Greece to reclaim its future?

Written By: - Date published: 8:16 am, January 27th, 2015 - 250 comments
Categories: capitalism, debt / deficit, International - Tags: , ,

Greece now has an anti-austerity government after “the radical leftist Syriza” achieved a majority (by reaching an agreement with a small right-wing party). The result is very much a rebellion against long-standing problems in the Greek economy and the austerity measures put in place after the “global financial crisis”. The Guardian:

Greece shows what can happen when the young revolt against corrupt elites

The rise of Syriza can’t just be explained by the crisis in the eurozone: a youthful generation of professionals has had enough of tax-evading oligarchs

The IMF predicted Greece would grow as the result of its aid package in 2010. Instead, the economy has shrunk by 25%. Wages are down by the same amount. Youth unemployment stands at 60% – and that is among those who are still in the country.

So the economic collapse – about which all Greeks, both right and leftwing, are bitter – is not just seen as a material collapse. It demonstrated complete myopia among the European policy elite. In all of drama and comedy there is no figure more laughable as a rich man who does not know what he is doing. For the past four years the troika – the European Commission, IMF and European Central Bank – has provided Greeks with just such a spectacle.

As for the Greek oligarchs, their misrule long predates the crisis. These are not only the famous shipping magnates, whose industry pays no tax, but the bosses of energy and construction groups and football clubs. As one eminent Greek economist told me last week: “These guys have avoided paying tax through the Metaxas dictatorship, the Nazi occupation, a civil war and a military junta.” They had no intention of paying taxes as the troika began demanding Greece balance the books after 2010, which is why the burden fell on those Greeks trapped in the PAYE system – a workforce of 3.5 million that fell during the crisis to just 2.5 million. …

It’s hard to argue with the reasoning of the Greek voters. They have been screwed by the austerity measures, they want their future back. The situation raises some interesting questions for Europe:

Greek elections: Syriza gives eurozone economic headache

Syriza’s election victory has renewed questions about the future of the eurozone and more precisely about whether Greece itself might leave – what has become known as Grexit.

In the short term, eurozone mechanisms will prevent Greece from defaulting on its debt. But we do not know in advance the upper limits of all these new tools of European monetary integration and its long-term impact on a default crisis.

The aim of the new government is to renegotiate some of the terms and conditions of the €240bn bailout agreed with the so-called troika (the European Commission, European Central Bank and International Monetary Fund) since 2010.

A haircut would be the preferred solution. …

No doubt Greece will be looking to the Iceland precedent. In the wake of the crisis Iceland defaulted on its debts. There was short term pain, but in the longer term it is working out well for them (e.g. here here here here).

If Greece follows suit, perhaps voters in other debt=laden countries will start asking questions too…

250 comments on “Greece to reclaim its future? ”

  1. nadis 1

    The big difference between Iceland and Greece though is that Iceland had its own currency. Without the ability to devalue (Syriza has unequivocally stated they will remain in the Euro, and why not when they are subsidizing you in the 10s of billions per annum), Greece cannot follow the Icelandic model.

    The Icelandic response was nothing more than a standard bank nationalisation, currency devaluation approach to a fiscal/balance of payments crisis which led to a period of high unemployment, high inflation but ultimately the devaluation led to the conditions for economic growth.. And they did add in some nice populist touches.

    We’ve had the same thing here in NZ in the past as well as in numerous other countries.

    Greece’s only option (based on announced Syriza policy) seem to be beg the EU for better terms on existing debt. Locked into an unsustainable currency, and without the ability to borrow Greece has no other options. Defaulting on debt would lead to what? A withdrawal of EU support, massive fiscal deficit and no ability to fund any domestic spending. And in return for being a good EU citizen they’ll probably get what they need – relief on EUR10 billion of debt repayments in the next 5 months, a face saving de-troika- ing, higher domestic taxes especially on the avoiders, subsidies for the very poor.

    I actually think Tsipras’ toughest job will be meeting the expectations of the bulk of his supporters. Very easy being a radical in opposition, but whenyou are in charge of a bankrupt country with no resources, reliant on external charity – well that’s a bit harder.

    • One Anonymous Bloke 1.1

      Getting the country’s wealthy to pay some tax might help.

      • Gosman 1.1.1

        They have been trying that for the past few years. I would agree it would help but it is unlikely to fund the sort of social spending Syriza wants. Also in terms of stimulating an economy simply taking money from one group of people and giving it to another is much less effective than borrowing or printing money.

        • One Anonymous Bloke

          The most valuable resource they have is eleven million people who all need to eat, be housed, entertained, and cared for in times of hardship, and in turn to farm, build, etc.

          In any event, Syriza can’t possibly do a worse job than the wealth destroyers.

          • Gosman

            I believe North Korea and Cuba have similar ideas. Subsistence economies don’t end to be terribly productive nor have high standards of living.

            • One Anonymous Bloke

              What? Is that feeble dreck the best you can manage? Denying the value of human resources while pretending that Cuba and North Korea are somehow interchangable.


              • Gosman

                Yep. Human resources only get you so far. Capital investment is what drives economic growth in the modern world. Greece can’t magic capital out of the air due to not controlling their currency. Hence the problems they face.

                • Colonial Rawshark

                  The key to understanding this is that the top tier EU countries (France, Germany) and their banks are staying afloat on the back of the bottom tier EU countries (Greece, Spain, Portugal).

                • vto

                  Nope. You identify but fail to recognise the problem in your own comment, namely economic growth. Not needed except to pay the interest on the printed money.

                  Continued growth is both unsustainable and unnecessary.

                  You highlight the flaw in the entire system gosman, thanks.

                  • Gosman

                    Good luck with pushing that idea in the wider population. Not even Syriza is foolish enough to try that approach. I also think you have a fundamental misunderstanding of what economic growth is about. I’ll give you a clue. It isn’t about consuming more and more resources.

                    • vto

                      Gotta fly but I would suggest that your answer there reflects the fundamental flaw your own approach. You are too wedded to the existing system and as such are unable to view it objectively, thereby missing its fatal flaws. Fatal flaws coming to fruition in front of our very eyes.

                      The world has more debt than it does money to repay it, for example. Bizarre. Head in the clouds stuff.. wake up fulla.

                    • Draco T Bastard

                      Yeah, actually it is.

                    • Gosman

                      What uses more resources – An old boombox stereo or an Ipod?

                    • Draco T Bastard

                      Ever noticed how growth is based around GDP and GDP is based upon sales? So that means that to grow GDP means more sales and more sales means more utilisation of scarce resources.

                      Basically, you can’t have GDP growth without a corresponding increase in resource use.

                      Sure, an old boombox used up more resources in its production than an iPod but a lot more people have iPods.

                    • Mike S

                      “It isn’t about consuming more and more resources.”

                      Really? Please explain how economic growth occurs then if not by increased consumption.

                • JonL

                  If they don’t drop the Euro and revert to the drachma, they will remain, basically, buggered!

            • sabine

              because their standard of living is high right now?

              Yes? 25% unemployment amongst the adults and 60 % unemployment amongs the young make for a high living standard…..yeah right, TUI.

              go home Gosman, look in the mirror and find your soul, your brain, your heart and your guts. You are lacking all of these vital organs.

      • Grantoc 1.1.2

        Getting anyone in Greece to pay tax would help even more.

        Thats the starting point.

        Dropping plans to re introduce one of the world’s most generous state funded superannuation plans, would help too.

        • One Anonymous Bloke

          Help whom?

          Is the Greek proposal similarly generous as (for example) Germany’s? Perhaps you can cite the other countries you’re using to make the comparison. I expect the sky has fallen in at least some of them, with their unaffordable schemes 🙄

          • English Breakfast

            The current arrangement is that Greek citizens are eligible to a pension at 61, the Germans at 67. My understanding is that Greece’s social security arrangements have been unsustainable for years, as has been the tardiness of their tax paying habits, particularly amongst the rich.

    • nadis 1.2

      Another difference between Iceland and Greece is the level of national indebtedness. Iceland was mostly bank debt, Greece is mostly sovereign debt. Sov debt is harder to default on and remain a connected member of the international community.

      Note lso that the Icelandic crisis pushed Iceland closer to Europe with a formal EU application in addition to existing membership of EEA and NATO. On hold now while they wait for a referendum but it is supported by the largest left and right parties.

      • lprent 1.2.1

        The problem is that your prescription and that of the euro members to date has been to destroy the economy and all hope of any recovery.

        So rather than being a simple critic, why don’t you start pointing towards a viable way out. God knows even a fool could have been doing a better job than the financial troika have been doing in the last 7 years.

        • Gosman

          The Greeks have been very reluctant to implement the sort of policies you would regard as austerity. Additionally policies that should help them get through the crisis with less cuts such as privatisation of their (largely) loss making parastatals has pretty much stalled.

          They should have taken a leaf out of how the Baltic nations addressed the challenges of the GFC. A short sharp contraction followed by a sustained fiscally sound expansion.

        • nadis

          I thought I had been quite clear – Greece should leave the Euro, devalue, default, collect taxes properly and start living within its means. Do you need more clarification?

          • Draco T Bastard

            Always amused when the political right talk about “living within means” as they always deny that or means are limited. Point out peak oil and climate change and how that limits or means and they claim that there’s no such limits.

