11 ms·

The Greek elected confrontation. They got it.

coldtea 11y ago
No, they had one-sided confrontation, derision and bullying from the other side for several years. [1] The Greeks merely elected a government to stand up to it. [1] That side of the German stance has been thoroughly discussed even in the Economist, Bloomberg, Financial Times, NYT, etc (as well as the huge financial gains Germany got from the "assistance" they provided).
- cjensen 11y ago
  Voluntarily accepting conditions attached to a loan is not bullying, particularly as the countries giving the loan are in no way at fault for Greece's dire need for a loan.
  - hammerandtongs 11y ago
    Your moralistic tone might be appropriate in a completely simplistic loan from one villager to another villager. In the context of the very high complexity of the actual international system we have it doesn't really work or provide any explanatory power.
    - cjensen 11y ago
      Did you mean to address your comment to the original comment instead of mine? It was the grandparent comment who used the phrase "bullying" to imply immorality. My comment only claims that even if you assume morality in international lending, the particular phrase is not apt.
  - phreeza 11y ago
    'at fault' may be too strong, but Germany surely benefited in the zero-sum game that resulted from the Euro fixing exchange rates within the eurozone: in the old system, Greece could have (and did) increase the exchange rate wrt the Mark to boost exports and keep the economy running. The inability to do this benefited Germany, at the cost of Greece.
    - mafribe 11y ago
      (1) In what sense is loosing billions to Greece benefiting Germany? (2) Greece can change its exchange rate. Just declare bankruptcy and leave the Euro.
      - Nimitz14 11y ago
        (1) Germany is profiting billions from the current exchange rate, that's why it isn't losing anything. (2) Which would fuck with the EU a lot more than it would bother Greece, which is why they're making the stand that they are, they know they have less to lose. There's a reason they haven't been kicked out already. ;)
        mafribe 11y ago
        (1) I see no evidence of this. The ECB's flooding the world with Euros clearly inflates away net savers' wealth. (2) I agree that that's the game Greece has been playing. But it's perfectly compatible with what I said.
        eli_gottlieb 11y ago
        > (1) I see no evidence of this. The ECB's flooding the world with Euros clearly inflates away net savers' wealth. Germany makes its money on manufactured-goods exports, though, so an artificially cheap currency helps them.
        mafribe 11y ago
        But the artificially cheap currency comes about because savers' savings are being inflated away. Moreover it's unlikely that the money lent to Greece will ever come back. I don't see any evidence that in balance Germany benefits from this. Have you got any?
        eli_gottlieb 11y ago
        German workers trying to save lose. German capitalists making their money on exports and investing it by loaning it out win.
  - yequalsx 11y ago
    Your comment indicates that you think that in the lender/borrower relationship only one side has responsibilities. The Germans via the ECB flooded Greece, Portugal, Spain with easy money in the early 2000s. It is incorrect to say, "...in no way at fault..." Greece was bullied and has been bullied and the average Greek has suffered as a result. They are not blameless by any means but what has happened to Greece is not just.
    - mafribe 11y ago
      I'm sorry that's misleading. Germany has one vote on the ECB, the same number as Greece, Spain, Portugal, Malta and every other country. Greece was perfectly happy to get cheap money. Instead of investing it in education, improved prductivity, Greece has been wasting it on an oversized army, extremely early retirement with cushy pensions for government employees, pointless olympic games, hagiographic articles in the NY Times and so on.
