 July 2015 at 10:23 pm
        
        Bit like your economic theories :p
- johnm 3.3
  
  2 July 2015 at 11:01 pm
  
  US Hedge Funds Get Bailed Out if Greeks Pass Bailout Referendum
  
  https://www.youtube.com/watch?v=EiUdwk3ln74
  
  https://www.youtube.com/watch?v=glaZOG62flA
  
  One of the main points is the debt could be written off but the EU wants to set an example of Greece so that Italy and Spain don’t do the same thing. U$ derivative bets are hugely tied up on the outcome of the referendum.
  
  Michael Hudson is interviewed here, he is a wold expert on the tricks of the financial neoliberal ponzi scheme markets.
- greywarshark 3.4
  
  3 July 2015 at 12:57 pm
  
  Britain became great…by Elizabeth 1 with careful planning and protection by her spymaster from plots and also sending out sea captains to seize Spanish It is interesting reading how countries managed to build their coffers.
  
  In 1562 Elizabeth sent privateers Hawkins and Drake to seize booty from Spanish and Portuguese ships off the coast of West Africa.[17] When the Anglo-Spanish Wars intensified after 1585, Elizabeth approved further raids against Spanish ports in the Americas and against shipping returning to Europe with treasure.
  https://en.wikipedia.org/wiki/Elizabethan_era
  
  About the good old days when the USA was starting and slaves brought good money.
  Making a good quid in the old days
  
  Here’s an interesting warfare link with created images of the time though not relevant. Just free and gratis.
  http://www.twcenter.net/forums/showthread.php?625366-For-King-and-Country-%28Great-Britain-AAR%29-Updated-June-13-2015/page6
Macro 4

2 July 2015 at 11:46 am

There is nothing for it but for Greece to vote “NO”. A “YES” vote will still leave them with a huge debt and decades of poverty foisted upon them by the wealthy few who have no thought as to the deprivation they impose on others so that they may live in obscene luxury. It is highly ironic that the one Nation that seems to be leading this charge for the imposition of retributive penalties (Germany) is the one which suffered so badly after WW1, and would not be in the position it it is in today, had it not had real rescue packages in the early 50’s after its economic collapse following WW2.
http://www.economist.com/blogs/freeexchange/2012/06/economic-history
Gosman 5

2 July 2015 at 12:07 pm

The country will likely need substantial Debt relief. They will also likely get it but not before they implement some serious structural reforms to show their creditors that they are not likely to get back in to the situation that they got themselves in to in the first place.
- vto 5.1
  
  2 July 2015 at 8:30 pm
  
  “but not before they implement some serious structural reforms to show their (borrowers) that they are not likely to get back in to the situation that they got themselves in to in the first place.”
  
  you surely talk of the lenders gosman, the loose lenders, so I have taken the liberty of correcting your last sentence…
Gosmel 6

2 July 2015 at 12:10 pm

The trouble is syriza thinks they can vote for other nations to cut their debt burden AND give them even more cash so they can avoid dealing with the structural issues of the country. Voting doesn’t work that way. Just as we can’t vote for say Australia to allow New Zealanders better access to their social welfare system neither can the Greeks directly influence how the German or French governments treat Greece.

[Stick to one handle, Gossie. TRP]

Apologies. Your website is forcing me to enter my user name and e-mail every time and I am obviously not noticing what I am typing sometimes.
- johnm 6.1
  
  2 July 2015 at 12:53 pm
  
  Hi Gosmel
  
  The structural issue here is that Greece is being looted and financially pillaged!
- te reo putake 6.2
  
  2 July 2015 at 12:57 pm
  
  No worries! The comments go into moderation, so it’s a minor pain to release them. No biggie.
Clean_power 7

2 July 2015 at 12:13 pm

The “NO” vote will cause chaos and social unrest almost immediately once the money runs out, despite Syriza and Mr Tsipras’ promises. On the other hand, the “YES” vote will give the Greeks a few years of hardship (they have to learn to work harder, after all), before any respite. Difficult, very difficult decision.
- Gosman 7.1
  
  2 July 2015 at 12:30 pm
  
  Syriza is also acting in a very dishonest manner in relation to the vote as they are pretending that the Greek people can vote No and still remain in the Eurozone. The Referendum should be about whether the Greek people want to keep the Euro not whether they want to agree to more Austerity. How many people would agree to accept cuts to spending and greater taxation?
  - johnm 7.1.1
    
    2 July 2015 at 12:52 pm
    
    Ho Gosman
    Syriza is trying to lead the people through this painful decision process gradually and not all of a sudden.
    - Gosman 7.1.1.1
      
      2 July 2015 at 12:56 pm
      
      By lying to them. Don’t you think political parties should be honest and upfront about the costs as well as benefits of their policies?
      - tracey 7.1.1.1.1
        