            • nadis

              i don’t think you are talking to me because I don’t think I have ever claimed those things that you seem to be attributing to me. Feel free to back up with a link or withdraw the claim.

              What i did say or imply was Greece has to live within the following equation:

              Government spending – Government revenue <= borrowing capacity

              The means applying to Greece are quite clearly and obviously limited.

              • Draco T Bastard

                i don’t think you are talking to me

                No, it was just a general observation. The right-wing always demand that we live within our means but that means is always centred around money and not actual resources.

                Government spending – Government revenue <= borrowing capacity

                The means applying to Greece are quite clearly and obviously limited.

                But what are their actual physical resources?

                See, I agree with you that Greece staying in the EU will actually prevent them from utilising their economy. This could easily be corrected if they looked at what resources they have available and created the money they need to get those resources moving.

                Defaulting on the debt would also help. In fact, I think it may be critical but that’s just a feeling.

                • The right-wing always demand that we live within our means but that means is always centred around money and not actual resources.


                  Though it’s not just people who lean toward the right side of the political spectrum.

                  This is the specific reason I had so much trouble doing econ 101 way back when.
                  Coming from an academic family, and having done no econ papers at school, I had formed my own assumption that economies must fundamentally run on sunlight (whether that be solar power, or stored as potential energy in oil or water falling etc), material resources and people activity (not just their paid labour).

                  What was taught at uni was more akin to how monetary constraints affect human behaviour with regard to consumption choices and production.

                  • greywarshark

                    But the consumer economy is a major business sector now. With fewer jobs and the mass of people getting wage rises below real inflation and even headline inflation, it is necessary for people to keep using their credit to keep the country buoyant. So RWers are lying through their teeth, which are false.

                    I have just been checking up on CPI to fill in the gaps in my info and pass on some info for others.
                    Our common inflation tool is called the CPI Consumer Price Index.
                    Consumers Price Index
                    This quarterly release provides information on the price change of goods and services purchased by private New Zealand households.
                    (The rate of change between the CPI price level today and the CPI price level one year ago is commonly referred to as the inflation rate, or sometimes “headline CPI inflation”. )

                    dept of Stats.NZ:
                    Price indexes measure the change in price for a fixed ‘basket’ of goods and services between two time periods. This change is often called inflation.
                    We collect prices for a wide variety of goods and services that we use…
                    There is also –
                    Food Price Index

                    What is the consumers price index?
                    The consumers price index (CPI), New Zealand’s best known measure of inflation, measures the rate of price change of goods and services purchased by households.
                    The CPI consists of a basket of goods and services that represent purchases made by households. The goods and services in the basket, and their relative importance, are reviewed every three years to ensure the basket remains up to date.

                    There are about 690 goods and services included in the basket. They are classified into 11 groups:
                    alcoholic beverages and tobacco
                    clothing and footwear
                    housing and household utilities
                    household contents and services
                    recreation and culture
                    miscellaneous goods and services.
                    These groups are then broken down further into 45 subgroups and then into 107 classes. The CPI is reported each quarter down to the class level.

                    The available price deflators are:
                    General – uses the ‘all groups’ Consumers Price Index (CPI), published by Statistics New Zealand. Estimates for the years between 1862 and 1914 have been included but should not be regarded as being official, or of the same quality as the published CPI.
                    Food – Food Price Group from the CPI, Statistics New Zealand.
                    Clothing – Clothing and Footwear Group from the CPI, Statistics New Zealand.
                    Housing – House Price Index, PropertyIQ.
                    Wages – Hourly wage in dollars (private sector, ordinary time) from Quarterly Employment Survey, Statistics New Zealand.
                    Transport – Transport Group from the CPI, Statistics New Zealand.

                    Housing and renting –
                    (House prices aren’t in CPI but rent and building costs are.)

                    Headline inflation
                    A measurement of price iinflation that takes into account all types of inflation that an economy can experience. Unlike core inflation, headline inflation also counts changes in the price of food and energy. Because food and energy prices can rapidly increase while other types of inflation can remain low, headline inflation may not give an accurate picture of how an economy is behaving.
                    Headline inflation is more useful for the typical household because it reflects changes in the cost of living, while core inflation is used by central banks because core inflation is less volatile and shows the effects of supply and demand on GDP better.

      • Colonial Rawshark 1.2.2

        Greek has defaulted on sov debt several times in the last 200 years, no big deal as it will be a few years of pain either way.

        • nadis

          Yeah but the point is they cant default on sovereign debt AND remain in the Euro. Defaulting is a sensible option but first they need to leave the Euro, otherwise all default does is reduce Greece to even more of a beggar nation than it currently is.

          • Gosman

            Agree and that is why Syriza is not really a change from the politics prevalent in Greece over the past 30 odd years. They are still pretending the Greeks can have it both ways. They essentially lied to the Greek electorate to get elected. It will be interesting to see what happens to them when the reality inevitably sinks in.

            • Colonial Rawshark

              Agree and that is why Syriza is not really a change from the politics prevalent in Greece over the past 30 odd years

              Oh good please call the German FM and tell him he can relax, status quo holds.

              • Gosman

                How are the Greeks going to force the Germans to continue funding them if they want to stay within the Euro?

                • Draco T Bastard

                  The Greeks don’t need to be funded by the Germans. That’s pretty much true of all societies – they do not need foreign money.

                • Mike S

                  They don’t need to. The last thing the euro elite want is for it to be seen as possible to leave the EU. They will do almost anything to keep Greece in the EU and Syriza knows this.

              • Kiwiri - Raided of the Last Shark

                Any questions surrounding the possibility of Grexit in the near future (as compared with a few years ago) would have implications in a slightly different context. What’s different? The potential of Grexit at this time would hurt the German-led EU more than it would hurt Greece itself.

          • Kiwiri - Raided of the Last Shark

            first they need to leave the Euro

            what? they get forced out of the Euro by the greatest defaulter of the 20th century who is now in charge of the Euro??


            don’t think so!

    • lprent 1.3

      It is going to be a really interesting place to watch from afar over the next few years.

      Greece’s only option (based on announced Syriza policy) seem to be beg the EU for better terms on existing debt. Locked into an unsustainable currency, and without the ability to borrow…

      As far as I can tell, they badly need to get out of the euro and to readjust their economy (probably starting with the tax structures and losing some of their more wealthy citizens). Of course this will cause massive problems for the rest of the euro because it really points to the underlying fragility of the euro – the lack of political management due to the effective vetoes of doctrine bankers.

      And in return for being a good EU citizen they’ll probably get what they need – relief on EUR10 billion of debt repayments in the next 5 months, a face saving de-troika- ing, higher domestic taxes especially on the avoiders, subsidies for the very poor.

      None of which will get past the Germans except possibly the debt relief (and there will be political screaming about that). Their citizens and corporations have too much invested in Greece in its current tax status and to date they haven’t shown much forward thinking.

      • Gosman 1.3.1

        The Greek culture of tax invasion is not restricted to the super wealthy. It is prevalent through out the nation. Attacking a few super wealthy people won’t really cut it. They need to come down hard on the middle classes.

        • Tracey

          when were you last in greece gosman?

        • Tom Jackson

          Not really. The main problem in Greece is a sclerotic elite, and that has been a problem for years. It’s just a more acute version of what most of us have to deal with: a sclerotic class of people in charge of things who have outlived whatever use they had and need to be forcibly replaced.

          The solution to this is simple. If the Greeks don’t get much from the EU, they will have to leave it. But they really ought to wait and see if Podemos wins the Spanish election, at which point all bets are off.

    • r0b 1.4

      Thanks for the comments nadis – very interesting (you know a lot more about this stuff than me!).

  2. Gosman 2

    Where is Greece meant to get the money to fund all these spending promises? Certainly the German’s aren’t likely to roll over and cough up the billions of Euro’s they need. As nadis points out they can’t follow the Icelandic model. In fact Iceland is not even following that model which is more myth than reality.

    • vto 2.1

      Maybe they could set up a Ponzi scheme central banking system like the EU and just print money into circulation.

      Precedent for this is all over the whole planet.

      You would support replication of what is seen by those on the right as a successful system of money-creation, yes?

      • nadis 2.1.1

        Yes, very possible, but to do that they need to withdraw from the Euro which Syriza has already stated they wont do.

        Haven”t you been listening?

        Greece has, is and likely will decide to continue to exist on the charity of the Germans. Unless they decide to man up, leave the Euro and regain the tools to manage their own economy, all this talk of “Greece taking contro;”, “Greece showing the EU who is boss” etc is fantasy, a dangerous fantasy that will continue to punish the poor of Greece.

        Exit the Euro, devalue the currency by 50%, haircut Greek debt by 60%, and get on with being under-productive waiters for the rest of Europe – thats what Greece should do.

        For a country with the tradition and intellect of Greece, it’s a disgrace where they are now, but that’s what widespread corruption and decades of living beyond your means on the charity of others does for you. London, Frankfurt, Paris and New York are full of extremely smart, well educated able Greeks who have voted with their feet.

        • vto

          No what is a disgrace is the monetary system and the imposition of usury. The problem is bigger than Greece – the problem is worldwide and Greece is just the canary in the mine.

          Haven’t you been watching?

          • nadis

            Ok – but in the non-fantasy world that the rest of us live in what are you going to do that is within the power of Greece to execute?