      - coldtea 11y ago
        >I'm sorry that's misleading. Germany has one vote on the ECB, the same number as Greece, Spain, Portugal, Malta and every other country. Yeah, if only democracy worked outside of power plays and diplomatic and economic might... Because after all the number of votes is all that counts... >Instead of investing it in education, improved prductivity, Greece has been wasting it on an oversized army, extremely early retirement with cushy pensions for government employees, pointless olympic games, hagiographic articles in the NY Times and so on. I know. Those lazy southerners getting German money are the same kind of vermin that Jews were back in the day, right? Because what you wrote is word by word the same kind of BS propaganda repeated in German popular media, about some lazy, unproductive vermins ("PIIGS") wasting German tax-payers money. Here's some reality: http://www.washingtonpost.com/news/morning-mix/wp/2014/05/16/greeks-work-harder-than-germans-who-knew/ http://www.washingtonpost.com/news/morning-mix/wp/2014/05/16... https://euobserver.com/social/124761 https://euobserver.com/social/124761
        mafribe 11y ago
        Your incessant racism is tiring. In any case, if Greeks are so hard working, then you are actually agreeing with my point about Greece not investing the huge subsidies that they have recieved wisely into "improved prductivity". As the WaPo article you quote says: "Caveat: Long hours at the office don’t always equate to high productivity".
  - cynicalkane 11y ago
    According to the pre-2008 economic consensus on monetary policy, bad central banking is the dominant force behind recessions. This theory is in no way disproved since central banks during the Great Recession failed to act according to the theoretical recommendations. The US is back on track (kind of) with QE, and perhaps coincidentally, the US economy is doing quite a bit better than the Eurozone. The ECB, which was tasked with maintaining inflation levels and nominal expansion throughout Europe, has completely abandoned this goal to serve the (short-sighted and wrong) interests of Germany and other economic powers. If we are to believe the pre-2008 economic mainstream, it is absolutely the fault of the countries giving the loans, who swamped the Eurozone with expansionary policy then yanked it away when it was needed most. Right now it's not politically convenient to believe in those economic theories, so you don't hear much about them from politicians or mainstream press.
    - SovietDissident 11y ago
      It seems to me that if the entire Eurozone was subject to the same monetary policy by the ECB, it leaves a wonderful base for comparison. In other words, we can forget about monetary policy in our analysis and compare the relative health of other economies in the Eurozone based on their governments' fiscal policies and fundamental economic productiveness. Greece, Spain, and Portugal fail the test.
      - cynicalkane 11y ago
        The entire motivation behind monetary economics is that there doesn't exist a "baseline economy" independent of monetary policy. This was the primary argument against the Euro. Developing economies are hurt more in recessions, and benefit more from widely varying monetary policy. This is true no matter how "good" or "bad" a country is, even if the "badness" of a country was justification for economically punishing its citizens in the first place (it isn't).
  - coldtea 11y ago
    >Voluntarily accepting conditions attached to a loan is not bullying, particularly as the countries giving the loan are in no way at fault for Greece's dire need for a loan. Victims of loan-sharks, (one of the most despised kind of scum going back to the antiquity), also "voluntarily accept" the conditions attached to their loans. When you're in need, and even more in "dire need", there's a ton of leverage people have on you, which makes the "voluntarily" part quite meaningless. Not to mention that there are ways to pressure a country to not try other measures ("if you don't work this way and get this loan, and instead seek alternate courses of action we'll make sure we crush you"). E.g. "if you dare default, we'll kick you out of Eurozone" or "we'll kill your tourism industry", etc. And of course the countries deciding the load, namely Germany which acts as E.U's big boss, are very much at fault for Greece's dire need for a loan, as they are for the situation with the rest of the Southern economies. This is again something that has been studied and admitted repeatedly by leading economists and journalists. Germany used its weight and forced the Eurozone (a supposed "economic alliance" for the benefit of all members), to further its own goals, and for its own's economy benefit for decades. E.g. by imposing specific trade rules and plans that disfavor the periphery, using Euro and ECB as monetary instruments to its national advantage, etc.
- ExpiredLink 11y ago
  The Greek can do anything they want. They merely need to find someone who borrows them the money.
  - mmanfrin 11y ago
    Sorta like the US has been able to do with the Fed? The difference is that the monetary policy of the ECB has been much tighter than it needed to be, and that caused ripple panics through lenders about solvency. This didn't happen to the US or Britain because there was never any doubt of solvency, just value (don't want to quantitatively ease to the point of rapid inflation). However, we're at a point where economists are arguing for more inflation in the Eurozone -- which would have fit nicely with the Greek situation. In the end, this is a case of Germans wanting their money to be worth more abroad, and this has caused Greece harm.