        2 July 2015 at 1:08 pm
        
        yes I do but you don’t based on your own vote casting. 17% of your preferred party’s MPO’s have been convicted of fraud or deception, a former candidate in jail for fraud (Swney) and the continued propping up of an increasingly (un) transparent Government in the National party.
      - Clean_power 7.1.1.1.2
        
        2 July 2015 at 1:24 pm
        
        They should. That is why Mr Tsipras will find himself forded to resign after a possible YES victory. If the NO wins, people will blame him for the chaos to come. Either way he is fighting a lost war.
      - mikesh 7.1.1.1.3
        
        3 July 2015 at 2:49 pm
        
        Advising them to vote “NO” is not the same as lying to them, unless of course you accept that advising them to vote “YES” would also be lying to them – about the consequences of austerity.
  - tracey 7.1.2
    
    2 July 2015 at 1:43 pm
    
    Wasn’t there a suggestion the other day that there is no “throwing out” provision in the Eu agreement?
    - Gosman 7.1.2.1
      
      2 July 2015 at 1:56 pm
      
      That is correct but there is also no provision for the ECB to provide an endless supply of cash to the Greek banks either. What will likely happen is the banks will collapse and the Greek economy will grind to a halt as there is little capital to invest and the payments system will have broken down. The Syriza led government could continue to try and keep going with what little Euro’s they could scape together but they wouldn’t be able to easily pay people because there would be no Banks left to put money in to. They would have to try and save the financial system by creating an artificial script which would be essentially a separate currency and they will have left the Eurozone by default.
      - tracey 7.1.2.1.1
        
        2 July 2015 at 2:03 pm
        
        Yes, Gosman, you are repeating yourself. They are fucked if they pay and fucked if they don’t pay.
        
        What did you think of the NZI effectively endorsing their defaulting?
        
        Gosman 7.1.2.1.1.1
        
        2 July 2015 at 2:45 pm
        
        I doubt it has stated what you think it has. It is true that Greece would have been better with their own currency. The problem now is that exiting the Eurozone will probably be more painful than simply adopting stricter austerity in the short to medium term. Greece could possibly stay if they increase their productivity AND ensure their public finances are sorted out AND get debt relief (which is likely still on the cards).
        
        McFlock …
        
        2 July 2015 at 2:59 pm
        
        So three ifs and a might eases short to medium term suffering while being worse off in the long term?
        
        Yep, sounds like the typical tory idiocy.
- AmaKiwi 7.2
  
  2 July 2015 at 11:49 pm
  
  @ Clean_power: “they (the Greeks) have to learn to work harder”
  
  How do you work harder if there are NO jobs?
  
  How do you hire workers if no one has any money to buy anything from you?
  
  Clean_power, Think! I know thinking can be challenging but please give it a try.
James 8

2 July 2015 at 12:15 pm

Thom Feelys crowd funding is a laugh.

Completely useless and wont help at all.

Its fixed funding – so unless they get to the entire amount 1.6b then everybody gets a refund and Greece gets zero.

So people can safely donate, feel good, then get their money back. The way its looking even if Mickeys 100 million progressives donated 10 euro – Greece still would not get a cent.

BTW – where are all the progressives ?? 503 million people in the EU and only 72k have made a donation.
- tracey 8.1
  
  2 July 2015 at 1:09 pm
  
  Perhaps it is too subtle for you James, but yes I think it is actually probably just a gimmick to point to how ridiculous this has all become.
Eric 9

2 July 2015 at 12:32 pm

Saying “NO” and exiting the Euro and the EU would an answer if Greece would have properly prepared for that possibility. As I see it, they are going to require a monumental humanitarian effort from total financial collapse or a deal. A regime change occurs either way. The government hugely miscalculated by pissing off the rest of European and trying to “game” the system with no Ace in the hole… you can’t just change currencies overnight, such a thing requires planning on the order of months.

http://www.telegraph.co.uk/finance/economics/11708576/How-do-you-change-a-currency-fast.html
James 10

2 July 2015 at 12:34 pm

The Greeks were stupid enough to vote Syriza in. Im thinking they will possibly be stupid to vote “No” this weekend.
- Gosman 10.1
  
  2 July 2015 at 12:40 pm
  
  The Greeks have a long and inglorious tradition of voting for political ideas that will cause them long term suffering and then trying to blame the outcome on others so I share your skepticism on the Greeks making the sensible choice on the weekend.
  - johnm 10.1.1
    
    2 July 2015 at 12:47 pm
    
    Hi Gosman
    Your statement applies to NZ as well. Social suffering has hugely increased here since 1984.
    - Gosman 10.1.1.1
      
      2 July 2015 at 12:57 pm
      
      Even before 1984.
      - McFlock 10.1.1.1.1
        
        2 July 2015 at 1:06 pm
        
        not as much as after.
  - tracey 10.1.2
    
    2 July 2015 at 1:10 pm
    
    by sensible choice you mean the one YOU think they should make. If they vote “no” they will have the CEO of that doyen of socialism in NZ, the New Zealand Initiative, agreeing with them.
  - mikesh 10.1.3
    
    3 July 2015 at 3:05 pm
    
    The Greeks of course are not entirely blameless in all this, but the moneylenders must have known what they were lending into. I suspect they were expecting a subservient PASOK government to remain in office and got a rude shock when the people elected SYRIZA.
    