            • Gosman

              Apparently Greece is the catalyst of some sort of world wide revolution that will sweep away the old regime and replace it with a brave new world. Or at least that is what I suspect many on the left are hoping.

            • Draco T Bastard

              That’s just it. The fantasy world is actually the one that’s been built up via capitalism, the one we have now. The fantasy is collapsing.

              • Gosman

                Because the Greeks can’t pay their debts? As someone has pointed out here (a lefty too so not from the right) the Greeks have defaulted on their debts numerous times before. This is nothing new.

                • Draco T Bastard

                  And that fails to address anything I said and so I can only assume that you’re trying trying hard to distract from what I did say.

                  • Gosman

                    You claimed the fantasy world is collapsing. I pointed out that if the Greeks defaulting was evidence of this then it must have been collapsing for a long time. During this time an incredible amount of economic development has taken place.

                    • It’s been about to collapse and just needing a bit of a push since the 1840s, which is not as impressive as the length of time Jesus has been about to come back, but still quite an impressive performance from a collapsing structure.

                    • Draco T Bastard

                      You claimed the fantasy world is collapsing.

                      And it is but I didn’t point out how long it had been collapsing. I figure it’s more in it’s beginning of the beginning of the end and not at the end. Basically, more and more people are waking up to the Ponzi Scheme that is modern banking and capitalism in general.

        • johnm

          Hi nadis

          ” Exit the Euro, devalue the currency by 50%, haircut Greek debt by 60%, and get on with being under-productive waiters for the rest of Europe – thats what Greece should do. ”
          100% right. It’ll be a wrench I hope they can do it. Also nationalise everything that’s been privatised, they have nothing to lose except their financial slavery.

          • Gosman

            As well as billions more Euros or whatever currency they end up using.

            • The Murphey

              Q. How is billions of printed Euros any different from billions of printed drachma ?

              • nadis

                The Greeks control drachma and can therefore run an integrated fiscal and monetary policy, rather than a Greek fiscal policy and be hostage to a German/Dutch/French monetary policy.

                It is why the Euro with its current members is inherently unstable. The monetary policy settings can never suit the entire zone.

    • One Anonymous Bloke 2.2

      How about the people currently paying no tax pay some tax? Thirty billion euros per annum is a tidy sum.

      • nadis 2.2.1

        Absolutely. They need to address a national culture of corruption which is why tax collection – the most fundamental government power – doesn’t properly exist in Greece.

        • adam

          Actually, it is the tax avoidance which makes me respect the Greeks. Why pay taxes to a corrupt government, doing deals with corrupt banks, for the interests of the very rich? Why hold together a system which punishes the poor, so a few get very wealthy? There is a point where it becomes your duty to stand up against corruption, rather than just moan about it.

          • Gosman

            Except that any government in Greece regardless if it is corrupt or not has to make up the shortfall in revenue by borrowing to fund their social spending such as pensions and the like. This is why they are in the mess that they are in. If you think the Greeks are suddenly going to start paying their taxes now that a government is supposedly not in thrall to the elite I suggest you are sadly mistaken.

  3. saveNZ 3

    It’s not just Greece rebelling, Spain has a rise in left wing support… and they are not using immigration as their catalyst but more accountability to political elite….extract

    Podemos is founded on the politics of hope: its English translation is “we can”. It was founded only this year but won 1.2m votes and five seats in May’s European elections. And now it has topped opinion polls, eclipsing the governing rightwing People’s party and the ostensibly centre-left PSOE – the Spanish Socialist Workers’ party. There are few precedents for such an explosive political ascent in modern western Europe; in Spain, a discredited political elite appears to be tottering.

    Not that Podemos simply materialised out of nowhere. In the buildup to Spain’s 2011 general election, hundreds of thousands of indignados took to the streets in protest at the political elite. Yet without political leadership and direction, such movements – although they can mobilise the disengaged – invariably fizzle out. As Iñigo Errejón, the Podemos election supremo, has written, before May’s European elections, “social mobilisation had been in retreat. Among large sections of the left the most pessimistic assumptions prevailed.” But Podemos was the child of the indignados movement, a party that emphasises bottom-up democratic participation: where the indignados had neighbourhood assemblies, Podemos has “circles” that take similar forms. There are even circles among Britain’s Spanish diaspora in London and Manchester. The funding for its European campaign was largely crowdsourced, and its policies and priorities are decided partly through online voting.

    Viva Podemos: the left shows it can adapt and thrive in a crisis
    The explosive ascent of Podemos in Spain proves there is nothing inevitable about Ukip-style anti-immigrant politics

    • and it’s not just ‘also spain’..

      ..portugal has a similar party rising up.. has ireland..

      ..and scotland is about to throw both the tories and labour out of scotland..and has replaced them with the scottish nationalist party..

      ..there is some ‘revolution’ at the the air..

  4. Colonial Rawshark 4

    New Greek PM visits site where 200 Greeks were massacred by Germans in WWII

    Seems like Tsipras has a keen sense of history.

    • nadis 4.1

      He’s a smart guy, and will need to be to balance domestic expectations with foreign reality.

      • vto 4.1.1

        You mean domestic reality with foreign expectation

        • nadis

          If Greece wants continued support from the EU, the IMF, the EBRD then unfortunately it is the foreign reality.

          • Pascals bookie

            Nothing is fixed in stone.

            If Greece goes, a precedent is set. Spain and Italy could go too.

            Germany benefited greatly from having a periphery built in to the EU. Till it went pear shaped, not least due to Germany’s own short-termism. If your success is built in part on the debts you hold from crack addicts, it’s a problem you aren’t blameless in.

            • Tracey

              if they go and default on debt, and italy and spain do too, wont germany suffer terribly as a result both economically and politically? germany may have to let greece stay in eu and forgive some debt and lower interest to save itself?

              • Jones

                It may result in the end of the Euro. Apparently Germany has been reprinting and stockpiling deutsche marks since 2011 in case an exit from the Euro is required. The Netherlands has been doing the same with the guilder.

                • Tracey

                  So, germany has quite the vested interest (no pun intended) in Greece staying in the EU and repaying its debt.

                  • Jones

                    Absolutely… Deutschebank’s colossal US$75 trillion exposure to derivatives needs to be mitigated somehow.


                    The pending printing of Euro by the ECB will barely scratch the surface.

                    • Gosman

                      You are using the Notional value of the contracts in question. This may or may not be a problem but is usually not as big an issue as a simplistic reading such as yours makes out. It is the overall exposure which is important rather than the total notional value of all contracts.

                      For example A bank might have an call option for a particular underlying financial product but also a put option for the same product. Theoretically they should zero out the position if they are for the same quantity. This explains why the finance economy is many times larger than the ‘real’ economy.

                      Another way of looking at it is the matter of reinsurance. An insurance company creates an insurance contract which has a notional value but the cost of such a contract to a customer is not the full amount of the contract but whatever risk premium has been decided upon. The insurance company can then onsell this risk to another party by creating another contract. That party in turn can decide to do the same. In this way the insurance market can have a reinsurance market many times the notional value of the original sum insured. Doing this is a vital method of risk mitigation.

                    • Colonial Rawshark

                      It’s just a casino. Most of the time its not anyone with any interest in the underlying taking out the “insurance”, rather various financial entities making speculative bets.

                      Of course the theory is that most of it nets off to zero…until there is a liquidity crunch and counter party risks zoom up. Then its GFC 2.

                    • gsays

                      to jones @12.59 pm

                      i have got access to a photo copier if they need a hand.

                      bill hicks: “.. its going to f#@k up the economy,
                      the economy thats fake anyway.
                      which would be a real bummer”

            • linda

              German benefited by having Greece in the Euro along with the other pigs it kept the value of the Euro down and retained Germany comparativeness if German had the mark at this point in time Germans exports would collapse because of the value of the currency

          • vto

            Ponzi scheme banking systems being described as reality is an interesting definition

          • IMESS

            It’s balancing the domestic reality with the foreign reality that’s their problem.

    • Gosman 4.2

      Their plan seems to be to try and guilt trip the Germans to forgive debt and pay compensation for the atrocities committed by the Nazis. Not very sophisticated and unlikely to work I think.

      • Colonial Rawshark 4.2.1

        Also to remind the Germans of the deal which enabled them to grow at the end of WWII: 60% write off of debt, moratorium on all interest and debt repayments.

      • Tracey 4.2.2

        if greece defaults… germany suffers. if greece italy default germany suffers. so it is not guilt tripping its a game of chicken.greece has nothing to lose but germany.

        • The Murphey

          Germany were a key driver of the eurozone formation and knew what the likely outcomes would be

          This is a situation of their own making

          • Tracey

            agree but gosman seems to think that Greece cant stay in the EU and default on its loans but germany, imo, has a huge amount to lose if Greece leaves EU and defaults. Better for germany to forgive debt and restructure interest than to have Greece default entirely.

            Greece has nothing left to lose that puts germany in the weaker position, imo.

    • joe90 4.3

      Seems like Tsipras has a keen sense of history.

      Alexis Tsipras is a clever man.

      Back in 1953, under the London Debt Agreement, America asked European countries, including Greece, to agree to write off 60 percent of Germany’s debts from World War II and to put a moratorium on debt repayments. That was accepted as a solution. What we are asking from Germany is basically the same.