    - SovietDissident 11y ago
      The U.S. can get away with our inflationary monetary policy shenanigans because we (still) have legacy reserve currency status in the world. Currently, banks are being paid interest to keep money in government coffers, so they have no interest in lending it (the economy is also weak, which is likely a factor as well). We do have inflationary pressure in the U.S., which is probably underreported due to the CPI being taken out of official figures. In the event that there was meaningful GDP growth in the U.S., high inflation would likely be part and parcel. If we didn't have carte blanche in terms of printing all the money we wanted, the pressure would be all on fiscal policy, as it is in Greece. An apt comparison could be U.S. state governments, where they must maintain a balanced budget. Either you can inflate your currency (which destroys savings), you can increase taxes (which negatively affects growth), or you can cut spending to actually match what comes in. The U.S. has the luxury to do the former for a while thanks to rational monetary and fiscal policy (long) in our past and the fact that our economy is still relatively productive. We are living on borrowed time in this regard. Greece does not have the luxury, and has reached the inevitable end of collectivist economic policy.
  - coldtea 11y ago
    Actually they're not "free to do anything they want", as the sanest options (those which most foreign economists advised from the start), such as defaulting and/or cutting part of the debt were taken off the table by threats and diplomatic and political pressure.
fleitz 11y ago
Yup, I don't know why it's such a bad word. The EU/ECB is leveraging their position, as is Greece. Someone will blink.
- ExpiredLink 11y ago
  Why Syriza Will Blink http://www.project-syndicate.org/commentary/syriza-eu-default-negotiation-by-anatole-kaletsky-2015-05 http://www.project-syndicate.org/commentary/syriza-eu-defaul...
  - fleitz 11y ago
    Awesome article. Yeah, they're screwed. I thought they had stopped repayment so they could keep paying people inside Greece.

No, they had one-sided confrontation, derision and bullying from the other side for several years. [1] The Greeks merely elected a government to stand up to it. [1] That side of the German stance has been thoroughly discussed even in the Economist, Bloomberg, Financial Times, NYT, etc (as well as the huge financial gains Germany got from the "assistance" they provided).

cjensen 11y ago
Voluntarily accepting conditions attached to a loan is not bullying, particularly as the countries giving the loan are in no way at fault for Greece's dire need for a loan.
- hammerandtongs 11y ago
  Your moralistic tone might be appropriate in a completely simplistic loan from one villager to another villager. In the context of the very high complexity of the actual international system we have it doesn't really work or provide any explanatory power.
  - cjensen 11y ago
    Did you mean to address your comment to the original comment instead of mine? It was the grandparent comment who used the phrase "bullying" to imply immorality. My comment only claims that even if you assume morality in international lending, the particular phrase is not apt.
- phreeza 11y ago
  'at fault' may be too strong, but Germany surely benefited in the zero-sum game that resulted from the Euro fixing exchange rates within the eurozone: in the old system, Greece could have (and did) increase the exchange rate wrt the Mark to boost exports and keep the economy running. The inability to do this benefited Germany, at the cost of Greece.
  - mafribe 11y ago
    (1) In what sense is loosing billions to Greece benefiting Germany? (2) Greece can change its exchange rate. Just declare bankruptcy and leave the Euro.
