7 ms·

Very good article. The industry-government nexus in Germany is indeed super powerful and underrated: other countries call it corruption, in Germany is called co

by kome 9y ago

Very good article. The industry-government nexus in Germany is indeed super powerful and underrated: other countries call it corruption, in Germany is called corporatism. In the last few years we saw it in action, with important repercussion on the global level: for example, the way the Greek crisis was managed it had to do much more with the safety of German banks, that with the welfare of Greece (https://www.esmt.org/pub/where-did-greek-bailout-money-go https://www.esmt.org/pub/where-did-greek-bailout-money-go).

lispm 9y ago
Without European (and incl. German) money Greece would be bancrupt and no longer in the Eurozone. Bancrupt banks in Europe would have helped no one, particularly not Greece. For the welfare of the people in Greece the greek government is responsible, not Angela Merkel.
- isolli 9y ago
  The better solution was to let Greece default. Then the banks who had bought Greek bonds without proper due diligence would have borne the cost of their mistakes, not innocent bystanders. These were mostly French and German banks, and it would have been up to their respective governments to bail them out (or not).
- sgift 9y ago
  > For the welfare of the people in Greece the greek government is responsible, not Angela Merkel. That is correct, but one could ask that people don't go around and say "Germany saved Greece!", cause no .. it didn't. It saved its banks.
  - lispm 9y ago
    There is a lot of propaganda involved. Sure Greek politicians did not blame themselves for taking huge amount of credit money and wasting it. Without paying back the money (-> to the banks), Greece would have been bancrupt within days. Thus saving the banks saved Greece from being bancrupt. Without banks and without government money from the outside, nobody would have given Greece any credits...
    - StavrosK 9y ago
      I don't know if you've been to Greece recently, but, at this point, a one-off bankruptcy looks much preferable to this slow and constant descent into poverty.
    - ahartmetz 9y ago
      The thing is, the Greek system mostly worked, corruption and waste and all, before it entered the Euro area. Cheap credit and no possibility of currency devaluation broke it. The currency union was just very badly thought out. A currency union without a fiscal union is probably a bad idea. That was recognized somewhat by the stability criteria for new members that were then swiftly ignored for various reasons.
      - lispm 9y ago
        > the Greek system mostly worked That's highly debatable and in a changing political landscape there was no future for that. A tiny country next to the EU and a large Eurozone? Greece needed reforms and some (not all) of them were long delayed. That's also the point of the EU and the Eurozone. It provides the framework for the reforms. The largest win for Greece is a stable democracy, after a long phase of political instability and military governments.
        Deadolus 9y ago
        Not saying that it would have worked - but there is actually a tiny, tiny country surrounded by the Eurozone - Switzerland. And while surely not everything is perfect there, I think they are doing quite well.
  - readittwice 9y ago
    Saving some affected banks would've been cheaper than saving Greece. Even if "saving german banks" might have been one of the reason, it wasn't THE reason as you claim.
- sjwright 9y ago
  Without being tied to the common currency, the Greek Drachma would have devalued relative to the Deutsche Mark, making Greek exports and tourism more lucrative. Had this been able to occur, the impact to the Greek economy would have been far less. Instead, the common currency has greatly benefited Germany: had the Germans retained the Deutsche Mark, their currency would be valued higher than the Euro is now, making their exports more expensive and/or lowering the profits of export industries.
  - lispm 9y ago
    Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians. Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.
    - readittwice 9y ago
      > Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
      - lispm 9y ago
        It could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
    - petre 9y ago
      > Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.
- petre 9y ago
  Greece would have been perfectly fine without the Euro. It is the Euro, Goldman and Sachs, Greek politicians and Deutche Bank that have bankrupted it.
- eurozone 9y ago
  To add to discussion: Greece GDP growth is less than 0% from 2006 to 2016. The map data is here https://www.reddit.com/r/europe/comments/70mf7u/european_gdp_growth_between_2006_and_2016_xpost/ https://www.reddit.com/r/europe/comments/70mf7u/european_gdp...
- zurn 9y ago
  The bankruptcy scenario was always highly unlikely, the banks would have been bailed out with tax money. Just like they were bailed out with tax money in actual history, just with another name (loans to the Greek government, who gave the money back to the unwisely lending EU banks).
- madshiva 9y ago
  Greece had many problem to solve. It's why they collapse. Not only about the Euro but about the organization, culture of doing nothing. I'm a bit bad with them but when you don't have any register of the real estate and just need to pretend that you own the land for whatever reason, should not be surprised that the country is falling...and this is just the tip of the iceberg.
ringaroundthetx 9y ago
> other countries call it corruption, in Germany is called corporatism I notice this world wide I ask government officials for "expedited processing" with IRL emphasis and air quotes when I want something done faster, some times it could be construed as a kick back, other times the legislature had already voted for that where I must congratulate them for their keen recognition of revenue streams. I don't consider due process as the qualifier of non-corruption. I don't actually care. I just wish more people would accept the relative morality of the institutions they comply with.
guitarbill 9y ago
> other countries call it corruption, in Germany is called corporatism. That's insulting, and factually inaccurate - unless you have evidence to substantiate this hyperbole? > for example, the way the Greek crisis was managed The Greek crisis had other origins, and the financial checks/obligations upon joining the Euro are supposed to mitigate against the risk of not being able to devalue a national currency to e.g. boost tourism or exports. Too bad the Greek financial records may have not been completely accurate. While Germany has benefited from the Euro, so have other countries. And it wasn't/isn't without downsides for Germany, either. I distinctly remember when the Euro was introduced, everything became far more expensive than the Deutschmark prices had been. I think we can agree on that the economy is very much globally connected, and that a recession is going to have wide-spread effects. And that austerity doesn't work, and shows that best case, economists and bankers don't know what they're doing, or worst case know exactly what they're doing. However, equating the actions/stance of one nations banks to that nation's people is a leap too far.
- LoSboccacc 9y ago
  > The Greek crisis had other origins, and the financial checks/obligations upon joining the Euro are supposed to mitigate against the risk of not being able to devalue a national currency to e.g. boost tourism or exports. Too bad the Greek financial records may have not been completely accurate. Guess who pushed hard and voiched for greece joining the euro?
  - MagnumOpus 9y ago
    That would be Valerie Giscard-d'Estaing who twisted arms to get Greece into the EEC and Mitterrand who forced through the Euro. If you are trying to insinuate that this was a German plot, you couldn't be farther from the truth. The Deutsche Mark was a sacred cow and getting rid of it in favour of a common currency with "irresponsible countries" with weak currencies was deeply unpopular even with internationalists like Kohl. Only France threatening to block German reunification unless they drop the Mark, in 1990, got German politicians to agree to giving up their currency.
- FabHK 9y ago
Boothroid 9y ago
Very good article in your opinion.