      • Kiwiri - Raided of the Last Shark 4.3.1

        “Germans are world class debt defaulters and soccer players”

        Damien Kiberd in the (Irish) Independent on the Germans defaulting more than any other country in the 20th century:

        .. 132bn Goldmarks in reparations after World War I (but paid only 22.78bn Gm) … defaulted under Nazi rule in 1933

        .. Post World War II – 1953 London Debt Agreement: half of German national debt was simply written off at a stroke

        .. Some 85% of Marshall Aid given to Germany after WW II was ultimately treated as a grant, not a loan

        • Psycho Milt

          So, all the Greeks have to do is lose a world war, get saddled with ruinous reparations debts by the victors, then have the victors write off the debts when they finally have to accept that the country they just destroyed isn’t in any position to hand over wads of cash? it’s fine in theory, but I suspect the “lose a world war” part would be a hard sell to the voters…

          • Kiwiri - Raided of the Last Shark

            mmm depends on what kinds of wars are being fought and with what types of weapons?

            • Tracey

              they could say they were ground into submission by capitalism

              • Kiwiri - Raided of the Last Shark

                wars with financial weapons of mass destruction and prisoners of debt
                wars waged against the ‘have got’ and ‘have nots’ by the ‘have yachts’

          • Draco T Bastard

            Seems pretty simple really. Declare war upon the rest of the world, fire at a few people (ensuring they miss of course) wait until someone fires back and then surrender and tell the new victor that the debts are all theirs 😈

            Really though, what happened to Germany after WWII is proof of the non-existence of money and that defaulting on a debt can do wonders for an economy that’s been trashed.

  5. i wd like to repeat my theory that the sudden/surprising u-turn on q.e. by the eu.. in part to give them wriggle-room/funds.. be able to do a deal with greece..

    • nadis 5.1

      Don’t often agree with you, but I think there is some truth in what you say especially around timing. Europe was doing a QE anyway and thats been quite obvious since middle of last year because of deflationary pressures, but the timing of the announcement was pretty good and market response after the election has been very positive.

      Greek debt isn’t eligible for the QE purchases.

  6. Pascals bookie 6

    There’s another good piece here, by a voter explaining why he voted the way he did:

    “Gone were the story’s roots in Wall Street and the City of London. Gone was the collapse of subprime lending in the US. Gone was Iceland. Gone was the accusation that the very institutions we paid to bail out were speculating against the euro and fuelling volatility – an accusation articulated by the German chancellor Angela Merkel herself in 2010. Instead, the story mutated into one focused exclusively on lazy, feckless Greeks.

    Attempts to point out the patent absurdity of the idea that Greek train drivers retiring early in 2009 could be responsible for Lehman Brothers folding in the US a year earlier were dismissed as “Greeks not taking responsibility”. This anger, this feeling of being globally bullied, intensified when the troika of the European commission, International Monetary Fund and European Central Bank imposed their programme of austerity. Many of the measures were horizontal and caused most hurt to those who had least to do with the crisis. Not only that, but the loans secured in exchange mostly went to propping up the very banking institutions that were seen as responsible.”

    • saveNZ 6.1

      Very interesting.

    • Olwyn 6.2

      That is one brilliant article Pascal’s Bookie – just about every sentence, every paragraph, is quotable. I picked out just one short sentence, on the the subject of Tsipras’s campaign, for Andrew Little to take heed of, “To start from priorities and then define the method.”

    • Olwyn 6.3

      This is a good article as well, looking at what Syriza’s win means for the wider left, at this time:

    • Draco T Bastard 6.4

      In this context, to have a party like Syriza in power, neither indebted nor connected to the past, is the healthiest thing.

      And this also applies in NZ. We need change but we won’ get it from the old guard parties.

      • Tracey 6.4.1

        sadly we have to wait until we have the societal realisation of Greece, with nothing left to lose.

      • Kiwiri - Raided of the Last Shark 6.4.2

        One of the key successes of Syriza in bringing about change is that their leaders are (quite possibly) not bought or they have not sold their souls to corporate donors and banksters.
        Cf the old guard parties around the world with their leaders, MPs and candidates.

  7. Ovid 7

    In the wake of the crisis Iceland defaulted on its debts.

    Technically, Iceland didn’t default, it was bailed out by the European Central Bank and the IMF. By 2012, Iceland was in a position to start repaying the bailout loans. Further, its problems were mainly caused by a banking collapse, not by its central bank. Iceland also has its own currency, so it can adjust monetary policy as needed.

    Greece has already had a bailout and unlike Iceland, they are now looking to renegotiate the terms of the bailout. Greece’s problems are founded in a tax system that didn’t meet the country’s spending needs (the 2004 Olympics didn’t help, either) and high deficit spending that came with the cheap credit it enjoyed through being part of the eurozone. Its fiscal policy (ie taxation and spending) didn’t align with the monetary policy set by the European Central Bank. Once the GFC hit, it couldn’t borrow any more and here we are. A reversion to the economic policy that led to 2008 would be unwise. If I were Greek, I’d be looking to leave the eurozone so fiscal and monetary policy would be under the control of Athens, but there’d be a great deal of immediate pain in a devalued drachma. Their future borrowing would be tempered by interest rates that more fairly reflect the strength of the Greek economy, rather than Europe as a whole. It’s my understanding that the new Greek government has ruled this out, though.

    They’re in a difficult situation and there’s no easy way out.

    • Colonial Rawshark 7.1

      Giving up currency sovereignty, similar to us giving up the NZD and going with the Australian dollar, makes you a simple district of the overarching monetary authority. You have no ability to control your own monetary policy/interest rates.

      • Gosman 7.1.1

        Yep. Hence their lack of policy options beyond begging to be let off the harsher elements of their current arrangements with their creditor nations. They don’t want to leave the Eurozone so therefore have to ask nicely if they can get some more flexibility.

  8. Sanctuary 8

    The Greeks have basically decided it is better to die free Greeks than live as the shackled slaves of Berlin. It is the electoral equivalent of a slave revolt, with wild optimism born from utter despair. Perhaps the echo of the spirit of Sparta lives on in Greece.

    BTW – It is an interesting commentary on the modern western corporate media that Syriza is described by it as “far left” and the western media regard as “moderate” policies that have reduced the Greek economy by 25%, created massive unemployment, seen the emergence of malnutrition, well over doubled child poverty, and seen massive migration from Greece.

    • Gosman 8.1

      The Greeks have never followed ‘moderate’ policies in terms of sensible economic policies. They have always seen the need to utilise the power of the State to intervene and provide social services while avoiding paying for them directly.

      • Colonial Rawshark 8.1.1

        That’s overly simplistic. The truth is that the Greek 0.1% ruling class have led the nation to this disaster, and have pocketed money each step of the way at the expense of the ordinary citizen.

        • Gosman

          Largely by using the power of the state to do so. Also you ignore that many of the policies were designed to provide support for large sections of the society (at the middle and lower ends of the income demographic) many of whom were not very productive.

          • Colonial Rawshark

            Oh look, repeating the German PR line of the “lazy feckless Greeks.”

            Personally, I think the Greek elite have fucked their country and its time they pay up their share.

            • Gosman

              The problem is the Greek elite probably have much of their wealth hidden in tax havens such as Cyprus or further afield. Attempting to grab it would be largely futile. The only people who can be forced to cough up will be the middle and upper middle income earners in the country. These are the same people who haven’t generally been paying their taxes. Of course hitting them up has a raft of unintended consequences both politically and economically.

              • Pascals bookie

                They undoubtedly have many assets inside the EU though 😉

                • Gosman

                  And if the Greeks want help getting access to these assets a sure way of making life difficult for them is to default on their debt obligations.

        • greywarshark

          In other words the Greek rich have just behaved like every other human acting to their own advantage, a creed so beloved by neo libs. They held tightly to this ‘selfish-gene’ idea even in the face of financial meltdowns, overproduction, gold rush mentality. etc. The story of Midas is ancient, and based on human basics which learning just gets ignored when we are educating ourselves.

    • Daveinireland 8.2

      “The Greeks have basically decided it is better to die free Greeks than live as the shackled slaves of Berlin.”

      They have done no such thing. They have decided it’s better to be free Greeks while their slaves in Berlin keep picking up the tab.

      • Colonial Rawshark 8.2.1

        If your premise is true, how is it that the Greeks are living in utter poverty, social disarray and infrastructure collapse, while the “slaves in Berlin” have the highest income and employment levels in the entire EU?

        Or is it that you argue like a fuckwit.

        • nadis

          Well the counterfactual is that Greece is currently living like a poor south american country. Without their charity in Germany, Greece would be more like a poor african country.

          • Colonial Rawshark

            Charity is given through generosity and wishing the other party well.

            That’s not Germany’s attitude to the Greeks.

        • Tracey

          A number of Greeks left Athens and headed back tot heir villages when they lost their jobs. The homes in the family village have come down through generations and usually had no mortgage. The cities on the other hand are full of homes with big mortgages. The whole mortgage/Credit card thing is very new to Greece compared to the rest of the western world.

          A job in civil service was seen as a job for life and retirement at 55. Accordingly it was a goal to get family members into those jobs and at election times jobs were offered as a way to salve the palm of the voters. In any event in the private sector it is western BS to say they were all retiring at 65, they were not. And since the GFC no one retires at 55.