    It is probably greed for profit that is behind this sort of dodgy lending.
- johnm 10.2
  
  2 July 2015 at 12:49 pm
  
  Hi james
  
  They’ll be definitely stupid if they don’t vote no to being slowly strangled by the Monty Python Troika!
  - tracey 10.2.1
    
    2 July 2015 at 1:12 pm
    
    john and james define sensible as;
    
    people doing what James and Gosman think they should do
    
    and stupid as;
    
    people doing what James and Gosman think they shouldn’t do.
    
    BUT it is nowhere as black and white as James and Gosman keep making out. This is clearly a choice between bad and bad (not right and wrong).
    - Puckish Rogue 10.2.1.1
      
      2 July 2015 at 3:55 pm
      
      Sounds alot like the opinions on this site
      - Tracey 10.2.1.1.1
        
        2 July 2015 at 4:07 pm
        
        james and gosman are commenters on this site
        
        Puckish Rogue 10.2.1.1.1.1
        
        2 July 2015 at 4:16 pm
        
        You know what i mean
        
        adam …
        
        2 July 2015 at 10:27 pm
        
        PR speak for we’re right because we’re right. Man Puckish Rogue, your smugness is painful at times.
Chooky 11

2 July 2015 at 1:13 pm

‘Greek PM: We aim to seal deal with creditors after referendum’

http://rt.com/news/271036-tsipras-speech-deal-referendum/

“As EU officials have agreed to pause the Greek debt talks, PM Alexis Tsipras underlined his commitment to the referendum saying that any statements about expelling Greece from the Eurozone should Sunday’s referendum result in a “No” vote are a bluff…

…”A ‘No’ answer in the referendum would be an important step to getting a better deal – it does not mean a break-up with Europe,” Tsipras said. “I fully understand the difficulties, and I will do everything in my power so that they are temporary.”Those who say the government has a plan to exit Europe are lying,” he added.

“The referendum has nothing to do with Greece staying in the Eurozone, no one can doubt that,” Tsipras said, adding that any threats to expel Greece from the currency union are a bluff.

Should Greece receive a positive answer from the lenders to the suggestions it made about a new deal, the Greek government will “react immediately,” the prime minister said….
SPC 12

2 July 2015 at 1:43 pm

Anywhere there is a common currency and variable debt cost an economic crisis will occur.

And in the instance of the EU, economic crisis leads to the subordination of national democracy.

What we are witnessing is how the EU has become via the euro a mechanism by which the economically dominant nation within the EU effectively reigns. France has succeeded in binding German economic power within a union/France has realised the German will to supremacy within Europe.

It is the continental equivalent to how the US dollar as global reserve currency allows the USA cheap cost of debt and thus global power.
e-clectic 13

2 July 2015 at 1:48 pm

All those billions that were borrowed didn’t vanish into thin air, they ended up somewhere in someone’s hands and are now presumably in a bank/s somewhere or under a lot of mattresses. Whose?
- Macro 13.1
  
  2 July 2015 at 2:41 pm
  
  Arms producers.
  http://www.theguardian.com/world/2012/apr/19/greece-military-spending-debt-crisis
  - Chooky 13.1.1
    
    2 July 2015 at 3:36 pm
    
    interesting!…the plot thickens
  - Gosman 13.1.2
    
    2 July 2015 at 5:00 pm
    
    Then they should sell much of their weaponry that they purchased.
    - Macro 13.1.2.1
      
      2 July 2015 at 9:11 pm
      
      You know as well as I that the purchase of new weaponry was a condition of the 2010 bail out. Although flatly denied by Angela Merkel, et al. the juxtaposition of the bail out and the confirmation of the purchases was too coincidental to be anything other than some sort of “deal”.
      And as a retired Naval Officer, I wholeheartedly agree that they should be sold off. No point in having guns if the country has no butter. On the other hand – the sale would probably be at knockdown prices – equipment has to be compatible – and that can only mean NATO, and other NATO countries probably have enough already.
- Marie Tern 13.2
  
  2 July 2015 at 8:37 pm
  
  Here you go:
  http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go
Draco T Bastard 14

2 July 2015 at 2:32 pm

Greece needs a real rescue package of debt relief.