    - Nimitz14 11y ago
      (1) Germany is profiting billions from the current exchange rate, that's why it isn't losing anything. (2) Which would fuck with the EU a lot more than it would bother Greece, which is why they're making the stand that they are, they know they have less to lose. There's a reason they haven't been kicked out already. ;)
      - mafribe 11y ago
        (1) I see no evidence of this. The ECB's flooding the world with Euros clearly inflates away net savers' wealth. (2) I agree that that's the game Greece has been playing. But it's perfectly compatible with what I said.
        eli_gottlieb 11y ago
        > (1) I see no evidence of this. The ECB's flooding the world with Euros clearly inflates away net savers' wealth. Germany makes its money on manufactured-goods exports, though, so an artificially cheap currency helps them.
        mafribe 11y ago
        But the artificially cheap currency comes about because savers' savings are being inflated away. Moreover it's unlikely that the money lent to Greece will ever come back. I don't see any evidence that in balance Germany benefits from this. Have you got any?
        eli_gottlieb 11y ago
        German workers trying to save lose. German capitalists making their money on exports and investing it by loaning it out win.
- yequalsx 11y ago
  Your comment indicates that you think that in the lender/borrower relationship only one side has responsibilities. The Germans via the ECB flooded Greece, Portugal, Spain with easy money in the early 2000s. It is incorrect to say, "...in no way at fault..." Greece was bullied and has been bullied and the average Greek has suffered as a result. They are not blameless by any means but what has happened to Greece is not just.
  - mafribe 11y ago
    I'm sorry that's misleading. Germany has one vote on the ECB, the same number as Greece, Spain, Portugal, Malta and every other country. Greece was perfectly happy to get cheap money. Instead of investing it in education, improved prductivity, Greece has been wasting it on an oversized army, extremely early retirement with cushy pensions for government employees, pointless olympic games, hagiographic articles in the NY Times and so on.
    - coldtea 11y ago
      >I'm sorry that's misleading. Germany has one vote on the ECB, the same number as Greece, Spain, Portugal, Malta and every other country. Yeah, if only democracy worked outside of power plays and diplomatic and economic might... Because after all the number of votes is all that counts... >Instead of investing it in education, improved prductivity, Greece has been wasting it on an oversized army, extremely early retirement with cushy pensions for government employees, pointless olympic games, hagiographic articles in the NY Times and so on. I know. Those lazy southerners getting German money are the same kind of vermin that Jews were back in the day, right? Because what you wrote is word by word the same kind of BS propaganda repeated in German popular media, about some lazy, unproductive vermins ("PIIGS") wasting German tax-payers money. Here's some reality: http://www.washingtonpost.com/news/morning-mix/wp/2014/05/16/greeks-work-harder-than-germans-who-knew/ http://www.washingtonpost.com/news/morning-mix/wp/2014/05/16... https://euobserver.com/social/124761 https://euobserver.com/social/124761
      - mafribe 11y ago
        Your incessant racism is tiring. In any case, if Greeks are so hard working, then you are actually agreeing with my point about Greece not investing the huge subsidies that they have recieved wisely into "improved prductivity". As the WaPo article you quote says: "Caveat: Long hours at the office don’t always equate to high productivity".
- cynicalkane 11y ago
  According to the pre-2008 economic consensus on monetary policy, bad central banking is the dominant force behind recessions. This theory is in no way disproved since central banks during the Great Recession failed to act according to the theoretical recommendations. The US is back on track (kind of) with QE, and perhaps coincidentally, the US economy is doing quite a bit better than the Eurozone. The ECB, which was tasked with maintaining inflation levels and nominal expansion throughout Europe, has completely abandoned this goal to serve the (short-sighted and wrong) interests of Germany and other economic powers. If we are to believe the pre-2008 economic mainstream, it is absolutely the fault of the countries giving the loans, who swamped the Eurozone with expansionary policy then yanked it away when it was needed most. Right now it's not politically convenient to believe in those economic theories, so you don't hear much about them from politicians or mainstream press.
  - SovietDissident 11y ago
    It seems to me that if the entire Eurozone was subject to the same monetary policy by the ECB, it leaves a wonderful base for comparison. In other words, we can forget about monetary policy in our analysis and compare the relative health of other economies in the Eurozone based on their governments' fiscal policies and fundamental economic productiveness. Greece, Spain, and Portugal fail the test.