          In many ways Greece is a very good example of what happens when rampant capitalism (mortgages and cc from banks) mixes with human greed below. they advertised the loans and CCs as though they were free money, easy to repay, easy to get and suckered everyone in, as they do here… So the greeks borrowed and borrowed like children with no history of money management mixed with electoral greed.

          Banks got bailed out, learned nothing, and are back earning big bonuses and heading back toward GFC type times (particularly in the USA in the form of car loans etc). Greece is much more a victim of the banking system than the banks ever were.

          making money the centre of everything, the number one priority the number one goal (rather than further down the list) is a strategy for failure… for everyone except those in power (elected or financial).

          I hope Greece defaults and gives the two fingered salute to the system that crippled them. I hope they have the sense to restore integrity to their political system.

          • Daveinireland

            “So the greeks borrowed and borrowed like children with no history of money management mixed with electoral greed.”

            This isn’t new though is it? Greece has spent more time in default on sovereign debt than any other country. Anyone who thought that Greece joining the Euro would make them as credit worthy as Germans was seriously deluded.

            • Tracey

              it is relatively new because mortgages and CCs arrived into their communities much later than most western countries.

              “more time in default… than any other country”


            • Colonial Rawshark

              This isn’t new though is it? Greece has spent more time in default on sovereign debt than any other country. Anyone who thought that Greece joining the Euro would make them as credit worthy as Germans was seriously deluded.

              Why don’t you bitch to Deutsche Bank and Credit Agricole who seemed more than keen to lend to the Greeks, it is their judgement at the end of the day that you are criticising for lending to spendthrift Greeks.

        • Daveinireland

          Very simply because Greece is living with an income that is largely provided by others. Without that cash, Greece would be about as wealthy as Albania.

          • Colonial Rawshark

            I disagree with you. The oligarchs have done very well out of impoverishing Greece and putting it under the boot of the economic hitmen.

            The banksters now want access to Greece’s economic assets at cents in the dollar.

            It’s the age old game of extortion dressed up in an IMF suit and tie.

            • Gosman

              You could easily confirm your view. Of the Billions of Euro’s in debt racked up by Greece over the past 15 odd years where was the majority of it spent? If it was spent by government on subsidies to wealthy people then you would have a case. If it was spent instead on such areas as pensions, health care, and supporting loss making parastatals then this is not supporting the wealthy oligarchs as you suggest.

  9. Karen 9

    Keith Ovenden has been running a live blog from Athens about the election from a left viewpoint.

    If you are alarmed by the coalition with a right wing party there is a good analysis of the reasons behind it, although Ovenden does not support it. Scroll down the posts to 2 posts below the Mae West clip for this. The Mae West clip also explains the reasoning – when caught between two evils she preferred to choose the one she hadn’t tried.

    • The coalition with Independent Greeks will trap Syriza into serving the interests of the Greek bourgeoisie and German imperialism. It is a rightwing bourgeois party similar to UKIP. It will prevent Syriza from becoming more ‘anti-capitalist’.
      The leadership of Syriza favours this as the price to pay for the power to negotiate with the Troika. The left in Syriza is opposed to this.
      The Communist Tendency in Syriza is arguing that Syriza must abandon this coalition and put more pressure on KKE MPs to defect to provide a majority.
      This is more likely to occur as events make compromise with the Troika very unpopular and a break with the Euro comes closer.
      Failing this Syriza should have the guts to try a minority government, and face another election.
      Far from pissing the masses off, another election will send the message that Greece needs a radical break from the big European imperialist powers which will rally popular support to return Syriza to power with an absolute majority.

      • Gosman 9.1.1

        Which makes sense if Greece wants to leave both the EU as well as the Eurozone. However these are not the policies that Syriza campaigned on. Why do you think they want to remain in both?

        • dave brown

          Read the article and find out.
          The short answer is that the Syriza leadership are reformers who think that they can negotiate a deal with the EU that will stop austerity.
          They pin their hopes on becoming beneficiaries of QE.
          As yet the majority of workers are going along with this in “hope”.
          Now they have Syriza in power, though hamstrung by a right wing partner, this strategy will fail as QE is inflationary unless the working class is whipped to produce more commodities to exchange for these bits of paper.
          Debt bondage is the ultimate whip held over the working class.
          It is a mortgage on the labour of this and future generations of workers.
          They will soon realise that they are still the being played as pawns to pay for the crisis of EU finance capital the can’t make real profits.
          So the radicalisation of the Greek masses will move inexorably towards a break with the EU sooner or later.
          The more that the left in Syriza presses for cancellation of the debt the sooner it will happen.
          Once this happens in Greece, or while it is happening, the other heavily indebted PIGS will join the fray. Spain is well on the way already.

          • Kiwiri - Raided of the Last Shark

            hamstrung by a right wing partner

            dave brown:

            Just very quickly as I can’t fact-check for now …

            From memory, this “right wing partner” are the Independent Greeks who had broken off from Samaras’ party and government because the IGs want to renegotiate with the troika.

            IGs were quick yesterday to offer their support to Syriza and they (IGs) did not even ask what kind of governing arrangements they (IG) would seek.

            So on the matter of going back to the table to renegotiate, both Syriza and IG are at one. If they see eye to eye about that, then both of them get what they want and can deliver what they have promised to their voters.

            As to other IG policies, I recall there might not be much alignment with Syriza. But that is another chapter for later. Get over this one on the debt and Greece’s economy first, before moving on to other policies, would be my way of looking at the issues if I had to advise Syriza.

      • Olwyn 9.1.2

        However, they would face another election with their moment of triumph past, and give those opposed to them, no doubt with bags more money to spend, a chance to regroup. I say, get hold of the levers first, and sort out how you are going to proceed second, without losing sight of your priorities. After all, the coalition with the Independent Greeks could well bring about defections from the KKE into the Syriza camp, with a view to strengthening the left’s position.

        • dave brown

          Two things wrong with this.
          The dynamic of Greece being squeezed to death by Eurobanksters radicalising the working class does not allow for an electoral reversal away from Syriza back to the right. Another election would reflect that increasing radicalisation.
          Second, the reason that KKE won’t join Syriza is that it wants to break from the EU.
          The dynamic is heading in the direction of a break from the EU.
          So Syriza rejecting Independent Greeks and fighting to cancel the debt and break from the EU will rally working class supporters of the KKE and even PASOK which could lead to MPs breaking ranks to give Syriza the majority.
          It will also increase the influence of the left in Syriza over the ‘central committee’ and bring the parliamentary struggle into line with the militants in the streets.

  10. Pascals bookie 10

    And this post on the political options they faced in forming a govt:

    • Karen 10.1

      This is an interesting analysis. Keith Ovenden preferred a minority government but this article from theirategreek suggests the reason for going into coalition was the impending renegotiating of the EU package which would require a stronger mandate. The question is whether by going into a coalition with the Independent Greeks do they give them more legitimacy, which would be dangerous in future elections.

      Best case scenario is they stick together for the debt recovery negotiations, then Syriza get support from KKE members breaking ranks in order to thwart the ambitions of the Independent Greek Party.

      • Kiwiri - Raided of the Last Shark 10.1.1

        It seems to me from reading the little that I have done in past months about Tsipras that he is grounded and is clear sighted about what necessary outcome to achieve. Rather than being just a radical, he is – what I would call – a new realistic radical.

        Here’s an insight into how far he went, or didn’t go, during the late 1990s student protests:

        Many of the students, particularly on the leftist fringes, were pushing for a radical overhaul of the country’s education system. “We didn’t want exams, we didn’t want grades, we wanted an open school,” recalls Matthaios Tsimitakis, an Athens journalist who was one of the student leaders at the assembly.

        But not Mr Tsipras. Despite his leftist credentials, Mr Tsipras urged only one demand: withdraw the reforms. Although the protests would grow tense — a teacher was killed in clashes between rival groups in January 1991 — Mr Tsipras, who became one of the main negotiators with the government, held his line. And, three months after they were proposed, the government sacked its education minister and withdrew the reforms. The protests ended.

  11. Undecided 11

    Will be interesting to see how Greece goes, its always better when the experiment takes place in another country

  12. joe90 12

    Richard Wolff on the situation leading up to the Greek elections.

  13. Colonial Rawshark 13

    CNN – how austerity kills. Greek public health budget had been slashed by 40%; 35,000 public health workers laid off: disaster in suicides, depression, HIV infections and drug use.

    On a per capita basis the NZ equivalent would have been laying off 10,000 or so public health workers.

    This is the kind of tragedy that Gossie thinks is a joke.

    • Gosman 13.1

      They couldn’t afford to pay for it to begin with. It would be like a pacific Island borrowing for top of the line health care in the nation and then being forced to cut back. The top line health care may have led to improvements in healthcare and extending the life of the general population by a number of years but it would be inaccurate to suggest being forced to cut back is the cause of an increase in deaths occurring earlier. The Greeks do also have choices. If they want to fund health care they can stop funding their loss making state owned enterprises like their National railway company.

      • Colonial Rawshark 13.1.1

        Sorry mate, but your idea of subordinating an entire society’s wellbeing to the international financial markets is stupid.

        • Gosman

          The new Greek government is not suggesting it removes itself from the world financial system. Indeed it seems to be very keen to stay within it but ask to be treated better.

          • Colonial Rawshark

            is the point of the financial system to support an oligarchy made up of the 0.1% (and their helpers), or is it to support the people within a society allowing citizens to apply their energy, talents and education to boost the real economy.