Nope. Greece needs to drop out of the Euro, default on all of its external debts and go back to the Drachma. That is it’s only possibility of returning prosperity to itself and its people.
- SPC 14.1
  
  2 July 2015 at 3:11 pm
  
  And then consult Iceland and the 2 IMF economists who proposed a new form of banking finance post GFC.
- Gosman 14.2
  
  2 July 2015 at 3:14 pm
  
  Quite possibly accurate. However Syriza is lying to the Greek people when they claim they can reject the terms of the bailout AND stay in the Euro. Do you think they should be more truthful?
  - Draco T Bastard 14.2.1
    
    2 July 2015 at 3:33 pm
    
    What makes you think that they’re not being truthful? It’s possible that they could renegotiate to stay in the Euro but it should be obvious by now to both Syriza and the Greek people that the Troika won’t renegotiate. The Troika obviously want someone to punish and Greece is it because it sure as hell won’t be the people who actually caused the problems.
    - Chooky 14.2.1.1
      
      2 July 2015 at 3:35 pm
      
      +100 DTB…probably preferable to be kicked out of the EU than walk
    - Gosman 14.2.1.2
      
      2 July 2015 at 4:03 pm
      
      Where did all the money go that the Greeks borrowed pre them requiring assistance go Draco?
      - Draco T Bastard 14.2.1.2.1
        
        2 July 2015 at 4:09 pm
        
        Who cares? But indications are that it went to the rich via massive subsidies. That’s the thing about corruption: Those who participate in it and/or benefit from it are rich and hence the Greek government now looking to that debt in order to declare it odious and illegal.
        
        Gosman 14.2.1.2.1.1
        
        2 July 2015 at 4:16 pm
        
        Massive subsidies for what?
        
        If there is one thing that I believe we can both agree on Draco is any person who has benefitted unduly as a result of State support which has lead to economic problems of the magnitude of Greece should be forced to pay back the money they received plus penalties on top. That is what the Syriza government should be pursuing with a vengeance.
        
        Draco T Bastard …
        
        2 July 2015 at 4:56 pm
        
        Massive subsidies for what?
        
        Can’t find it now but I read an article a few years back about Greece’s spending on roads and how it was, effectively, a massive subsidy to the road construction firms which, in context, meant a huge subsidy to the rich.
        
        Gosman …
        
        2 July 2015 at 5:05 pm
        
        Then Syriza should recoup the money from the Greek construction company. Instead they want to stiff German taxpayers.
        
        Draco T Bastard …
        
        3 July 2015 at 12:53 pm
        
        I found The forgotten origins of Greece’s crisis will make you think twice about who’s to blame more interesting:
        
        In short, many in the north pushed for a financial regime that didn’t fit the Greek economy, because they personally stood to benefit. Many rightly blame the Greeks for its current crisis, but some of the blame belongs farther north as well, he argues.
        
        Matthijs compares the situation to the U.S. subprime crisis. Who was really at fault for the housing crisis in the U.S.: The subprime borrowers who bought houses they couldn’t afford, or the predatory lenders who encouraged them to take them out?
        
        “The Germans don’t like that comparison. But they were greedy. They wanted the higher yielding bonds there, they wanted to invest there,” he says of southern Europe.
        
        The German’s and other European lenders need to be taking the haircut that their risk taking demands which, amazingly enough, wasn’t the taxpayers.
        
        Molly …
        
        3 July 2015 at 12:46 pm
        
        There was also a good film on how the Olympics allowed private interests to take over public parks and amenities at an accelerated rate.
        
        Can’t remember the name of it, or where I saw it, but it was information about how the Olympics provided a free-for-all environment for those wanting to acquire publicly owned assets at a very reduced cost.
        
        Edit: Still not the same film, but vimeo has Future Suspended which seems to have the same topic.
        
        Gosman 14.2.1.2.1.2
        
        2 July 2015 at 4:33 pm
        
        Here is an interesting article about Greek spending prior to 2010
        
        http://www.reuters.com/article/2010/04/28/greece-waste-idUSLDE63R0QZ20100428
        
        Seems much of the waste is going to the average Greek citizen not the fat cats.
      - AmaKiwi 14.2.1.2.2
        
        2 July 2015 at 11:57 pm
        
        @ Gosman “Where did all the money go that the Greeks borrowed go?”
        
        Same place as all the money NZ borrowed. And Key’s tax cuts for the rich helped more of it to get to them faster.
  - SPC 14.2.2
    
    2 July 2015 at 3:42 pm
    
    Gosman, the thing is the Greek government was elected on a mandate and if the terms proposed by the EU are in breach of that mandate they have no choice but to put that to the Greek people – if democracy is to have any continued meaning.
    
