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Nonsense and victim blaming. Please look at who got what votes in the ECB board, and look who voted how. Also please check who had lent Greece the most. As far

Nonsense and victim blaming. Please look at who got what votes in the ECB board, and look who voted how. Also please check who had lent Greece the most. As far as I'm aware that was French banks. Next please take into account that the Euro was forced onto Germany. Then please realise that nobody forced Greece to take on these loans (and then use them to subsidise cushy government jobs). Finally please realise the Germany has a trade surplus because they produce goods that are internationally competitive.

justincormack 12y ago
You cant have a trade surplus just by having great goods. People need money to buy them. The Germans lent them the money, with no means for it to be paid back.
- vacri 12y ago
  So you're saying that without Germany, Europe has no economy? The answer to this problem is for the public to demand stronger financial regulations from their own government. The problems facing you (rhetorical 'you') are mostly due to corruption in your own government - they're the ones taking crappy loans. So what if you blame one other country. Cut all ties with them... and the corruption in your own government will find some other way to spend your money on their personal baubles.
  - drumdance 12y ago
    Germany was basically financing their exports. It's as if GM offered great terms to all comers regardless of creditworthiness, then complains when the buyers can't make the payments.
    - NotableAlamode 12y ago
      Victim blaming. The Euro, and it's easy credit was forced upon Germany by France as a price for reunification. Several German members of the Executive Board and the Governing Council of the European Central Bank (ECB), and one German head of state resigned in protest against the insane monetary policies that the southern European states voted for.
      - NotableAlamode 12y ago
        Why the downvotes? What I state above is historically well documented. I'd also like to remind the readers that Germany is still an occupied country and cannot make decisions about the Euro according to its own needs and wants.
  - tsotha 12y ago
    >The problems facing you (rhetorical 'you') are mostly due to corruption in your own government... If that were the problem the solution would be fairly straightforward. But it's not corruption that broke the bank. Greece simply isn't wealthy enough to provide the level of services to which the citizens have become accustomed. That's why there's no way out here. The voters will not allow the changes that need to happen for the country to become solvent. After they stiff the Germans and after they leave the euro the people in charge will bring some sanity to the budget by printing Drachma (or whatever the new money is called) until consumption is brought roughly in line with production.
- NotableAlamode 12y ago
  Are you kidding? Credit can be used productively, for example by investing in new transport infrastructure, new factoris, better education and the like. Greece did none of those and subsidised the lifestyle of its public servants.
atmosx 12y ago
Hm, if Greece defaults, probably Italy and Spain will follow soon after. At that point the EU will be dissolved and Germany (probably along with the Dutch and few others) might create a new "Union" with a very strong currency. At that point the countries of the South (and North? Ireland..?) will keep devaluing daily, while the markets will push Germany's new currency through the roof, turning exports virtually impossible. Unemployment will struck Germany and all hell will broke loose. Repercussions for the South will be devastating of course. That's not my preview. That's the scenario Varoufakis foresees and probably the author too. Makes a lot of sense to me, but Varoufakis might be wrong. Time will tell I guess. Just keep in mind that Greece, Italy and Spain are in dire straits anyway so the prospect of defaulting doesn't seem all that scary.
- crdoconnor 12y ago
  That sounds mostly accurate, but I still think Germany would try and push down the value of its currency to subsidize its exports. They have a long history of doing that.
  - atmosx 12y ago
    Of course the government will try to somehow undervalue the new currency (probably by printing more - although historically German central bankers and Governments are not flexible like the Swiss for example), however doesn't depend on them. If everyone in Europe and abroad wants to park their assets in the new stable DeutscheMark, that alone could destroy exports. In the meantime everybody around (current markets of German products) will becoming a weak buyer.
- NotableAlamode 12y ago
  Are you kidding? You make it sound like Greece is doing everybody a favour by wasting EU money. Germany used to have its own currency and did very well exporting its goods. So does Japan, so does Singapore, so does Switzerland, so do Denmark and the US.
  - coldtea 12y ago
vegabook 12y ago
Absolute nonsense indeed - in your own comment. Germany never had the euro "forced" upon it. If you recall it was called the "écu", until Germany called it the euro. Germany has benefited by far the most from euro in the sense that it has erased the serial competitive devaluations which have been a feature of non-German monetary policy for the past 100 years. It was agreed bilaterally by Mitterand and Kohl and forced upon the rest of Europe. By maintaining a strong currency for its customer countries, Germany has, in fully aware and calculated fashion, created purchasing power for its goods. By creating purchasing power for its goods, it has locked in its own competitive advantage, allowing more investment and consolidating its industries' lead over European competitors. The anecdotal evidence bears this out completely: witness Volkswagen's completely domination compared with the healthy competition from PSA, Fiat Group, Renault, or indeed Rover 20 years ago. "Nobody forced Greece to take on the loans". Classic simplistic, moralising, yet false axiom, and is the entire theme of the article which you clearly have not read, or understood, properly. The point of the article is that thrusting large amounts of money in front of the nose of a potential debtor is bound to create a debt, but under such circumstances that debt, when it turns bad, does not lay blame 100% at the door of the borrower. The irresponsible creditor must also take a share of the pain. That is what is Syriza's underlying point, and is mirrored across peripheral europe, and any idea that Germany (or French banks) must at all costs get 100c return on each euro of capital invested is completely erroneous. The periphery must take some pain, yes, but the usurious and/or opportunistic lender must also be punished.