            The Greeks think it should be latter. I would tend to agree with them.

            • Gosman

              Yet they don’t want to remove themselves from such a system. Why do you think that is CV?

              • Colonial Rawshark

                Dunno, ask them. But they did tone down their anti-EU sentiments markedly in the last 6 months which political commentators saw as their reaching out to the broader aspirational middle class.

                • Tracey

                  and they are doing what we are told is the keystone of capitalism and our moneyed society, they are negotiating a better position 😉

                  • Colonial Rawshark


                  • Gosman

                    Which suggests they aren’t offering a radical departure from the current system. Thjey are merely wanting a better deal. Personally I don’t think they have much show mainly because if they achieve their goals then the Italians and Spanish may get similar ideas.

                    • Tracey

                      except you have this idea that germany is in a strong position because it has loaned them the money. It appears to me Germany is in the weaker bargaining position precisely because if Greece defaults, then so may Italy and Spain. Ergo, Germany will negotiate with greece to keep them repaying and in EU. behind closed doors, as part of the negotiation, the new government can say “fuck you, we will leave EU, default and you get nothing. Our people cant be worse of than they are today. Your move.”

                    • Gosman

                      Germany hasn’t really loaned them this money. The money is from a number of sources some of which includes German banks and some of which also includes the ECB. Ultimately the losses will be whoever holds the liability which I suspect will be more the ECB than any privately controlled banks who have probably written off much of the debt already.

                    • Tracey

                      so you think a full default by Greece won’t have an adverse impact on the German economy?

                    • Pascals bookie

                      This may help Gos:


                      “But as both Daniel Davies and James Galbraith point out — with very different de facto value judgments, but never mind for now — is that at this point Greek debt, measured as a stock, is not a very meaningful number. After all, the great bulk of the debt is now officially held, the interest rate bears little relationship to market prices, and the interest payments come in part out of funds lent by the creditors. In a sense the debt is an accounting fiction; it’s whatever the governments trying to dictate terms to Greece decide to say it is.

                      OK, I know it’s not quite that simple — debt as a number has political and psychological importance. But I think it helps clear things up to put all of that aside for a bit and focus on the aspect of the situation that isn’t a matter of definitions: Greece’s primary surplus, the difference between what it takes in via taxes and what it spends on things other than interest. This surplus — which is a flow, not a stock — represents the amount Greece is actually paying, in the form of real resources, to its creditors, as opposed to borrowing funds to pay interest.”

                      Now be sure to read the rest, but the point is that the numbers on the debt aren’t maral, or even sensible, hard numbers. They are fictions. The real value of the Greek debts is nothing, unless there is a deal. So there will be a deal.

                    • Gosman

                      The Euro zone Creditor nations and the financial system has had a good number of years to reduce major exposure to Greece. Spain and Italy are the greater risk if they decide to renegotiate or default. This is why the Germans and others will be playing hard ball with the Greeks. If the Greeks get an easy ride then the Spanish and/or Italians may be tempted to try it on as well and that would spell real problems.

                    • Kiwiri - Raided of the Last Shark

                      and that would spell real problems

                      and that would spell real problems for the bankster class and casino-capitalists.

                    • Gosman

                      Also to hard saving northern European households as the value of their savings and pensions plunge. Instead of Athenian pensioners suffering it would be Berlin pensioners.

                    • Tracey

                      get off your pensioner bandwagon. The problem is way more deep and complicated than this whole “everyone retired at 55” false meme.

  14. hoom 14

    The thing which amazes me is that even the rightwing press always refers to Austerity stuff as punishing, painful, crippling etc. because it very obviously is, yet its supposedly the only solution to economic issues.

    If its always punishing, painful, crippling etc. then its goddamn not a solution.

    • Colonial Rawshark 14.1

      Its not painful and punishing for the bankster class who are collecting the interest payments from the Greeks.

    • Gosman 14.2

      Okay then. Perhaps you can offer a solution for the Greeks that doesn’t involve someone somewhere having to suffer some sort of impact on their economic wellbeing. Remember the new government still want to remain within the Eurozone. What path can they follow that would enable them to do this at the same time as having less painful policies.

      • Paul 14.2.1

        Tell the banks to depart.
        Not in a polite way.

        • Gosman

          What Banks? The Greek banks? That won’t lead to lower unemployment. In fact the opposite will occur as the economy will contract further and credit dries up completely.

          I suspect you are meaning foreign banks lending to both Greeks individually and to the State. Where will the Greeks get the Billions of dollars in Euros to pay for the social spending they want to undertaken given they don’t have enough revenue at the moment to cover it?

          • Colonial Rawshark

            The ECB is about to print hundreds of billions of Euros out of thin air to gift to the bankers.

            Why don’t you ask them.

            • Kiwiri - Raided of the Last Shark

              Ho Ho Ho

              Excellent point, CR.

            • Gosman

              Do they expect the same bankers they are going to stop paying back to just give them some of this new money ? I think they are going to be sadly mistaken if they do.

            • Tracey

              gossie doesn’t believe in printing money. He may still be waiting for Key to tell the EU leaders they are loonies.

              • Gosman

                I’ve never denied that governments can print money. I just acknowledge the likelihood of negative consequences as a result.

                • Tracey

                  And yet, that is what the Eu is going to do… and Mr key just doesn’t quite have the courage to call them loonies, does he?

                  There are negative consequences to continue doing things the same way decade after decade after decade unless you are in the top 1-5% of our nation. Still a system that only fails 95 to 99% is usually seen as a success, right?

                  • Gosman

                    Are you in this top 1-5% Tracey?

                    What I find so galling is that leftists like yourself make out that the system is so screwed up that the only ones who benefit are the top1-5% and everyone else slowly becomes poorer and poorer yet to are able to propagate this nonsense on a machine that the super rich would only have dreamed of owning not 20 years ago.

                    • Murray Rawshark

                      20 years ago we may not have been able to buy today’s computers, although what we could buy weren’t too bad. I think this was more than compensated by being able to afford to live in a reasonable house. We could also swim in most rivers. Most of us were not getting spied on. Atmospheric carbon dioxide was quite a bit lower. Stop thinking just in terms of money. If you can.

                    • Tracey

                      I am not in the top 1-5% based on my annual earnings. My partner earns close to 6 figures so is. We have 800k equity in our home. I know I am well off Gosman and I know why. I am not a “leftist”. You can try to put me in a box but I am me, my own thoughts, my own journey and am accordingly a hybrid of notions.

                      If you are referring to a computer I find it galling when rightists like you cling to a system that has largely failed to deliver on its own promises but prattle on “it’s not perfect but it’s the best system we have” always assuming that there is only one answer, socialism or capitalism, which means keeping everything as it is now. You sound like Collins and Bennett berating Turei for dressing very well and thereby purporting to negate her credentials or right to speak for the poor. You have a computer so the system isnt so bad. Really?

                      And finally when everything else you have repeated ad infinitum today doesn’t get resounding approval from everyone, you resort to strawmen and ad hominem.

                    • Colonial Rawshark

                      I think this was more than compensated by being able to afford to live in a reasonable house.

                      And that’s the point. Material trinkets have got dirt cheap while the basic cost of living has gone sky high.

                      A months groceries for a family of 5 can easily add up to the same $$$ as a 50″ LED TV, which once upon a time would have been considered a “luxury”.

      • Colonial Rawshark 14.2.2

        No one benefits from Greece consumers being unable to buy the EU’s goods and services.

        The problem is that the large financial institutions don’t care about that detail; they just want their pound of flesh.

        It is now a truism to say that debt which cannot be repaid will not be repaid. Steve Keen echoes your view – it’s now simply a matter of figuring out how not to repay it.

        One of Syriza’s finance spokespeople Yanis Varoufakis has already answered this question in depth.

        • Tracey

          finance companies just stopped paying their clients when they had misspent the money or misinvested it. Misinvested is just another word for “used”.

          the greeks have used more than they could repay, liquidate seems the obvious answer, isn’t that the capitalist way… and just start up as a new country with a different name. 😉

      • meconism 14.2.3

        Write the rest of Europe an invoice. Charge them for the knowledge, science rhetoric, maths and architectural brilliance that the following worked out for us. Off the top of my head, Socrates, Plato Aristotle, Pythagoras, Archimedes, Sophocles, Euripides, Aeschylus and Aristotle. Make the invoice total, oh I dunno 100 billiion per annum multiplied by 3000 years and tell them they have until the end of the month to pay in full otherwise penalties will start accruing on the outstanding amount. Then sit back and wait.

  15. Kiwiri - Raided of the Last Shark 15

    Well worth listening (or reading the translation) as well as hearing the questions put by The Guardian to Tsipras early last year to gain some understanding of where Syriza is coming from and what they will do next:

    • Kiwiri - Raided of the Last Shark 15.1

      Ok, the clip is almost ten minutes.

      Given the importance of the material, and for busy people, if the following can be excused (an exception made here for the Penny Bright-like pasting job!), here is a rough transcript that I put together:

      [Question: … How do you explain Syriza’s success and explosion, politically, in the last couple of years in particular?]

      “I think it is a very natural development
      given the crisis in Greece
      and that barbaric adjustment that has been chosen.

      It has torn apart the social fabric and has
      caused the political system to disintegrate.
      It has severed the links of political representation
      between the traditional political parties
      and the social groups that they once represented.