    - cynicalkane 11y ago
      The entire motivation behind monetary economics is that there doesn't exist a "baseline economy" independent of monetary policy. This was the primary argument against the Euro. Developing economies are hurt more in recessions, and benefit more from widely varying monetary policy. This is true no matter how "good" or "bad" a country is, even if the "badness" of a country was justification for economically punishing its citizens in the first place (it isn't).
- coldtea 11y ago
  >Voluntarily accepting conditions attached to a loan is not bullying, particularly as the countries giving the loan are in no way at fault for Greece's dire need for a loan. Victims of loan-sharks, (one of the most despised kind of scum going back to the antiquity), also "voluntarily accept" the conditions attached to their loans. When you're in need, and even more in "dire need", there's a ton of leverage people have on you, which makes the "voluntarily" part quite meaningless. Not to mention that there are ways to pressure a country to not try other measures ("if you don't work this way and get this loan, and instead seek alternate courses of action we'll make sure we crush you"). E.g. "if you dare default, we'll kick you out of Eurozone" or "we'll kill your tourism industry", etc. And of course the countries deciding the load, namely Germany which acts as E.U's big boss, are very much at fault for Greece's dire need for a loan, as they are for the situation with the rest of the Southern economies. This is again something that has been studied and admitted repeatedly by leading economists and journalists. Germany used its weight and forced the Eurozone (a supposed "economic alliance" for the benefit of all members), to further its own goals, and for its own's economy benefit for decades. E.g. by imposing specific trade rules and plans that disfavor the periphery, using Euro and ECB as monetary instruments to its national advantage, etc.
ExpiredLink 11y ago
The Greek can do anything they want. They merely need to find someone who borrows them the money.
- mmanfrin 11y ago
  Sorta like the US has been able to do with the Fed? The difference is that the monetary policy of the ECB has been much tighter than it needed to be, and that caused ripple panics through lenders about solvency. This didn't happen to the US or Britain because there was never any doubt of solvency, just value (don't want to quantitatively ease to the point of rapid inflation). However, we're at a point where economists are arguing for more inflation in the Eurozone -- which would have fit nicely with the Greek situation. In the end, this is a case of Germans wanting their money to be worth more abroad, and this has caused Greece harm.
  - SovietDissident 11y ago
    The U.S. can get away with our inflationary monetary policy shenanigans because we (still) have legacy reserve currency status in the world. Currently, banks are being paid interest to keep money in government coffers, so they have no interest in lending it (the economy is also weak, which is likely a factor as well). We do have inflationary pressure in the U.S., which is probably underreported due to the CPI being taken out of official figures. In the event that there was meaningful GDP growth in the U.S., high inflation would likely be part and parcel. If we didn't have carte blanche in terms of printing all the money we wanted, the pressure would be all on fiscal policy, as it is in Greece. An apt comparison could be U.S. state governments, where they must maintain a balanced budget. Either you can inflate your currency (which destroys savings), you can increase taxes (which negatively affects growth), or you can cut spending to actually match what comes in. The U.S. has the luxury to do the former for a while thanks to rational monetary and fiscal policy (long) in our past and the fact that our economy is still relatively productive. We are living on borrowed time in this regard. Greece does not have the luxury, and has reached the inevitable end of collectivist economic policy.
- coldtea 11y ago
  Actually they're not "free to do anything they want", as the sanest options (those which most foreign economists advised from the start), such as defaulting and/or cutting part of the debt were taken off the table by threats and diplomatic and political pressure.

fleitz 11y ago

Yup, I don't know why it's such a bad word. The EU/ECB is leveraging their position, as is Greece. Someone will blink.

ExpiredLink 11y ago
Why Syriza Will Blink http://www.project-syndicate.org/commentary/syriza-eu-default-negotiation-by-anatole-kaletsky-2015-05 http://www.project-syndicate.org/commentary/syriza-eu-defaul...
- fleitz 11y ago
  Awesome article. Yeah, they're screwed. I thought they had stopped repayment so they could keep paying people inside Greece.