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Considering that the youth unemployment rates there correlate with policies that didn't just involve "tightening" the belt but arguably cutting off all circulat

Considering that the youth unemployment rates there correlate with policies that didn't just involve "tightening" the belt but arguably cutting off all circulation, you might want to re-think that. (much of Europe has been victimized by the cult of "austerity", and several countries have probably lost an entire generation's productivity thanks to these policies)

nopriorarrests 8y ago
>much of Europe has been victimized by the cult of "austerity" What cult? Capital markets decided that Greece is too risky to lend money to at reasonable rate. Same happened with Spain and Italy, but they were saved by European Central Bank which became a lender of last resort and bought plenty of their bonds, driving interest rate lower. It's not like Italy and Spain can easily tap capital markets borrowing trillions of euros at 1% interest rate, but decided not to do so because of 'cult of austerity'.
- grey-area 8y ago
  The ECB has printed €2.4 trillion since 2015 and very little of that has gone to Greece, Italy or Spain. The tap was turned off for Greece by the EU when they refused to help them with debt (mostly owed to German banks) - this was a political decision, as was that to impose stringent austerity on Greece, on people who could not afford it (pensioners etc). It didn't have to happen that way, it was a deliberate choice. This had nothing to do with free markets (which really are not very free, they are massively impacted by central bank actions).
  - nopriorarrests 8y ago
    >It didn't have to happen that way, it was a deliberate choice. What was the other choice? ECB printing money and lending it to Greece fully knowing it will be never paid back?
    - Devils_Avocado 8y ago
      The other choice was to let the Greek govt default on its debts; there're almost 300billion reasons why Germany & France didn't want to do that...
      - nopriorarrests 8y ago
        Nothing stops Greek government from defaulting. Just miss your next coupon payment, and viola. But once you default, you have to balance your budget, because nobody will lend to you, and until 2017 Greece were running a deficit. Default would cause even more pain than so much hated austerity.
        Devils_Avocado 8y ago
        Nope. They already tried that, the troika rushed in to stop even the suggestion of that being a possibility.
  - raverbashing 8y ago
    > to impose stringent austerity on Greece, on people who could not afford it (pensioners etc) So, if they can't afford austerity what makes you think they will repay debts in the future? "Pensioners" yes, usually from an inflated public sector. Untouchables. Who pays the price? The youth What about passing needed reforms? LOL, of course not, that will hurt the inflated public sector and their pensioners, never mind no one wants to invest there anymore. And the worse thing is, if you turn the tap on, you'll probably get the lovely results of "Abenomics", that is, people investing in BS like (existing or low demand) real estate or on non efficiency improving activities (like buying old computer parts for old systems) Before the "evil" ECB that lends with few guarantees those countries were paying the real cost of their debts (incl. currency devaluation) But then it was "Evil Germany" that could borrow with low interest rates while they had to pay high rates.
    - grey-area 8y ago