    The EU is operating on the basis that nations are required to abide by the terms they are given, regardless of what the people of the nation state want – rendering governments as no more than the enforcers of the will of more economically powerful nations.
    - Gosman 14.2.2.1
      
      2 July 2015 at 4:01 pm
      
      The mandate is unworkable given they also stated they weren’t leaving the Euro either. The two are seemingly incompatible. Therefore they have to break one of their key pledges or resign from government. I’ve stated this before but I will do so again. The Greek people cannot vote for other nations to give them debt relief because that involves voters in other nations having to pay for them. It would be like New Zealanders wanting Australia to increase aid to New Zealand. We may vote for it but we have no right to expect the Australians to respect our ‘democratic’ decision.
      - Draco T Bastard 14.2.2.1.1
        
        2 July 2015 at 4:25 pm
        
        The Greek people cannot vote for other nations to give them debt relief because that involves voters in other nations having to pay for them.
        
        Maybe not but they can simply default on the debt. As I say:
        
        When you loan someone money you’re taking the risk that you’re not going to get it back.
        
        The capitalists may not like that idea but they’re the ones that keep going on about risk taking and then not accepting the inevitable outcomes of taking that risk.
        
        Gosman 14.2.2.1.1.1
        
        2 July 2015 at 4:31 pm
        
        That is quite true. However in the case of Greece they want to default on the debt AND still get more funds from the same sources they are defaulting on. Why would the people who they are defaulting on (i.e. mainly other European nations) agree to give them more money on top of the funds they are refusing to pay back?
        
        Draco T Bastard …
        
        2 July 2015 at 5:03 pm
        
        Perhaps in the hope that they might get some of their money back rather than none at all.
        
        Gosman …
        
        2 July 2015 at 5:07 pm
        
        Similar mindset to a gambler on a losing streak.
        
        McFlock 14.2.2.1.1.2
        
        2 July 2015 at 4:32 pm
        
        When you loan someone money you’re taking the risk that you’re not going to get it back.
        
        Indeed, if the risk wasn’t there then there’d be no justification to charge interest beyond a nominal fee to cover overheads.
        
        johnm 14.2.2.1.1.3
        
        2 July 2015 at 5:27 pm
        
        Hi DTB
        
        1 million percent correct 🙂 But RWNJ trolls will never understand this truth in a million years. You cannot and will not destroy a society for debt! So simple: debts that cannot be repaid will not repeat not be repaid. Take a f*cking haircut troika.
        
        attn gosman
        
        Gosman …
        
        2 July 2015 at 5:38 pm
        
        The Greeks can do this if they so chose. They just can’t stay in the Eurozone nor access additional loans very easily if they do.
    - johnm 14.2.2.2
      
      2 July 2015 at 5:31 pm
      
      spc
      100 per cent right democracy against financial rape
- JonL 14.3
  
  2 July 2015 at 3:15 pm
  
  Too true.
  Interesting blog on financial black holes here: – http://cluborlov.blogspot.ca/2015/06/the-care-and-feeding-of-financial-black.html#more
- Chooky 14.4
  
  2 July 2015 at 3:34 pm
  
  agree DTB…probably the best hope for the future for the Greek people
half crown 15

2 July 2015 at 3:50 pm

Gosman. As you are such an expert on Greece’s financial problems, perhaps you could go and give advice to Hamilton City right wing council who have just past a motion to increase the city’s debt by a debt to revenue ratio of 200%. Real Greek stuff this, All I can advise the ratepayers of Hamilton to do is learn Greek, like fast.
The ones who voted for this are the same right wing shower who campaigned on reducing the city debt after the V8 and other financial fiasco’s.

“Councillor Andrew King said Hardaker and other councillors contested the 2013 local government election promising to cap city debt at $440m.
“Now 18 months later we’re about to vote to increase city debt by $100m above today’s debt level,” King said.
“This gung ho political attitude of borrowing large sums of money has created huge problems in the past and I suspect it will do the same again in the future.”
King said of those who submitted on debt levels during public consultation on the draft long-term plan, two-thirds opposed the city taking on more debt.
Councillor Garry Mallett said previous council rate increases had outstripped the city’s economic growth.
Chesterman said the $440m debt cap was an expression of the council’s debt-to-revenue ratio of 200 per cent.”

http://www.stuff.co.nz/waikato-times/news/69838773/hamilton-city-council-adopts-longterm-plan-following-fiery-debate
- Gosman 15.1
  
  2 July 2015 at 4:05 pm
  
  Yes and Hamilton will have a day of reckoning just as Greece is now facing. Unless you think Hamilton should just repudiated all debt as well. Is that a viable solution to you?
  - johnm 15.1.1
    
    2 July 2015 at 5:54 pm
    
    Hi Gos 🙂
    
    When Greece tells the troika to f@ck off. The EU and its neoliberal shit pile of debt domination will have its day of reckoning. Democracy not money grubbing sh$tbags will win out. Russia and the Brics stand to help Greece not pillage and rape her.
  - sabine 15.1.2
    
    2 July 2015 at 7:22 pm
    
    so when Hamilton has its day of reckoning, will it still be part of NZ or will there be a State of Hamilton.
    