- NotableAlamode 12y ago
  Are you kidding? PSA, Fiat Group, and Renault also had the Euro and hence should be benefiting from exactly the same enlarged market that you claim is the reason for Volkswagen's success. As to "lay[ing] blame 100% at the door of the borrower", my point is that the money that has been given to Greece is already gone, Greece has been technically bankrupt for a while. This is understood by everybody. The questions are twofold: 1. How do the creditor countries tell their electorate that the money's gone? The modus operandi of the creditor countries has been to drag out the default over time. 2. What to do with Greece. The creditor countries want to change Greece to make it competitive. Syriza wants to keep the rest of the EU to subsidise the status quo indefinitely. I disagree that "Germany has benefited by far the most from euro". The opposite is true. Moreover Kohl agreed with it only because without that agreement, reunification would have been vetoed by France, which is still in some sense, occupying Germany. Nobody orced upon the Euro the rest of Europe. Various EU countries (e.g UK, Poland, Denmark, Sweden) did not join.
sgift 12y ago
> As far as I'm aware that was French banks. https://web.archive.org/web/20141112144203/http://www.businessweek.com/news/2011-06-06/german-banks-top-french-on-23-billion-greek-debt-bis-says.html https://web.archive.org/web/20141112144203/http://www.busine...
kaonashi 12y ago
Please realize that mathematically, any grouping of countries sharing a single currency will have some members that export more and some that import more. Is it fair to force the countries importing more into idleness and destitution for no more reason than they share that currency? If you look at the U.S., states like Alabama and Mississippi receive more in federal dollars than they pay out, where the more productive states like California are the opposite. The ecu lacks this facility.
- NotableAlamode 12y ago
  Are you kidding? Greece has already received billions and billions of subsidies / gifts from the norther EU countries. Is that fair? Greece has not used that money to improve its economy.
  - atmosx 12y ago
    Nope it didn't. That's as much Greeces fault though as it is the EUs. It's not like the EU didn't knew what was happening. I'm not saying that Greece isn't to blame. Of course it is. But it's not a one-sided situation. Takes two to tango on one hand. On a more important note, all the money from the bail-outs where driven to French and German banks, while Greece kept borrowing. So the plan was not exactly to save Greece, it was mostly to save French and German banks...
    - NotableAlamode 12y ago
      This is nonsense. Of course the plan is to save Greece by turning it into a productive, normal European state, so it can eventually pay back the money that was lent to it. However, this is unlikely, and it is also important to avoid a contagion via bank defaults, when Greece's debt will finally be written of -- of course everybody knows that Greece is bankrupt.
  - coldtea 12y ago
    The "subsidies/gifts" given to Greece were accompanied with instructions for not competing in traditional markets Greece played in, for changes in agricultural policies that lead to the destruction of agricultural exports, and de-industrialization. The big players of Europe, mostly Germany, used the EU "subsidies" to ensure an economic policy that destroys the periphery (and makes it a short-term market for their industry) would be followed. Just an example of similar BS continuing to this day: Germany pushes for embargo against Russia for example, which Greece follows (hampering tons of exports it had) but German companies do not (it is estimated by German sources that 80% of companies continue to do business as usual with Russia). Essentially Germany faking a moral outrage against Russia to push for its economic interests. There are some crucial differences between Germany and Greece however: 1) Greece didn't cause the death of nearly one million Germans, due to invasion, executions, and famine. Germany did. 2) Greece didn't bomb German cities. Germany did (Greek ones). 3) Greece didn't destroy Germany's infrastructure when its army left the country (out of spite). Germany did. 4) Greece didn't force Germany while being an occyping power to give it a huge loan it never repaid. 5) Greece never denied to pay war recuperations to Germany. Germany did to Greece. 6) A couple of decades after Germany slaughtered it's citizens, Greece did send hundrends of thousands of workers to work in retructuring the German economy as cheap immigrant workers (gestarbaiters). Strange how those "lazy Greeks" (and Turks) created this "German recovery miracle"). 7) Greece didn't force EU legislation and economic/monetary policy to favour its exports and industry. Germany did. 8) Greece wasn't caught bribing German politicians millions or Euroes in order to close certain deals against the Greek state's interests. Germany did. And then it offered protection to people involved in the bribes. In general, when you have a 100-pound gorilla pursuing its interests against a monkey, it's rarely the monkey's influence that determined most outcomes...