      There are no easy solutions here, but it's simplistic and wrong (morally and objectively) to claim that the people of Greece deserve the destitution imposed by the EU. I say this as a supporter of the EU project who thinks this was a very dangerous and counterproductive move for the EU. Did the cleaners at the finance ministry deserve to be fired because of arbitrary austerity? Does a grandmother in Athens who worked and paid into a pension all her life deserve a cut in her pension from €1300 to €600 a month? Does the widow of ansailor deserve cuts from €1900 to €650 a month because of a financial crisis far away? These are real and serious questions. The worst part of this policy of austerity is that the only thing it is useful for is imposing subjugation on the politicians of Greece, it makes Greece unable to pay for its obligations and unable to recover from them. I agree Greece needs reform, needs to collect more tax, needs more jobs and industry, but pro-cyclical austerity is not the answer for anyone including the debtors of Greece. This shouldn't be about winners and losers, and fairy tales about evil Germany or corrupt, feckless Greece - it should be about getting Greece back on its feet so it can contribute. The same way the EU helped Spain after Franco or Ireland after the troubles.
      - raverbashing 8y ago
        > to claim that the people of Greece deserve the destitution imposed by the EU Destitution was not "imposed" to them. While I agree there are issues with the Euro zone/lack of a fiscal union, the end problem is lack of money going in. That shows up as austerity in this case BUT would have shown up as devaluations/debt/inflation in other cases. Coming from a 3rd world country I can say I have experience in this unfortunately (then the "evil guys" are the IMF, etc). > Did the cleaners at the finance ministry deserve to be fired because of arbitrary austerity? Does a grandmother in Athens who worked and paid into a pension all her life deserve a cut in her pension from €1300 to €600 a month? Does the widow of ansailor deserve cuts from €1900 to €650 a month because of a financial crisis far away? It's not "fair", and some of those issues are just a fundamental lack of jobs/work (same thing happens anywhere) but the issue is not with them. However it's easier to cut salaries/earnings of those people in your example while keeping the privileges of the higher levels. (See for example faculty/administration wage gap in American universities) > it should be about getting Greece back on its feet so it can contribute. The same way the EU helped Spain after Franco or Ireland after the troubles. Agreed, and austerity is not good in itself, it's more like making a fat person starve (which sucks and everybody hates) instead of making them eat better and exercise more (but if they don't do it themselves, then what).
em500 8y ago
"Victimized by 'austerity'" is heavily overplayed. Even with 'austerity' policies, government spending in Greece is still around 50% of national income. Neither their own citizens (via taxes) nor foreigners (via lending) are willing to finance such spending, so what alternatives to decreasing spending would you suggest?
- atoav 8y ago
  Isn't it weird how austerity often targets the poor, while e.g. salaries of bureaucrats or politicians, as well as military and police spending are rarely part of these strategies. One can discuss about austerity as an effective strategy to slim-fit a nation. Making the government and public processes more effective, streamlined and effective, using less manpower to reach the same goal and increasing the efficency, speed and simplicity at the same time – this is a good goal. BUT this is definitly not what usually happens when governments say they need to save money, because those who know how to make the processes more efficient usually don't like to cut their own jobs/salaries/responsibilities. So they just cut some public service that affects nobody meaning-/powerful instead and sell it as a big reform.