    And Hamilton is jus one city of NZ. What do you suggest the dear citizens of NZ do to prevent their councils and government from taking up this debt?
    
    Write letters? Demonstrate? Stop paying taxes and rates?
  - AmaKiwi 15.1.3
    
    3 July 2015 at 12:02 am
    
    @ Gosman
    
    “Yes and Hamilton will have a day of reckoning just as Greece is now facing.”
    
    Which is why I am not stupid enough to lend to them. After tax I get about 1% interest per year, but not being greedy helps me to sleep.
half crown 16

2 July 2015 at 4:32 pm

“Hamilton should just repudiated all debt as well. Is that a viable solution to you?”

NO, but they should not be adding more to it.
As rightwingers who we are always being told “are the only ones with financial prudence” , why did they get into such shit with

a Rugby Stadium.
b V8 fiasco after being told by many “don’t go down that path”
c. Advents centre which is losing 10 mil a year

and now want to add further debt on top.

Old saying which is true They could not organise a piss up in a brewery.

I am getting off topic here but I agree Hamilton has a day of reckoning and my friends who live there are only too aware and are frustrated that they are being piled with further debt by the incompetent right wing council. Just like the debt the Olympics, Goldman Sachs and the incompetent right wing government piled on Greece
- Gosman 16.1
  
  2 July 2015 at 4:54 pm
  
  I suspect you don’t disagree with the philosophy of the so called right wing controlled Hamilton city council but merely it’s application. Whereas if they were actually right wing they shouldn’t be engaged in commercial activities at all or at least not increasing the funding for them.
  - half crown 16.1.1
    
    2 July 2015 at 5:17 pm
    
    I could not give a shit about the councils philosophy. I was pointing out that you have a very simplistic view like a lot of the right and that is right is good and responsible, left is bad sorry correct that TERRIBLE and totally irresponsible.
    You confirmed that later with your post at 18.01
Charles 17

2 July 2015 at 4:35 pm

“Hamilton will have a day of reckoning!”

Repent Hamiltronians your day in the sun has come to an end! No more luxuries like music played in the The Base car park for you. haha Totally just like Greece.
feijoa 18

2 July 2015 at 4:44 pm

So, Gosman are right wingers better economic managers?
- Gosman 18.1
  
  2 July 2015 at 4:56 pm
  
  Not if they pursue left wing fiscal policies. Then they tend to be just as bad (if not worse) as left wingers. The lesson is don’t implement left wing fiscal policies.
  - adam 18.1.1
    
    2 July 2015 at 10:35 pm
    
    I agree Gosman, third way economics is pathetic. Liberalism economics is a joke. Capitalism is a epic failure on so many levels.
    
    Lets try another way, because obviously it’s peoples lives we’re dealing with here. And the current economic environment is not working for anyone.
Gosman 19

2 July 2015 at 4:49 pm

As for Austerity that the Greeks have supposedly been following here is an article from 2012 (two and a half years after the supposed ‘evil’ Troika imposed Austerity on the Greek government).

http://www.cato.org/blog/looking-austerity-greece

From that article it can be seen that Government spending is still increasing at a much higher rate than revenue since 2000 despite coming back from the very high level in 2009.

The article also points out that the Greeks attempted to resolve the fiscal gap via Tax increases mainly (the same policy proposed by Syriza). Raising Taxes has caused much of the economic problems they have suffered.
- Stuart Munro 19.1
  
  2 July 2015 at 5:29 pm
  
  So kind of the opposite of NZ – our looming default springs from Bill English’s disastrous and indefensible tax cuts, which he has used as an excuse to promulgate austerity throughout the economy, which in term has munted the fractional growth that might have occurred were it not all being sucked into the black hole which is the Auckland property bubble.
  - Gosman 19.1.1
    
    2 July 2015 at 5:36 pm
    
    How has government spending been cut over the past 7 years in NZ? Do you have figures for pre 2008 versus now?
    - Stuart Munro 19.1.1.1
      
      2 July 2015 at 10:00 pm
      
      Nice distractor – frankly who cares? That $100 billion didn’t come from nowhere Gosman. Bill spent it like a drunken sailor – on tax cuts that failed to produce the growth he pretended to believe they would.
      
      We look at real world phenomena – service levels – they suck now as never before. Cost of living – through the roof. Suicide rate – twice the road toll and rising steeply… this is what you and your fellow fascist scum have brought to us.
      