      Particularly, the links between social democracy
      and the middle classes
      in terms of the rights, demands and interests of the middle classes.
      So it’s natural for the Left to occupy that space
      that has consequently become vacant in Greece.”

      [Question: … regarding the growing threat at the same time from the far-right, fascist Golden Dawn party … and the {Samaras} government increasingly trying to play the security and immigration cards against {Syriza} …]

      “I think the only way to confront this phenomenon
      is by, once again, inspiring the people in Greece
      to believe that through their struggles, and through a democratic path,
      they are able to deal with this barbaric assault against them.

      The only way to combat the spread of neo-Nazism
      is by halting this barbaric austerity programme.
      That is what is causing the spread of neo-Nazis across Greece.

      The Greek people do not have a tendency to follow such tendencies.
      On the contrary, they have crushed fascism during,
      before and after the second world war.
      They were a people who were at the core of resistance in Europe.”

      [Question: Syriza has opposed the idea of Greece leaving the Euro … what leverage would a Syriza or Left-led government have when negotiating?]

      “Greece, like any eurozone member, has a strong bargaining chip. What is this?
      Well, if any of the 17 eurozone members were to exit,
      the next day the euro would be unsustainable.

      In such a situation, Germany would be the one to revert to the Mark.
      This strong bargaining chip has not been utilised by any Greek government so far.

      And so far all Greek governments have accepted all these cruel austerity measures without negotiation.
      Look, there are no landlords and tenants of the eurozone.
      If this is something that Mrs Merkel cannot understand,
      well, then she must be convinced
      that this is how it is in terms that,
      unfortunately, may not be very polite.

      However, in politics and the economy,
      we are often forced not to be polite.

      When, presently, in Greece one and a half million people are unemployed
      there are 700,000 families with not a single breadwinner
      and we are confronted with such
      an unprecedented humanitarian crisis
      we cannot be particularly polite
      to those who have caused this crisis.”

      [Question: no question that Syriza has a very radical programme of complete opposition to a failed neoliberal model: a programme of public ownership of the banks and utilities for the redistribution of wealth and income, for pulling out of Afghanistan and NATO, and for workers rights … do you think there might be a danger of a Syriza government in practice having to make compromises on such a scale that it would alienate its support and base?]

      “This is a long discussion
      that is also taking place in Greece
      as to whether Syriza would be coming closer
      to what some refer to as ‘realism’.

      However, in light of the current brutal reality
      in Greece and Europe,
      there is nothing more realistic than to demand to change such reality.

      These days, the only realism is to overturn
      this social injustice, to overturn these inequalities,
      and to overthrow this model of casino-capitalism
      of profit-seeking capitalism that
      devours the flesh of European societies.

      I believe that Syriza can be the spark
      that sets the field alight.

      We are at the tail end of existing neoliberal capitalism in Europe.

      This crisis is not coincidental. It’s a structural crisis of capitalism and of its neoliberal model.

      Syriza – and a European south following the electoral success of a government of the Left in Greece – are capable of constructing an example for Europe.
      Europe has always played a decisive role in developments in world events.

      We believe that at times of such barbaric events,
      what are demanded are radical solutions.

      If we gain power and do not try to change everything, then we have no chance of remaining in power.”

      – Ends –

      • Tracey 15.1.1

        Thanks for this

        • Colonial Rawshark


          • Kiwiri - Raided of the Last Shark

            Cheers for the responses.
            I wondered if the material might be of value to readers here but decided that, at least for greater awareness about Syriza and Tsipras, I would spend part of my morning going through that video.

            Indeed, watching the video had strong impact but going through the transcript provided a lot more to reflect upon.

            I am glad that Tracey summed up, for e.g. 17.1.2, what I wanted also to say.

            Thanks for providing the illuminating and insightful perspectives this morning, CR.

            p.s. Tsipras posed the hypothetical about “17” members of the Eurozone making an exit (there are a total of 19 members, as I understand). And even counting in Greece, that would be 18 … well, that perhaps leaves one more very obvious one to be counted … who would probably not (also) be contemplating an exit.

  16. Andrew Welsh 16

    Drop all the rhetoric, especially about ‘the left reclaiming Greece’s future’ (my pick is you are about to see the left instrumental in Greece’s demises).
    There are some bloody good lessons to be learnt, including living within your means (Greek population) and bond holders taking a hit and learning a thing or too about lending to basket cases like Greece (financiers).
    Greece should bankrupt; no great loss to the German and Swedish banks given the ECB is about to embark on a 1.1trillion qe programme so guaranteeing deposits is no problem.
    As for Greece’s future?, who cares as its hardly a mecca for banking or industrialisation, cheap place for a holiday with a lazy population that thought it could provide a million dollar standard of living on a pensioners income.

    • Colonial Rawshark 16.1

      Individuals like you who view human beings from the standpoint of international capitalists who don’t give a flying fuck about a country or the welfare of its peoples can fuck off.

      Although you deserve credit for at least being honest about it.

    • Tracey 16.2

      when the finance companies didnt live within their means, or mis-used their clients money, or didnt live up to their promises, they just closed the door, shut the company and often didn’t even say sorry to their clients.

      when banks didnt live within their means they got injections of taxpayer dollars. No consequence for them. So take your lazy greek memes and try to understand that your smugness is misplaced.

    • Murray Rawshark 16.3

      Thanks for expounding the racist view so eloquently.

  17. johnm 17

    Paul Craig Roberts has made some very perceptive comments on the Greek situation:

    ” This is what Goldman Sachs did to Greece, intentionally or unintentionally:
    This established a new principle in Europe, one that the IMF has relentlessly applied to Latin American and Third World debtors. The principle is that when foreign lenders make mistakes and over-lend to foreign governments, loading them up with debt, the bankers’ mistakes are rectified by robbing the poor populations. Pensions, social services, and public employment are cut, valuable resources are sold off to foreigners for pennies on the dollar, and the government is forced to support US foreign policy. John Perkins’ Confessions of an Economic Hit Man describes the process perfectly. If you haven’t read Perkins book, you have little idea how corrupt and vicious the United States is. Indeed, Perkins shows that over-lending is intentional in order to set up the country for looting.”

    ” It took the Greeks a long time to realize it. Apparently, 36.5 percent of the population was awoken by rising poverty, unemployment, and suicide rates. That figure, a little over one-third of the vote, was enough to put Syriza in power in the just concluded Greek election, throwing out the corrupt New Democracy party that has consistently sold out the Greek people to the foreign banks. Nevertheless, 27.7 percent of the Greeks, if the vote reporting is correct, voted for the party that has sacrificed the Greek people to the banksters. Even in Greece, a country accustomed to outpourings of people into the streets, a significant percentage of the population is sufficiently brainwashed to vote against their own interests.

    Can Syriza do anything? It remains to be seen, but probably not. If the political party had received 55% or 65% or 75% of the vote, yes. But the largest vote at 36.5% does not show a unified country aware of its plight and its looting at the hands of rich banksters. The vote shows that a significant percentage of the Greek population supports foreign looting of Greece.

    Moreover, Syriza is up against the heavies: the German and Netherlands banks who hold Greece’s loans and the governments that back the banks, the European Union which is using the sovereign debt crisis to destroy the sovereignty of the individual countries that comprise the European Union, Washington which backs EU sovereign power over the individual countries as it is easier to control one government than a couple of dozen. ”

    ” Already the Western financial presstitutes are warning Syriza not to endanger its membership in the common currency by diverting from the austerity model imposed from abroad on Greek citizens with the complicity of New Democracy.

    Apparently, there is a lack of formal means of exiting the EU and the euro, but nevertheless Greece can be threatened with being thrown out. Greece should welcome being thrown out.

    Exiting the EU and the euro is the best thing that can happen to Greece. A country without its own currency is not a sovereign country. It is a vassal state of another power. A country without its own currency cannot finance its own needs. ”

    ” The West has devolved into a police state in which government is no longer accountable to law or to the people. There are no jobs for young people, and no income security for the elderly. The West is actually in the process of looting itself. Just look at what is happening in Greece. In order to guarantee the profits of the private banks from outside Greece, the Greek people have had their pensions cut, their employment cut, their social services cut, and they have had to sell their valuable public properties at low prices to private purchasers from outside their country. The same looting is now going on in Ukraine, and Italy, Spain, and Portugal face the identical fate. “

    • Gosman 17.1

      Except the lenders to Greece have already take a haircut on their debt so they haven’t come away unaffected.

      Question for you. You state that Greece should welcome exiting the EU and Eurozone. Why do you think that isn’t Syriza policy given it seems to have a massive upside according to you?

      • Colonial Rawshark 17.1.1

        Syriza is indicating that it wants a debt write down and repayment moratorium on the scale of what German received in the 1950s. Under those conditions I think that staying in the EU is a good idea.

        • Gosman

          Yes but that is purely pie in the sky wishful thinking.

          • Colonial Rawshark

            It worked to create a massive post-war German recovery and rapid European economic growth in the 50s and 60s.