nopriorarrests 8y ago

>much of Europe has been victimized by the cult of "austerity" What cult? Capital markets decided that Greece is too risky to lend money to at reasonable rate. Same happened with Spain and Italy, but they were saved by European Central Bank which became a lender of last resort and bought plenty of their bonds, driving interest rate lower. It's not like Italy and Spain can easily tap capital markets borrowing trillions of euros at 1% interest rate, but decided not to do so because of 'cult of austerity'.

grey-area 8y ago
The ECB has printed €2.4 trillion since 2015 and very little of that has gone to Greece, Italy or Spain. The tap was turned off for Greece by the EU when they refused to help them with debt (mostly owed to German banks) - this was a political decision, as was that to impose stringent austerity on Greece, on people who could not afford it (pensioners etc). It didn't have to happen that way, it was a deliberate choice. This had nothing to do with free markets (which really are not very free, they are massively impacted by central bank actions).
- nopriorarrests 8y ago
  >It didn't have to happen that way, it was a deliberate choice. What was the other choice? ECB printing money and lending it to Greece fully knowing it will be never paid back?
  - Devils_Avocado 8y ago
    The other choice was to let the Greek govt default on its debts; there're almost 300billion reasons why Germany & France didn't want to do that...
    - nopriorarrests 8y ago
      Nothing stops Greek government from defaulting. Just miss your next coupon payment, and viola. But once you default, you have to balance your budget, because nobody will lend to you, and until 2017 Greece were running a deficit. Default would cause even more pain than so much hated austerity.
      - Devils_Avocado 8y ago
        Nope. They already tried that, the troika rushed in to stop even the suggestion of that being a possibility.
- raverbashing 8y ago
  > to impose stringent austerity on Greece, on people who could not afford it (pensioners etc) So, if they can't afford austerity what makes you think they will repay debts in the future? "Pensioners" yes, usually from an inflated public sector. Untouchables. Who pays the price? The youth What about passing needed reforms? LOL, of course not, that will hurt the inflated public sector and their pensioners, never mind no one wants to invest there anymore. And the worse thing is, if you turn the tap on, you'll probably get the lovely results of "Abenomics", that is, people investing in BS like (existing or low demand) real estate or on non efficiency improving activities (like buying old computer parts for old systems) Before the "evil" ECB that lends with few guarantees those countries were paying the real cost of their debts (incl. currency devaluation) But then it was "Evil Germany" that could borrow with low interest rates while they had to pay high rates.
  - grey-area 8y ago
    There are no easy solutions here, but it's simplistic and wrong (morally and objectively) to claim that the people of Greece deserve the destitution imposed by the EU. I say this as a supporter of the EU project who thinks this was a very dangerous and counterproductive move for the EU. Did the cleaners at the finance ministry deserve to be fired because of arbitrary austerity? Does a grandmother in Athens who worked and paid into a pension all her life deserve a cut in her pension from €1300 to €600 a month? Does the widow of ansailor deserve cuts from €1900 to €650 a month because of a financial crisis far away? These are real and serious questions. The worst part of this policy of austerity is that the only thing it is useful for is imposing subjugation on the politicians of Greece, it makes Greece unable to pay for its obligations and unable to recover from them. I agree Greece needs reform, needs to collect more tax, needs more jobs and industry, but pro-cyclical austerity is not the answer for anyone including the debtors of Greece. This shouldn't be about winners and losers, and fairy tales about evil Germany or corrupt, feckless Greece - it should be about getting Greece back on its feet so it can contribute. The same way the EU helped Spain after Franco or Ireland after the troubles.
    - raverbashing 8y ago
      > to claim that the people of Greece deserve the destitution imposed by the EU Destitution was not "imposed" to them. While I agree there are issues with the Euro zone/lack of a fiscal union, the end problem is lack of money going in. That shows up as austerity in this case BUT would have shown up as devaluations/debt/inflation in other cases. Coming from a 3rd world country I can say I have experience in this unfortunately (then the "evil guys" are the IMF, etc). > Did the cleaners at the finance ministry deserve to be fired because of arbitrary austerity? Does a grandmother in Athens who worked and paid into a pension all her life deserve a cut in her pension from €1300 to €600 a month? Does the widow of ansailor deserve cuts from €1900 to €650 a month because of a financial crisis far away? It's not "fair", and some of those issues are just a fundamental lack of jobs/work (same thing happens anywhere) but the issue is not with them. However it's easier to cut salaries/earnings of those people in your example while keeping the privileges of the higher levels. (See for example faculty/administration wage gap in American universities) > it should be about getting Greece back on its feet so it can contribute. The same way the EU helped Spain after Franco or Ireland after the troubles. Agreed, and austerity is not good in itself, it's more like making a fat person starve (which sucks and everybody hates) instead of making them eat better and exercise more (but if they don't do it themselves, then what).

em500 8y ago

"Victimized by 'austerity'" is heavily overplayed. Even with 'austerity' policies, government spending in Greece is still around 50% of national income. Neither their own citizens (via taxes) nor foreigners (via lending) are willing to finance such spending, so what alternatives to decreasing spending would you suggest?

atoav 8y ago
Isn't it weird how austerity often targets the poor, while e.g. salaries of bureaucrats or politicians, as well as military and police spending are rarely part of these strategies. One can discuss about austerity as an effective strategy to slim-fit a nation. Making the government and public processes more effective, streamlined and effective, using less manpower to reach the same goal and increasing the efficency, speed and simplicity at the same time – this is a good goal. BUT this is definitly not what usually happens when governments say they need to save money, because those who know how to make the processes more efficient usually don't like to cut their own jobs/salaries/responsibilities. So they just cut some public service that affects nobody meaning-/powerful instead and sell it as a big reform.