      The whole of my grandparents generation went to war to stop this crap getting here, but you Gnats can’t sell us out fast enough. https://www.youtube.com/watch?v=anz91PPMPw8
      - Gosman 19.1.1.1.1
        
        3 July 2015 at 9:31 am
        
        That 100 Billion Debt was largely predicted to occur even before National got in to power.
- SPC 19.2
  
  2 July 2015 at 6:07 pm
  
  Gosman, government spending increases in a recession because of the increased welfare costs consequent from job loss. Then there is the higher debt cost that occurs in times of financial crisis due to negative re-rating of credit.
- adam 19.3
  
  2 July 2015 at 10:47 pm
  
  Really Cato is your source – can you get anyone more ideologically blind? I mean even the Stalinist are not that far up their own back orifice, compared to that mob. Well may be they are.
  
  Anyway, that’s a truly depressing depressing similarly, as Stalinist, really are the bane of the left – with their Ideologically blindness, and death grip rigidity.
  
  Seriously, the Torygrapgh is bad, and the economist is wonky, but Cato – Bro, credibility fail with that link.
Marie Tern 20

2 July 2015 at 7:51 pm

Interesting article re Greece situation.
http://www.truth-out.org/news/item/26112-an-economic-hit-man-speaks-out-john-perkins-on-how-greece-has-fallen-victim-to-economic-hit-men
- Chooky 20.1
  
  2 July 2015 at 8:40 pm
  
  +100 Marie Tern…thanks for that link….So this is where the money went!
  
  …not to Greek citizens but to the money men
  
  …and many of them outside the country of Greece:
  
  “Essentially, my job was to identify countries that had resources that our corporations want, and that could be things like oil – or it could be markets – it could be transportation systems. There’re so many different things. Once we identified these countries, we arranged huge loans to them, but the money would never actually go to the countries; instead it would go to our own corporations to build infrastructure projects in those countries, things like power plants and highways that benefitted a few wealthy people as well as our own corporations, but not the majority of people who couldn’t afford to buy into these things, and yet they were left holding a huge debt, very much like what Greece has today, a phenomenal debt….
Marie Tern 21

2 July 2015 at 8:23 pm

Greece is being punished for daring to elect a left-wing government.

”The EU, which is made up of 28 democratic and sovereign nations, is being run like some absolute kingdom, ostensibly led by a 24/7 drunk. How long do you think that can last?”

http://www.theautomaticearth.com/2015/06/europes-controlled-demolition/
Nick 22

2 July 2015 at 9:17 pm

http://www.truthdig.com/avbooth/item/video_michael_hudson_and_bill_black_with_greece_the_west_is_20150701
- Marie Tern 22.1
  
  2 July 2015 at 10:01 pm
  
  Excellent article.
  Kia kaha Greece! Stay strong!
- Chooky 22.2
  
  2 July 2015 at 10:37 pm
  
  Nick +100…great article
  
  ‘VIDEO: Michael Hudson and Bill Black: A Greek Bailout Is Really a Bailout of Western Banks’
  
  “U.S. political economists Michael Hudson and Bill Black tell The Real News Network that Western financial institutions are keen to bail out Greece because if they don’t, the country’s existing creditors—other Western financial institutions—will fail to recover money they previously lent to Greece.
  
  The experts say the ongoing bailout scheme has turned Greece into a transfer site for international wealth, while stripping the country of its publicly owned assets and driving it into a hole of poverty and debt that is inescapable under the European Union’s current policies.
  
  Black, who teaches economics and law at the University of Missouri-Kansas City and served as executive director of the Institute for Fraud Prevention from 2005-2007, put it this way…
Marie Tern 23

2 July 2015 at 11:18 pm

Varoufakis, Greek Finance minister. Watch, compare to Blinglish and weep.

http://www.bloomberg.com/news/videos/2015-07-02/varoufakis-says-he-will-quit-if-greeks-vote-yes-
OMBE 24

3 July 2015 at 8:55 am

If ever there was a good example about how different parts of the political spectrum think, the Greek situation provides a perfect one. On KB there is good rational debate about what Greece did to themselves and how poorly it has been run for decades – eg runnign a rail system that pays everyone $100K pa, collects $80m in ticket sales and pays $500K+ in wages. On the Standard it is the nasty Germans and International Banks (and ultimatley John Key) who are the culprits and casuing hardship to the poor Greek people. From teh left – It appears that when money or economics are concerned it is always someone else responsibility and/or fault for the mess. From the right – you have to deal with the consequences of the fallout from dumb decisions.
Jenny Kirk 25

3 July 2015 at 9:06 am

No OMBE its not as simple as that. Maybe if you read Bryan Gould’s comments, you’ll get a better understanding of what’s going on.

