You also verge back and forth on blaming Greeks "for never having addressed structural problems" and blaming Syriza for "rolling back systematic reforms". You should stick to a line. It's factually incorrect that the Greeks "didn't do any of that": 255,000 public sector layoffs, 2010 tax/pension reforms, and the reduction of the deficit from about 15% to 2.5% of GDP indicate otherwise.
The problem is that they did do austerity and it didn't address their problems. The Greeks have already cut their government spending by something like 30% over the past several years. That's basically unheard of. Imagine the US cutting $1 trillion per off their budget - we struggle to find $50 billion to cut at once. The result was that the economy shrunk just as much and they ended up with the same debt problem except with a much smaller potential revenue base to fix it. We can keep saying Greece needs to make changes - and that's true. But the problem is that the changes Europe wanted failed, and they just want more of the same going forward. They've rejected numerous different ideas Greece has thrown out there - some legitimately stupid, but others potentially workable. The only solution for Greece is getting their economy growing in the short-term and relieving their debt payments in the short-term (which lets them spend and get the economy growing). Demanding that Greece continue to cut spending did not work and will not work. The pension system sucks, but if you crippple it now, that just takes away the money that Greek people need to spend to make their economy go somewhere, so it's completely self-defeating. We've seen it for the past 4 yaers. The only solution, as unappealing as it is, is giving Greece relief now and then implementing longer-term changes, which Greece has indicated it's open to doing. The struggle is actually enforcing that, but if there is to be a solution, that is the only way it can work. As far as Europe's reaction goes, while Germany has continued to be hardline, both France and Italy have made pretty significant overtures the last few days arguing for more need for debt relief to make anything work here. They seem more open to new ideas. That follows the IMF's report last week suggesting that the current EU-proposed path was unworkable.
NS -- why do you think Greece is not getting more support from Spain, Italy and France here? It seems France should support them more politically, and Spain and Italy face similar challenges?
http://www.ft.com/intl/cms/s/0/74568606-23bc-11e5-9c4e-a775d2b173ca.html#axzz3fJsr9GK2 François Hollande seeks to play role of Greece’s saviour High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/74568606-23bc-11e5-9c4e-a775d2b173ca.html#ixzz3fJszVbAM Greece’s best hope of remaining in the eurozone may now run through Paris, where president François Hollande has emerged as a tireless — and lonely — advocate for keeping Athens in the fold. Even as other eurozone leaders have grown exasperated with Greece’s leftwing prime minister, Alexis Tsipras, and resigned to a Grexit — a Greek exit from the eurozone — Mr Hollande has continued to manoeuvre behind the scenes for a deal that would send about €7.2bn in rescue funds to Athens. Mr Hollande is determined to keep intact a single currency that was a French-inspired initiative to deepen European integration. Still, he faces long odds of shifting Angela Merkel, the German chancellor — and a sceptical public in France, where his own approval ratings are mired at historic lows. ... France is in a complex position of wanting to help Greece while not alienating Germany and having a popular opinion problem within their own populace.
I don't get that either. If your money is United, then you should be United. In America when the states are poor the richer states constantly give them money no one bats two eyes at it because it's all one country. They need to treat each other as one big country or it wont work.
This article doesn't address really anything that happened post-2010 and when it does, it fundamentally skirts over why austerity-contigent loans were a bad idea: ex: blaming the Greeks for ballooning debt/GDP when this was always a deliberate part of inflating Greek debt with austerity-contigent bailouts rather than restructuring it altogether. see the same thing in Spain, where debt/GDP tripled. Also, I find it really weird that you can easily dismiss two Nobel Prize winning economists on economics, but you're really big on somebody with a BA in politics, and a MA in politics on economics. I understand you're very credential-oriented and the world of these credentials are being fixed to your views--but it doesn't add up at all. lol.
Can't read your article, Major due to a paywall. Austerity at the bnb keyboard. I do see a lot of support for keeping Greece in the Euro zone...coupled with frustration they're not doing their part. So, while the Germans are ready to give them Das Boot, others seem to want them the clean up their act to forge a new deal. But I'm not seeing the sentiment that they've done what they've been asked to do and it hasn't worked. I'm not seeing the sentiment that Greece has made reasonable proposals only to be rebuffed.
France has been Greece's strongest supporter. Spain is currently ruled by a centre-right party that is terrified of a leftist, populist movement (Podemos) that is very similar to Syriza. Their election dynamics are similar to Greece pre-Syriza. They're going to do everything possible to discredit Syriza. Renzi is probably hedging his bets by making sure Italy is differentiated from Greece.
Define exactly what you mean by "austerity" in the context of Greece, and why you are against it. - Are you against reforming a totally bloated public system? - Are you against making people actually pay taxes? - Are you against actually checking whether people who keep getting pensions are still alive? - Do you think a two-star economy should run a five-star welfare state? If your answer is "yes" to all these questions and you regard fixing all these issues as "austerity", then I don't know what to tell you. But these are all things that Greece has never actually tackled. And they have elected a government that basically explicitly said that if the EU expects these things from them, the EU are "terrorists, rapists, nazis" and that one is "at war" with those who have been giving them money. Three days later, Tsipras goes back to Brussels and...asks for more billions. The nerve?!?! The way these things work is that first, you must show a willingness to bring your house in order, before you can ask for more money. If you don't show that willingness but instead (literally (Varoufakis) and figuratively) show your creditors the finger, but at the same time ask for more money - why should anyone pour more money into a bottomless pit? Is that fair to the poor pensioners in Spain, Portugal, Ireland, Poland, Germany? Why should they pay for Greece affording themselves a welfare state that their own economy cannot sustain?
