EugenR October 13, 2013 at 22:11 #
Dear Yanis, to look at the European scenario only from point of view of Greek politics, that never could be characterized as very moral can’t impress the Germans or any other Europeans. The Greek people have to clean the mess they and mainly their politicians created. Greece has to remember, it is on the margins of Europe, economically and geographically and as such has no capacity to threaten the EU. As contrary to Greece when the Nazis took over Germany 80 years ago, it was a whole World problem. If the far left or right will take over the Greek government, it will be purely Greek problem.
Before the last Greek election i predicted (sarcastically) what will happen when left-righ government will be established in Greece;
Luckily the political scenario of right-left government, i predicted did not happen. Yet as you admit in your interview, the Greek politicians have learned very little. They again propose unrealistic budget deficit (unrealistic tax collection) and falsify the data.
As to the tragedy of Euro-Gold standard you mentioned, its only solution is exit from the Euro zone. The major aim of Greece economic policy should be how to make a slow and well regulated exit from the Euro zone, to prevent the alternative scenario of Euro-Drachma as i predicted two years ago.
With all my sympathy I don’t see the Germans, the Slovaks, the Dutch and all the others recruit their financial capacity to save again the Greek economy. There are to many others in the line. Slovenia, Spain, Portugal some Baltic states etc. Two years ago Greece default could still cause a financial panic with unpredictable results. Not any more. Sorry.
anna v October 14, 2013 at 07:15 #
@EugenR you end your comment with :
“I don’t see the Germans, the Slovaks, the Dutch and all the others recruit their financial capacity to save again the Greek economy. …….Two years ago Greece’s default could still cause a financial panic with unpredictable results. Not any more. Sorry.”
The “save ” is revealed for the EU self serving function it was by your last sentence.They did not try to save Greece, they tried to buy time to save their own economies by the whole maneuver with the memoranda and the loan. They got the time to get rid of toxic greek products, by hook or by crook, so that now the statement ” no longer Greece could cause a financial panic” is true.
We should have defaulted in 2009, and God only knows why we did not: somebody blackmailed the then prime minister? sleight of hand believed by limited intelligence? bad counselors? ….
Take a fat person and put him on a starvation diet by cutting off the food supply. He may be helpless for a few days but will gather his resources and get food somehow from the surroundings. The fat in the body is enough for hardship times as long as they do not last for a year ( as with ascetics).
Had we defaulted in 2009, we would have been in an uproar and starvation for two or three months, until a solution stabilized, but the populace had some fat in the banks that would have sustained the society for such an interval.
What has happened with the arm twisting solution of loans with memoranda we found ourselves in is:
a)Unemployment hits 30% ( as many are not in the formal lists). Had we defaulted this would have been much less as many companies would have survived at a lower financial income expectations. Many defaulted because of lack of liquidity.
b) The people, hoi polloi, are bewildered. They think the government has money and is not giving it to them, so continual strikes and demonstrations further pulled down the economy. Had we defaulted, it would have been like a fall in an ice lake: people would be aware what bankruptcy was , that the money tree had no fruit. Much less unrest and phenomena like golden dawn that managed the flower in these four years.
c) All the money saved for hard times has gone to taxes, taxes, taxes and there is no more, as the salaries have bottomed and every pensioner is supporting one or two unemployed with their children. ( with drastically cut pensions ).
c) The extensive diaspora of greeks would also have been awakened, with a “suden death” helping the helpless relatives as had been done during 400 years of ottoman occupation and was extensively done in the 1922 disaster. These memoranda and false rescues lulled them that not much bad was happening, just a tightening of the belt, good for the soul.
So do not sit there sanctimoniously and wave your finger at us. EU saved its skin so you can make the statement :”Two years ago Greece default could still cause a financial panic with unpredictable results. Not any more” . The “sorry” is hypocritical for those who saw the plot.
I do not agree with our host who has been seeing Greece as a possible wake up call for the rest of Europe by doing what Syriza proposes. I think the EU will shrug and say “Sorry” , too. I believe we should stick to this onerous program, taking our medicine until a recovery or the dissolution of the EU. A move now would be catastrophic and will set us at a level lower than Albania.
EugenR October 14, 2013 at 12:58 #
Dear Anna, thanks for your illuminating comment. To my understanding we have no argument what so ever. Maybe you don’t like my sarcasm but it is about style and not essence. But my sarcasm above was aimed to the extreme right and left politicians, who seemed to have at the timechance to win the elections. I tried to be sarcastic about their political claims, that contradicted themselves in each sentence. As if the Greeks were not the one who developed logic:). How can someone claim, that its policy is to stay in the Euro zone, and on the other hand doesn’t want to respect its policy and obligations to it. Not to speak about the fact, that Greece at that time had deficit in its current balance even without repayment of its debts, what means it needed additional cash to sustain the standard of living the extreme right-left promised to its electors. I always wonder how can so many people believe to all this lies of populist politicians. But then i remember how so many people drink Coca Cola, as if it was taste of life (one of their marketing slogans in the past), while it is nothing more than a sweetened water.
But back to economics, it is obvious Greece can’t expect help from other European countries. They are fed up with them, have no popular support for such a policy and above all it will not help them anymore. The times when Greece had the power to drag the rest of Europe into their dungeon are over. So what is left to do? To exit the Euro zone, devalue the Greek currency, and hope for better future. If it will be done wisely in few years Greece can be back on its heights. Of course there is an additional price to be payed, until the Greek skies will be again deep blue again. What’s most important is justly distributed economic hardship among the people, without to damage the potential economic growth, and this is the major task of the Greek politicians. I visited Athens more about 20 years ago. It was a huge village, where about half of Greek population lived quite a humble life, if compered to standard of living of rest of Europe. There is no need to return there. The public infrastructure built during the times of plenty will not disappear. The way out will be by recruiting the well educated youth used to think internationally, and understanding the global world. If they will be rejected by the political establishment based on the previous generation, there will be no bright future for Greece. The educated youth will vote with their legs as you rightfully wrote.
To try to cheat again the European economic system will not work in the near future. The Greek misbehavior in the recent past is still well remembered.