      • Tracey 17.1.2

        you are assuming, wrongly in my view, that Greece has something to lose from requesting a debt write down but staying in the EU. It is in a situation of nothing left to lose. Germany on the other hand will probably blink first if it thinks it will have its entire debt defaulted upon. SO, in that scenario Syriza is looking to reduce its debt significantly and stay in the EU. A pretty good strategy

    • Colonial Rawshark 17.2

      Wayne Mapp reckons that the western system is a better alternative to the Russian or Chinese way of doing things, and it sure is – as long as you are part of the top 5% and don’t live in a capitalist sacrifice zone like Greece (a term that Chris Hedges uses)..

      Mind you I suppose if you are in the top 5% of people in Moscow or Shanghai, there ain’t too much wrong with the system there either.

      • Wayne 17.2.1

        Colonial Rawshark,

        No doubt about it that Greece is better than China. The Greeks have genuine freedom of expression. They have regular elections with real choices, which they have just exercised.

        Now I guess the negotiations begin. Unclear yet whether it is better for the Greeks to keep the Euro or get out. I guess it all depends on the deal. And the extent of the patience of Angela.

        • Tracey

          Ms Merkel

          • Ovid

            Dr Merkel. She has a PhD in chemistry.

            • Tracey

              I prefer to only call DR to people who have medical degrees… 😉

              • nadis

                Arent you technically supposed to call them Mr or Ms?

                • Tracey

                  No, that’s specialists. Ordinary, hard working GP’s and residents are Doctors (Dr). Specialists are intellectual and financial snobs who want to be called “Mr” to differentiate themselves from the hard working worker bee doctors.

                  and then the academics who get DR cos they did a post-post graduate degree (thesis on a topic of their choice).

                  • Colonial Rawshark

                    Well, PhDs and other similar advanced degrees are doctoral degrees. People who have gained one of those have earnt their doctorate and the title “Dr.”

                    Your basic medical doctor has two bachelors degrees. They have not earnt a doctoral degree, but are by convention given the title “Dr.” However the title which is actually protected in law is that of “medical practitioner” not “Dr”.

                  • nadis

                    Well, just so long as they know how to fix my rash…….

              • Murray Rawshark

                I prefer to use “my learned colleague” for people who actually know a thing or two.

        • Colonial Rawshark

          Greece wants to stay in the EU; no EU country wants Greece to go. But having 40% of Greeks in poverty or near the poverty line is not going to secure that positive future.

          • Wayne

            I think it is more about staying with the Euro that is the issue. You can be out of the Euro but still in the EU. And I am pretty sure nearly 100% of Greeks want stay in the EU, but I imagine are more mixed on the merits of the Euro.

            • Colonial Rawshark

              Fair enough point.

              • Kiwiri - Raided of the Last Shark

                Fine but for suffering people and their families in Greece, they will likely put their hungry stomachs, heating, shelter and jobs ahead of financial- or political-constructs.

      • nadis 17.2.2

        Aside from the risk of polonium poisoning, a “random” mugging or being arrested on make believe charges, I think being in the top 5% in Russia would great.

        • Colonial Rawshark

          Yeah you mostly only get randomly shot or imprisoned on trumped up charges in the USA if you are poor and black.

    • greywarshark 17.3

      That just makes me think again of Ron Brierley and all the asset stripping that started in about the 1980s whereby companies got bought and eviscerated.

      Since then we have had leverage buying where companies are bought with the purchaser raising huge debt which is underwritten on the value of the assets of the company which are then repaid by selling off parts of the company. Think vultures, think scrap metal merchants, both do necessary tasks but when they kill to get the goodies they are vicious insatiable predators.

  18. Pascals bookie 18

    “The ruling New Democracy party is still wondering how its platform of Endless Suffering For Everyone was defeated by Syriza’s competing message of Maybe Not That.

    Athens voter Elena Mitropoulos said: “I was going to do the responsible thing and vote for continuing austerity, because I know how important it is not to damage the German economy, but madness overtook me in the polling booth.”

  19. Skinny 19

    Default and start again with a clean slate. Pretty much what the bankers got away with. What comes around goes around, so the Germans can suck it up their economy can handle it.

    Rework their tax system and load up the rich dodgers till their arse is hanging out. Jail them and strip them of their assets if they are caught tax dodging.

  20. Jim 20

    whats the beat they suddenly start getting attacked by “AlCiada” ??

  21. TheBlackKitten 21

    Its all very well to say that the rich should be paying more tax but exactly how is this new party going to achieve that? Did they outline how they will do that during their campaign and will it work? These rich people have avoided paying tax for ever and a day and I am guessing that they will be pretty up on the play with fancy lawyers & plenty of money to pay for the best in trying to wriggle out of increasing tax bills.

  22. Philip Ferguson 22

    Piece on left victory in Greece with links to stories about important workers’ occupation:


  23. joe90 23

    The rent is too damn high.

    His position: that years of budget-cutting required by Greece’s bailout deals has created a humanitarian disaster, with vast unemployment and cuts to the social safety net leading to hunger and health crises. It is time, he argues, to renegotiate those deals, particularly now that Greece has reached the point of having a “primary surplus,” meaning that its budget is in balance excluding the costs of interest payments on old debt.

  24. greywarshark 24

    Discussion in Yes Minister on who runs the UK as shown by which newspaper they read.
    Perhpas they have some similor yardstick in Greece.

  25. Once was Tim 25

    This is a really interesting thread to have been following (and to have thus far, refrained from comment).
    Early on the tr^7&s with a RW bent are present. Then the ECON101 sages committed as they are to their ‘learnings’ that have become trad.

    I smell fear amongst the right wing (i.e. the ‘far right’ – if we’re now talking about centrist left as being far left). I smell fear alright. I smell the growth in firms offering personal security options; bullshit gating and fencing; consultants offering various lobbying services.
    Tik Tok Tik Tok …. and what’s so pathetic is that it’s all been needless.
    Greece is an interesting case. If those concerned with 60% youth unemployment and 28% generally; the loss of sovereignty; the privatisation of the people’s assets for private gain: …. etc,. etc. if that party is considered “FAR” left …. how about we judge those moderate Right wingers on the same terms. I think we’d probably have to acknowledge that they’re coming close to “FAR” right. That’s the trouble with fascism – it creeps up and bites ya on the bum before you know it.
    I’ll now sit back and watch and wait for all and sundry to start quoting various academic’s ‘laws’ (lores).
    I’m fucking glad Greece has happened!. Fucking sight better than seeing what have could have eventuated (but might still).

  26. greywarshark 26

    Julbilee 2000 debt relief. Time to rescurrect the scheme and promote it and institute and move forward. If Greece can now pay its way then most of the debt should be wiped. As citizens we have had occasions when people were totally wiped out by business. Well business can take its own medicine.

    Post Jubilee 2000. How it went and and how it might be done again.

    The Rolling Jubilee debt terminator might be something that we could be doing ourselves. Bringing good by being good and just a bit generous.

    But watch out for vulture funds!

  27. Observer (Tokoroa) 27

    Onya Greece !

    The flaw that distorts Banking, is their printing of money. The Banks risk nothing. So lets save our crocodile tears for real sufferers.

    The Banks print money at wiil, and then immediately make borrowing customers pay interest on the money which has cost the Bank only a bit of printing ink.

    Therefore, if customers default they are not hurting any bank in any way shape or form. Except of course, for the cost of printing ink.

    Capitalism does not make true wealth. It makes Debt. And the debt costs the Bank nothing.

    But it sure costs the borrower, For the borrower pays back from his hard earned wages and pays interest on top.

    The customer risks all! The banks are the rats who lose nothing. Capitalism in action Huh? C’mon Greece!

    If Capitalism is to survive, it will need to gut itself of fraud and deceit and the printing of money.

    • Colonial Rawshark 27.1

      I think everybody should be realising just about now how arbitrary this contrived scam of money creation is.

      And how creating $500B to bail out a bank’s board of directors, senior management and shareholders is seen as sensible while creating $500B to allow a country to invest in its people, its services and its infrastructure is seen as “unrealistic” and “impossible.”

  28. JonL 28

    Greg Palast had a good article on the situation last week.
    He should know – he used to be a Forensic Economist in the IMF and studied under Friedman………

  29. SPC 29

    The coalition partner choice of Syriza (a group that wants to leave the EU) gives them more negotiating power with the EU.

    Defaulting on debt and withdrawal from the Euro being the fall back option – given the budget is near balance without historic debt cost this is possible. Especially if Russia or China (their other IMF in development) is prepared to provide bridging finance.

    Given the EU would expel them for debt default, the EU is in the role of enforcing the will of banks on member states (note the use of EU taxpayer resources to subsidise debt repayments to banks).

    The Greeks have two options, seeking the best deal they can for themselves or a EU wide programme that benefits Greece and other member states of the EU.

    The latter would be using QE to buy back 50% of debt of EU nations. This does not involve using taxpayer resources and will not inflate asset values (nor labour cost) in a deflationary environment with high unemployment.

    Our interest in the matter is the health of global finance – given we are currently dependent on finance created offshore as loans to our banks to finance our home mortgages.

    If QE is used to buy back debt by the ECB, it should coincide with increased capital requirements for banks. Loosening should have an equivalent tightening that stabilises the EU economies (greater growth) and secures the banking system.

    Another area of reform is a common debt cost or at least a debt band for Euro nations (c3-5%), rather than some countries paying 2% and others 8%. Germany would be in crisis if it was paying 8% on its debt.

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    1 week ago
  • Natural hydrogen resource should be free of Treaty claims entanglement
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  • Government responds to unsustainable net migration
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