This is actually an interesting post. The issue here is that there is somewhat of an economic union, but not really a political one. It's kind of a birth defect of the EU. Greece basically regards the EU as a self-service shop for them, where they can always leech money, but they are not willing to do anything for the EU. And the other countries are simply not willing to be treated like that. Within Germany (or within Italy, North Italy vs. South Italy), there are similar issues, but because there is a stronger bond, as it is in the USA, despite some grumblings, transfer payments are made. But there you actually have a joint democratic government and a perception of being "one country". That is not the case with the EU. And that is part of the root of the problem.
France is basically a socialist country, and Hollande a complete idiot. So yeah, I can totally see him farking this all up.
I am not totally disagreeing with you about potential solutions, but from the perspective of the EU, you have to look at what precedent you are setting if you basically allow one country's extremist government to blackmail you into that. It's a dilemma. The big mistakes were made 5 years ago, and now it is even more difficult to fix. As I said before, I am in favor of a Grexit and then giving humanitarian aid, which is clearly to be attributed to those who give it - not to the Syriza extremists and their extremist coalition partner.
Austerity means the conditions the troika implemented along with bailout loans to the periphery countries. The loans were meant to buy private banks time as private Greek debt was shifted to public Eurozone institutions. They failed because 1) the debt level was always unsustainable 2) the damaging effects of austerity were underestimated 3) subsquently, the debt level of periphery countries balooned and they were forced to implement unpopular reforms in the middle of economic crises. they were also unable to service the debt properly so ironically, they had more debt and now it belonged to European taxpayers you spend a lot of time comparing YV to a stalinist who will hold power to any degree possible (especially ironic now that he has resigned) so I doubt you will understand why him and Syriza members protested against getting European taxpayer funds as early as 2010. <iframe width="560" height="315" src="https://www.youtube.com/embed/jH5Yv7iwfhs" frameborder="0" allowfullscreen></iframe> I don't think you get that this debate is about a rancid set of policy responses to the Greek situation that made things worse rather than better, not the Greek situation itself. Again--does "austerity work?". In the context of the austerity-contigent bailout loans the Eurozone gave to periphery countries, the answer is a pretty stark no. and yes, there were always alternatives. Hindsight is 20/20 but those alternatives look starkly better now that the mistakes of how austerity was implemented in the Eurozone have come to light. 1) The Greek state has laid off about 30% of their workforce in the last few years. 2) Greek tax reforms took effect in 2010 and the current Syriza government has stated a admittely theoretical focus on tax evasion. 3) Greek pension reforms in 2010 were some of the most significant in Europe. 4) No, and neither does anybody else in this debate if you've been following closely. The important point to make here is all of this could have happened without forcing a gun to European taxpayers and Greek policy-makers in an ineffectively designed forced austerity + bailout program.
go Nigel go! <iframe width="560" height="315" src="https://www.youtube.com/embed/94UcyJnRcGU" frameborder="0" allowfullscreen></iframe>
The US has a single national fiscal and monetary policy. We also have nationally funded social safety nets. So if a state falls on hard times, citizens aren't worried about medicare cuts or food stamp cuts. Also for some stupid reason, the Eurozone never had FDIC style bank guarantees. In the US, all of our deposits are guaranteed by the federal government (up to $100k). That means even during the 2009 financial crisis, no one was freaking out about possibly losing their bank deposits. Europe only got a deposit guarantee a couple of years ago and their version of the FDIC isn't fully funded yet. Also no one here worries about possibly losing their currency. Think about how screwed up it is for a bank or even an average citizen with money in a bank. What happens if Greece gets booted from the Eurozone? Is your money going to be ok? Will it be converted to some new currency? What will the exchange rate be? Will your deposits lose value overnight because a new currency would probably depreciate instantly? No one worries about stuff like this in the US. Our currency isn't changing. That's why a Greek exit will have tremendous short term costs for Greece. A currency transition like that is relatively unprecedented and no one has any answers. For Greek banks, they're going to get killed if they're forced to swap currencies. A single monetary policy without a unified fiscal policy is a horrendous idea. Europe is finally starting to acknowledge that but that is ultimately the biggest problem.
This is basically parroting Paul Krugman's decades-long argument about the euro, chapter and verse. And it's largely correct. Guess this makes you a super left wing asslicker, (with a *Global* Executive MBA, of course...)
How odd! When I first pulled it up, I read it without a paywall. When I try to do it now, it requires that. And I didn't even noticed I pasted that little "please use the link" part of it. Sorry about that! I'll see if I can find another - but summary is that Hollande in France may be working behind the scenes to help Greece get a better deal. There's so much conflicting info that it's hard to really say for sure. My best guess is that Europe comes to terms on Bailout #3 this weekend that are better terms than Greece was getting last week, but we'll see. No idea if it will be a package sufficient to solve the issue long term, but it might delay it another few years at least.
Best trick is to google it and click on the first link. http://lmgtfy.com/?q=François+Hollande+seeks+to+play+role+of+Greece’s+saviour Funny thing is that I'm not even ****ting you Dot com austerity ftw.