by kome 9y ago

lispm 9y ago

Without European (and incl. German) money Greece would be bancrupt and no longer in the Eurozone. Bancrupt banks in Europe would have helped no one, particularly not Greece. For the welfare of the people in Greece the greek government is responsible, not Angela Merkel.

isolli 9y ago
The better solution was to let Greece default. Then the banks who had bought Greek bonds without proper due diligence would have borne the cost of their mistakes, not innocent bystanders. These were mostly French and German banks, and it would have been up to their respective governments to bail them out (or not).
sgift 9y ago
> For the welfare of the people in Greece the greek government is responsible, not Angela Merkel. That is correct, but one could ask that people don't go around and say "Germany saved Greece!", cause no .. it didn't. It saved its banks.
- lispm 9y ago
  There is a lot of propaganda involved. Sure Greek politicians did not blame themselves for taking huge amount of credit money and wasting it. Without paying back the money (-> to the banks), Greece would have been bancrupt within days. Thus saving the banks saved Greece from being bancrupt. Without banks and without government money from the outside, nobody would have given Greece any credits...
  - StavrosK 9y ago
    I don't know if you've been to Greece recently, but, at this point, a one-off bankruptcy looks much preferable to this slow and constant descent into poverty.
  - ahartmetz 9y ago
    The thing is, the Greek system mostly worked, corruption and waste and all, before it entered the Euro area. Cheap credit and no possibility of currency devaluation broke it. The currency union was just very badly thought out. A currency union without a fiscal union is probably a bad idea. That was recognized somewhat by the stability criteria for new members that were then swiftly ignored for various reasons.
    - lispm 9y ago
      > the Greek system mostly worked That's highly debatable and in a changing political landscape there was no future for that. A tiny country next to the EU and a large Eurozone? Greece needed reforms and some (not all) of them were long delayed. That's also the point of the EU and the Eurozone. It provides the framework for the reforms. The largest win for Greece is a stable democracy, after a long phase of political instability and military governments.
      - Deadolus 9y ago
        Not saying that it would have worked - but there is actually a tiny, tiny country surrounded by the Eurozone - Switzerland. And while surely not everything is perfect there, I think they are doing quite well.
- readittwice 9y ago
  Saving some affected banks would've been cheaper than saving Greece. Even if "saving german banks" might have been one of the reason, it wasn't THE reason as you claim.
sjwright 9y ago
Without being tied to the common currency, the Greek Drachma would have devalued relative to the Deutsche Mark, making Greek exports and tourism more lucrative. Had this been able to occur, the impact to the Greek economy would have been far less. Instead, the common currency has greatly benefited Germany: had the Germans retained the Deutsche Mark, their currency would be valued higher than the Euro is now, making their exports more expensive and/or lowering the profits of export industries.
- lispm 9y ago
  Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians. Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.
  - readittwice 9y ago
    > Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
    - lispm 9y ago
      It could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
  - petre 9y ago
    > Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.
petre 9y ago
Greece would have been perfectly fine without the Euro. It is the Euro, Goldman and Sachs, Greek politicians and Deutche Bank that have bankrupted it.
eurozone 9y ago
To add to discussion: Greece GDP growth is less than 0% from 2006 to 2016. The map data is here https://www.reddit.com/r/europe/comments/70mf7u/european_gdp_growth_between_2006_and_2016_xpost/ https://www.reddit.com/r/europe/comments/70mf7u/european_gdp...
zurn 9y ago
The bankruptcy scenario was always highly unlikely, the banks would have been bailed out with tax money. Just like they were bailed out with tax money in actual history, just with another name (loans to the Greek government, who gave the money back to the unwisely lending EU banks).
madshiva 9y ago
Greece had many problem to solve. It's why they collapse. Not only about the Euro but about the organization, culture of doing nothing. I'm a bit bad with them but when you don't have any register of the real estate and just need to pretend that you own the land for whatever reason, should not be surprised that the country is falling...and this is just the tip of the iceberg.

ringaroundthetx 9y ago

> other countries call it corruption, in Germany is called corporatism I notice this world wide I ask government officials for "expedited processing" with IRL emphasis and air quotes when I want something done faster, some times it could be construed as a kick back, other times the legislature had already voted for that where I must congratulate them for their keen recognition of revenue streams. I don't consider due process as the qualifier of non-corruption. I don't actually care. I just wish more people would accept the relative morality of the institutions they comply with.

guitarbill 9y ago

> other countries call it corruption, in Germany is called corporatism. That's insulting, and factually inaccurate - unless you have evidence to substantiate this hyperbole? > for example, the way the Greek crisis was managed The Greek crisis had other origins, and the financial checks/obligations upon joining the Euro are supposed to mitigate against the risk of not being able to devalue a national currency to e.g. boost tourism or exports. Too bad the Greek financial records may have not been completely accurate. While Germany has benefited from the Euro, so have other countries. And it wasn't/isn't without downsides for Germany, either. I distinctly remember when the Euro was introduced, everything became far more expensive than the Deutschmark prices had been. I think we can agree on that the economy is very much globally connected, and that a recession is going to have wide-spread effects. And that austerity doesn't work, and shows that best case, economists and bankers don't know what they're doing, or worst case know exactly what they're doing. However, equating the actions/stance of one nations banks to that nation's people is a leap too far.

LoSboccacc 9y ago
> The Greek crisis had other origins, and the financial checks/obligations upon joining the Euro are supposed to mitigate against the risk of not being able to devalue a national currency to e.g. boost tourism or exports. Too bad the Greek financial records may have not been completely accurate. Guess who pushed hard and voiched for greece joining the euro?
- MagnumOpus 9y ago
  That would be Valerie Giscard-d'Estaing who twisted arms to get Greece into the EEC and Mitterrand who forced through the Euro. If you are trying to insinuate that this was a German plot, you couldn't be farther from the truth. The Deutsche Mark was a sacred cow and getting rid of it in favour of a common currency with "irresponsible countries" with weak currencies was deeply unpopular even with internationalists like Kohl. Only France threatening to block German reunification unless they drop the Mark, in 1990, got German politicians to agree to giving up their currency.
FabHK 9y ago

Boothroid 9y ago

Very good article in your opinion.