justincormack 12y ago

You cant have a trade surplus just by having great goods. People need money to buy them. The Germans lent them the money, with no means for it to be paid back.

vacri 12y ago
So you're saying that without Germany, Europe has no economy? The answer to this problem is for the public to demand stronger financial regulations from their own government. The problems facing you (rhetorical 'you') are mostly due to corruption in your own government - they're the ones taking crappy loans. So what if you blame one other country. Cut all ties with them... and the corruption in your own government will find some other way to spend your money on their personal baubles.
- drumdance 12y ago
  Germany was basically financing their exports. It's as if GM offered great terms to all comers regardless of creditworthiness, then complains when the buyers can't make the payments.
  - NotableAlamode 12y ago
    Victim blaming. The Euro, and it's easy credit was forced upon Germany by France as a price for reunification. Several German members of the Executive Board and the Governing Council of the European Central Bank (ECB), and one German head of state resigned in protest against the insane monetary policies that the southern European states voted for.
    - NotableAlamode 12y ago
      Why the downvotes? What I state above is historically well documented. I'd also like to remind the readers that Germany is still an occupied country and cannot make decisions about the Euro according to its own needs and wants.
- tsotha 12y ago
  >The problems facing you (rhetorical 'you') are mostly due to corruption in your own government... If that were the problem the solution would be fairly straightforward. But it's not corruption that broke the bank. Greece simply isn't wealthy enough to provide the level of services to which the citizens have become accustomed. That's why there's no way out here. The voters will not allow the changes that need to happen for the country to become solvent. After they stiff the Germans and after they leave the euro the people in charge will bring some sanity to the budget by printing Drachma (or whatever the new money is called) until consumption is brought roughly in line with production.
NotableAlamode 12y ago
Are you kidding? Credit can be used productively, for example by investing in new transport infrastructure, new factoris, better education and the like. Greece did none of those and subsidised the lifestyle of its public servants.

atmosx 12y ago

Hm, if Greece defaults, probably Italy and Spain will follow soon after. At that point the EU will be dissolved and Germany (probably along with the Dutch and few others) might create a new "Union" with a very strong currency. At that point the countries of the South (and North? Ireland..?) will keep devaluing daily, while the markets will push Germany's new currency through the roof, turning exports virtually impossible. Unemployment will struck Germany and all hell will broke loose. Repercussions for the South will be devastating of course. That's not my preview. That's the scenario Varoufakis foresees and probably the author too. Makes a lot of sense to me, but Varoufakis might be wrong. Time will tell I guess. Just keep in mind that Greece, Italy and Spain are in dire straits anyway so the prospect of defaulting doesn't seem all that scary.

crdoconnor 12y ago
That sounds mostly accurate, but I still think Germany would try and push down the value of its currency to subsidize its exports. They have a long history of doing that.
- atmosx 12y ago
  Of course the government will try to somehow undervalue the new currency (probably by printing more - although historically German central bankers and Governments are not flexible like the Swiss for example), however doesn't depend on them. If everyone in Europe and abroad wants to park their assets in the new stable DeutscheMark, that alone could destroy exports. In the meantime everybody around (current markets of German products) will becoming a weak buyer.
NotableAlamode 12y ago
Are you kidding? You make it sound like Greece is doing everybody a favour by wasting EU money. Germany used to have its own currency and did very well exporting its goods. So does Japan, so does Singapore, so does Switzerland, so do Denmark and the US.
- coldtea 12y ago

vegabook 12y ago

Absolute nonsense indeed - in your own comment. Germany never had the euro "forced" upon it. If you recall it was called the "écu", until Germany called it the euro. Germany has benefited by far the most from euro in the sense that it has erased the serial competitive devaluations which have been a feature of non-German monetary policy for the past 100 years. It was agreed bilaterally by Mitterand and Kohl and forced upon the rest of Europe. By maintaining a strong currency for its customer countries, Germany has, in fully aware and calculated fashion, created purchasing power for its goods. By creating purchasing power for its goods, it has locked in its own competitive advantage, allowing more investment and consolidating its industries' lead over European competitors. The anecdotal evidence bears this out completely: witness Volkswagen's completely domination compared with the healthy competition from PSA, Fiat Group, Renault, or indeed Rover 20 years ago. "Nobody forced Greece to take on the loans". Classic simplistic, moralising, yet false axiom, and is the entire theme of the article which you clearly have not read, or understood, properly. The point of the article is that thrusting large amounts of money in front of the nose of a potential debtor is bound to create a debt, but under such circumstances that debt, when it turns bad, does not lay blame 100% at the door of the borrower. The irresponsible creditor must also take a share of the pain. That is what is Syriza's underlying point, and is mirrored across peripheral europe, and any idea that Germany (or French banks) must at all costs get 100c return on each euro of capital invested is completely erroneous. The periphery must take some pain, yes, but the usurious and/or opportunistic lender must also be punished.