http://www.bryangould.com/the-real-greek-crisis/

The Real Greek Crisis by Bryan Gould

Most people will feel that they don’t need to look far for an explanation as to what lies behind the Greek crisis. Lazy reporting and racial stereotyping will persuade them that the Greeks – a feckless lot, no doubt – have spent more than they should, got into debt, taken out loans from the hard-working Germans and now won’t repay the loans because they refuse to tighten their belts.
But there is another narrative that tells a somewhat different story. That story is one of a powerful economy enforcing its will on its weaker neighbours and refusing to acknowledge that it has thereby made it impossible for them to dig themselves out of a hole. ……………………………………………..
- Gosman 25.1
  
  3 July 2015 at 9:42 am
  
  What a pathetic analysis by a frankly pathetic academic (if his efforts on the Labour party review of the last election is anything to go by). He never examined why the Greeks couldn’t compete or why they didn’t even look to compete with the Germans. They had plenty of opportunity to use the plentiful cheap credit available pre 2007 to boost productivity. Instead the frittered it away.
reason 26

3 July 2015 at 2:06 pm

Maybe the greeks needed some of John Key and Nat style governing to save them…..

The greeks have missed out out on brilliant things like:

Building a cycle way
Doing a rugby world cup
An Auckland property bubble

But what they really really need is a Christchurch earthquake, more cows and a casino ………

Only a national style government can save them …..
The lost sheep 27

3 July 2015 at 3:07 pm

Robert Fisk in The Independent

” Alexis Tsipras is – and here I quote an economist friend – the spoiled boy who long ago managed to get on television with his interviews supporting students, his “face sweet, he was angry and aggressive”, his career spent in the internal politics of the left, zero experience of the real world.

Yanis Varoufakis (this from a less economic and far more political Greek friend) is the ever-smiling economy minister, a “narcissistic idiot”, a far-too-fond-of-his-own-voice show-off student-academic – that’s why Madame of the IMF wearingly insisted on talking to “adults” in her best civil service voice a few days ago – who thinks he can play with the big boys and girls in Brussels without realising that they don’t care about his performance.”

………

” But who is to blame?

“Our populist past,” my banker friend announced firmly. “It started with the military dictatorship, the constant pampering of our lower feelings – that we can do no wrong. The idea that we are the chosen people. This is what destroyed our public finances. It was a very bad idea to join the euro – we thought: ‘Finally, we have received our destiny, we have joined the West.’ But our economy was unsuited to this.”

Oh yes, indeed. And corruption, I added (his banker’s face beamed). “All those centuries of admiring classical Greece,” he said. “Byron has a lot to answer for.”

http://www.independent.co.uk/voices/greece-debt-crisis-what-happened-to-democracy-when-its-a-case-of-vote-yes-or-else-10362374.html
Chooky 28

3 July 2015 at 3:25 pm

The plot thickens…

‘UK spied on Merkel’s Greek bailout plans and told NSA’ – WikiLeaks

http://rt.com/uk/271228-uk-spied-merkel-bailout/

“British intelligence agencies spied on German Chancellor Angela Merkel and other leaders as they discussed Greek bailout plans for European banks in 2011, WikiLeaks revelations suggest.

Phone calls from top German ministers, public officials and even Merkel’s personal assistant were intercepted by the UK and shared with the US National Security Agency (NSA).

WikiLeaks claims the leaked cables reveal Merkel’s personal skepticism about solutions to Greece’s financial crisis and Berlin’s support for a special IMF bailout for banks funded by the BRICS countries (Brazil, Russia, India, China and South Africa)….
johnm 29

5 July 2015 at 10:11 am

Capitalism Has Become Socially Dysfunctional

Paul Craig Roberts

If you have not read John Perkins’ book, Confessions Of An Economic Hit Man, you should. The book is easy to read and explains clearly from the inside how US corporations deceive foreign governments into debts that they cannot service or repay and then use the IMF and World Bank as looting mechanisms and reduce the indebted countries to penury.

Capitalism has become a socially dysfunctional system focused on pillage and not on the growth of consumer income that sustains and grows markets for goods and services. Once the last prospect is looted, there is nothing left to sustain capitalism.

In this interview John Perkins describes the looting process in Greece. Tomorrow the Greek people face the same decision that the people in Iceland and Ireland faced. In Iceland the people rejected the debts and refused to pay them. Now Iceland is recovering. Somehow the feisty Irish were brainwashed into accepting austerity programs so that the looting of Ireland could continue, and Ireland continues to suffer. Sunday will tell us if Greeks have learned from the examples.

https://www.lewrockwell.com/2015/07/no_author/greece-has-fallen-victim/

http://www.paulcraigroberts.org/2015/07/04/capitalism-become-socially-dysfunctional/

“Greece is being ‘hit’, there’s no doubt about it,” exclaims John Perkins, author of Confessions of an Economic Hit Man, noting that “[Indebted countries] become servants to what I call the corporatocracy … today we have a global empire, and it’s not an American empire. It’s not a national empire… It’s a corporate empire, and the big corporations rule.”