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It's a sticking plaster, delaying the inevitable. I don't suspect the 'new deal' will work and I think the growing discontent among the Greek people will contin
by vegancap 11y ago
It's a sticking plaster, delaying the inevitable. I don't suspect the 'new deal' will work and I think the growing discontent among the Greek people will continue to rise, especially under the measure of the latest deal. Greece will remain a protectorate and an insubordinate trouble child under the ECB's whip. Similar scenarios will likely play out in other southern European nation states in the next decade also.
- StavrosK 11y agoWhy would the other southern European countries want to be in the EU at this point? There's not much to gain, and they're likely to also be made an example of if another financial crisis strikes.
- icebraining 11y agoYou mean in the Eurozone? There's plenty to gain from being in the EU.
- deleted 11y ago[deleted]
- smcl 11y agoTrue, but at this point joining the EU pretty much involves consenting to adopt the Euro. Only Denmark and the UK have an opt-out afaik, all the other EU countries are obliged to join
- icebraining 11y agoI don't think anyone is interested in forcing countries to leave the EU if it's decided that they will leave the Euro.
- Tomte 11y agoNo, Sweden does not have such an exception, they are required to join when they fulfil the requirements. They just exercise some creativity by making sure they don't meet the requirements.
- icebraining 11y agoSorry, I deleted that part of my post (It read "UK, Denmark and Sweden").
- Tomte 11y agoNo need to apologize. Especially since it's close enough to an exception to remember it as such. :-)
- simpleigh 11y agoAlthough they don't seem to be in any rush - only 19 of 28 EU countries have joined the Euro according to https://en.wikipedia.org/wiki/Eurozone https://en.wikipedia.org/wiki/Eurozone .
- mtrimpe 11y agoThe Eurozone isn't necessarily that bad. The main thing is that you can't tax by printing currency anymore which is a really easy way to levy taxes. That means you have to have an efficient taxation apparatus, tax the rich and poor equitably and be very careful with borrowing. Greek's problem is that it isn't particularly strong in any of those and thus isn't really suited for being part of the Eurozone yet.
- wsc981 11y agoAs it stands, keeping the 'poorer' countries in the Eurozone seems like a very bad idea. The main reason being that -unlike the USA- people in e.g. The Netherlands don't feel a connection with people from Spain and vice versa. People in the northern European countries don't even feel a connection with people in the countries close to them, even though the cultures are much closer aligned (in terms of sobriety, work-ethos, etc…) This I think is the main difference with the USA. The USA also has richer and poorer stats, but because of the shared language, history and culture, people in both the richer and the poorer states feel like a US citizen.
- deleted 11y ago[deleted]
- johnchristopher 11y agoRemember: "There is no way to leave the EU once you are in." Or the Euro. Or the Eurozone. Or the EEC. Or the European Continent. Well, unless you have a really big motor engine.
- StavrosK 11y ago"Unless Germany wants you out", I guess. The terms of the deal for Greece have been pretty onerous, you lose control of your currency with no equivalent upside. Sure, there are plenty of advantages to being in the EU, but the disadvantages seem bigger.
- sasvari 11y agobeing a member of the eurozone and being a member of the EU is still a difference. as the latter: Greece benefitted quite a bit from EU subsidies since joining. you can argue about if the same holds true for joining the eurozone.
- mseebach 11y agoIf Germany actually wanted Greece out, they would have been kicked out 3-5 years ago. Germany desperately wants Greece in, why do you think they keep negotiating? > The terms of the deal for Greece have been pretty onerous, you lose control of your currency with no equivalent upside. No upside? What do you call a decade of easy access to super cheap credit? Also, these terms are not unique to Greece, no other Euro-zone country has control over it's currency.
- d-equivalence 11y agoAgreed. I'm Greek and I predict machetes in the streets in less than 1 year. If not that, the far right rising into power. Not sure which is worse.
- sampo 11y ago> Not sure which is worse. Maybe you can have both?
- StavrosK 11y agoI'd take the machetes. If Golden Dawn comes into power, it's going to be machetes for everyone, anyway.
- pitt1980 11y agowhat does "machetes in the streets" mean? I hope that was supposed to be marches and it auto-corrected
- d-equivalence 11y agoArgentina 2001.
- alfapla 11y agoIf the Greek don't like the deal they're free to leave the union.
- gizmo 11y agoThey can't. Not without support. It takes at least a year to create a new currency. They don't even have a functioning central bank. All businesses would have to adopt the new currency, all ATM machines, all government institutions. It's a huge project. Besides, without trust in the new currency it won't be worth anything. That trust has to come from the backing of a foreign institution.
- mseebach 11y ago> It takes at least a year to create a new currency A new full blown currency, yes. A new temporary currency can be done in days, or weeks at most - East Germany did it. Slovakia did it. The process involves your current currency and a stamp. For businesses and institutions, it's much easier, everything is electronic anyway. Your bank accounts just switch over from EUR to XGD. > it won't be worth anything That's pretty much the point. Exports and tourism will be boosted and the debt will be re-denominated in the new currency (at a fraction of its EUR value) or outright defaulted on.
- gizmo 11y agoA new currency would be worth much less than the Euro. That's a good thing. But it would still need to be more or less stable. I'm skeptical that an emergency currency would hold its value, because of capital flight. My "at least a year" claim is based on this: http://www.theguardian.com/commentisfree/2015/jul/10/germany-greek-pain-debt-relief-grexit http://www.theguardian.com/commentisfree/2015/jul/10/germany...
- bboreham 11y agoThe capital that can fly, has flown.
- 11y ago
- erkkie 11y agoWhat's the alternative?
- ExpiredLink 11y agoArgentina
- aembleton 11y agoAdopting a free floating currency so that countries aren't tied to other, more powerful countries but can instead let their economies grow at different speeds.
- erkkie 11y agoI agree that would be the best economic theoretical model, is it in any way feasible realistically though? Politically? Even if ignoring the EU side of it (which is nontrivial for various reasons not limited to defense, the vision of the EU, etc), is there a magic wand that would make the Greek government not be populist and wasteful with their own currency?
- aembleton 11y agoPolitically it would be very difficult. The problem with the EU is that it fantasises about being a United States of Europe. The problem with this is that Europe is not united. We have different languages, culture and histories. This is also what make Europe a beautiful, culturally rich place. The political elites are trying to impose a one size fits all model across Europe which won't work because we are not really all that united. We don't have a common European demos that means that individual countries are fighting for their own interest and their is no overall strategy for Europe because the electorate doesn't really care about Europe, just what they get from being a part of it. We really need to go back to being a trading block and to remove all of the political dictact and interference. If we really must have political unions, then they need to be between countries that share a common language so that the people can challenge their political masters collectively. This would mean Britian and Ireland, Germany and Austria, France and Belgium.
- youngtaff 11y agoProblem is the Greek's were screwed over in the first 'bailout'. They should have defaulted on the debt they owed to the private sector banks but instead EU/IMF etc. convinced them to borrow money from them to pay off the banks.
- vegancap 11y agoExactly, every subsequent bail-out has further ensnared them.