NotableAlamode 12y ago
Are you kidding? PSA, Fiat Group, and Renault also had the Euro and hence should be benefiting from exactly the same enlarged market that you claim is the reason for Volkswagen's success. As to "lay[ing] blame 100% at the door of the borrower", my point is that the money that has been given to Greece is already gone, Greece has been technically bankrupt for a while. This is understood by everybody. The questions are twofold: 1. How do the creditor countries tell their electorate that the money's gone? The modus operandi of the creditor countries has been to drag out the default over time. 2. What to do with Greece. The creditor countries want to change Greece to make it competitive. Syriza wants to keep the rest of the EU to subsidise the status quo indefinitely. I disagree that "Germany has benefited by far the most from euro". The opposite is true. Moreover Kohl agreed with it only because without that agreement, reunification would have been vetoed by France, which is still in some sense, occupying Germany. Nobody orced upon the Euro the rest of Europe. Various EU countries (e.g UK, Poland, Denmark, Sweden) did not join.

sgift 12y ago

> As far as I'm aware that was French banks. https://web.archive.org/web/20141112144203/http://www.businessweek.com/news/2011-06-06/german-banks-top-french-on-23-billion-greek-debt-bis-says.html https://web.archive.org/web/20141112144203/http://www.busine...

kaonashi 12y ago

Please realize that mathematically, any grouping of countries sharing a single currency will have some members that export more and some that import more. Is it fair to force the countries importing more into idleness and destitution for no more reason than they share that currency? If you look at the U.S., states like Alabama and Mississippi receive more in federal dollars than they pay out, where the more productive states like California are the opposite. The ecu lacks this facility.

NotableAlamode 12y ago
Are you kidding? Greece has already received billions and billions of subsidies / gifts from the norther EU countries. Is that fair? Greece has not used that money to improve its economy.
- atmosx 12y ago
  Nope it didn't. That's as much Greeces fault though as it is the EUs. It's not like the EU didn't knew what was happening. I'm not saying that Greece isn't to blame. Of course it is. But it's not a one-sided situation. Takes two to tango on one hand. On a more important note, all the money from the bail-outs where driven to French and German banks, while Greece kept borrowing. So the plan was not exactly to save Greece, it was mostly to save French and German banks...
  - NotableAlamode 12y ago
    This is nonsense. Of course the plan is to save Greece by turning it into a productive, normal European state, so it can eventually pay back the money that was lent to it. However, this is unlikely, and it is also important to avoid a contagion via bank defaults, when Greece's debt will finally be written of -- of course everybody knows that Greece is bankrupt.
- coldtea 12y ago
  The "subsidies/gifts" given to Greece were accompanied with instructions for not competing in traditional markets Greece played in, for changes in agricultural policies that lead to the destruction of agricultural exports, and de-industrialization. The big players of Europe, mostly Germany, used the EU "subsidies" to ensure an economic policy that destroys the periphery (and makes it a short-term market for their industry) would be followed. Just an example of similar BS continuing to this day: Germany pushes for embargo against Russia for example, which Greece follows (hampering tons of exports it had) but German companies do not (it is estimated by German sources that 80% of companies continue to do business as usual with Russia). Essentially Germany faking a moral outrage against Russia to push for its economic interests. There are some crucial differences between Germany and Greece however: 1) Greece didn't cause the death of nearly one million Germans, due to invasion, executions, and famine. Germany did. 2) Greece didn't bomb German cities. Germany did (Greek ones). 3) Greece didn't destroy Germany's infrastructure when its army left the country (out of spite). Germany did. 4) Greece didn't force Germany while being an occyping power to give it a huge loan it never repaid. 5) Greece never denied to pay war recuperations to Germany. Germany did to Greece. 6) A couple of decades after Germany slaughtered it's citizens, Greece did send hundrends of thousands of workers to work in retructuring the German economy as cheap immigrant workers (gestarbaiters). Strange how those "lazy Greeks" (and Turks) created this "German recovery miracle"). 7) Greece didn't force EU legislation and economic/monetary policy to favour its exports and industry. Germany did. 8) Greece wasn't caught bribing German politicians millions or Euroes in order to close certain deals against the Greek state's interests. Germany did. And then it offered protection to people involved in the bribes. In general, when you have a 100-pound gorilla pursuing its interests against a monkey, it's rarely the monkey's influence that determined most outcomes...