Greece Economic Crisis

[Draco Spirit]

Originally Posted by Ithekro

I'd still rather see a united Europe. Back in political sciences, over a decade ago now, on the eve of the Euro going into effect, it was speculated that the only way for the Western powers to keep China in check economically was a united Europe and the United States together to counter China's rise. The Dollar and the Euro.

Even if a untied Europe lead to economical ruin and destruction of the democratic system?

Fact is the nations of Europe have far stronger national identities than say the States of America have state based identities, as well as different economies, languages and in many cases legal details. Trying to force them under one government and one economy a great way to create the sort of strife that will leave Europe in such a state that whole generations will know nothing but suffering.

For example, try looking into some of sadder and more violent histories of some African states when different peoples were forced to have one government. Ethics conflict and civil war is not a pleasant thing. Likewise the economy going down the drain is also a great starter of wars, civil or otherwise.

A more united Europe on international issues is possible (talking with each other more a great start0, but trying to base it in political union (especially forced) is unwise IMHO.

[Ithekro]

The goal of the European Union was to prevent the possibility of having World War III being started by the European powers against each other. At least that was the first goal.

[Bri]

Originally Posted by Vallen Chaos Valiant

I just want to make it very clear, that EVERYONE cooked the books in order to join the EU. The economic demands for joining the Euro was literally entirely made up on short notice, not based on economic reality, and no one, not even Germany, took it seriously. This is because the Economic Union was NEVER going to work. EU wasn't so stupid as to assume the system could survive without fiscal union, it is just that they couldn't get Fiscal Union passed in their countries and Economic Union was the best they could get.

The goal from the beginning is to have Economic Union, then when a crisis happens, everyone would get together as a big family and help the losing nations financially and a Fiscal Union that leads to a Federal Europe would happen.

Of course, the leaders didn't tell that plan to their voters. So when everything went according to plan, Greece went under, the voters of the other nations instead demand to cut Greece loose. This wasn't suppose to happen. Having the same currency was suppose to make everyone friends. But it all went wrong.

The fact is since "having an economic disaster" was in face INTENDED, there was no problem inviting Greece into the EU and Euro. Greece didn't cheat, they did what they were told to do. The only people who got cheated were the voters, who didn't know the goal was a Federal Europe and want no part in it.

The single currency is the result of an agreement between northern and southern European countries. The north would benefit from a larger market and a weaker currency for exports, the south from lower interest rates and a stable currency. For this to work all members need to display fiscal discipline. Breaking the stability pact in times of economic down turn is one thing, flaunting the rules on the level Greece did is another.

The north want to see Greece as a country punished in order to set an example in regard to discipline and most southern countries are angry with Greece as their interest rates have increased due to market fears. On the whole there is little sympathy for the Greek state. When it comes to the humanitarian side things are more divided as many voters feel that the Greek people have suffered unfairly due to political and economic forces beyond their control.

While the media sometimes suggest otherwise, the majority of governments and voters in Europe are by and large in favor of further integration. The benefits in terms of peace, growth and power on the world stage while embedding the major powers (UK, Germany and France) to majority rule have simply been too great. However full fiscal union is not something even the most diehard federalists will be dreaming off in the current political climate. Best they can hope for is the continuation of the structure funds and common agricultural policy. Much of the current skepticism is more due to the effects of globalization wreaking havoc on the welfare states.

From an economic point of view the Euro has been very successful over time. It remained stable during a very volatile financial period. The Greek crisis only went out of control due to a design flaw that left the bank supervision in the hands of national governments, the banking union should have solved that problem.

[Xellos-_^]

Looks like a deal is possible and very probable.

but considering that Greece pretty much agree to most of the demands they rejected. Why go through the charade the last two weeks. That little show probably cost both Greece billions form its economy and increase the cost of the bailout to other Euro countries.

[Vallen Chaos Valiant]

Originally Posted by Xellos-_^

Looks like a deal is possible and very probable.

but considering that Greece pretty much agree to most of the demands they rejected. Why go through the charade the last two weeks. That little show probably cost both Greece billions form its economy and increase the cost of the bailout to other Euro countries.

Greece didn't agree. The party did. The people said no.

The fact that the referendum was ignored doesn't mean it meant nothing. It just means as we suspected, the EU is no longer a democratic institution, perhaps it never was. That's why despite the complaints of the German voters, Germany is going to offer debt relief. And they don't even get a referendum.

[jpwong]

Originally Posted by Vallen Chaos Valiant

I just want to make it very clear, that EVERYONE cooked the books in order to join the EU. The economic demands for joining the Euro was literally entirely made up on short notice, not based on economic reality, and no one, not even Germany, took it seriously. This is because the Economic Union was NEVER going to work. EU wasn't so stupid as to assume the system could survive without fiscal union, it is just that they couldn't get Fiscal Union passed in their countries and Economic Union was the best they could get.

Oh I'm aware that even Germany hasn't actually maintained all the conditions listed as required for EU membership, it's more of a question of just how much outside those requirements could a country take it before you really have to seriously consider that they shouldn't have actually ever been let in in the first place and be cut loose. Basically, the size of the lie is important here if everyone was expecting everyone else to lie a bit.

Back to more current events, the bailout proposal seems really sketchy. Not only is it basically the same package that they just rejected, some of the targets seem overly ambitious to the point where it seems like they would be unattainable given the current Greek economy after the last two weeks of events. Given that the reforms the Greek government is giving into are sure to be wildly unpopular, I'm not sure how far they can possibly get, especially if there's any chance that loss of support from other coalition parties could mean a snap election again.

[Xellos-_^]

Originally Posted by jpwong

Back to more current events, the bailout proposal seems really sketchy. Not only is it basically the same package that they just rejected, some of the targets seem overly ambitious to the point where it seems like they would be unattainable given the current Greek economy after the last two weeks of events. Given that the reforms the Greek government is giving into are sure to be wildly unpopular, I'm not sure how far they can possibly get, especially if there's any chance that loss of support from other coalition parties could mean a snap election again.

but still enough for the vote for the bailout to go through. The politicans can go home and tell the voters, we held firm and the greeks back down.

Then in coming weeks there will be talks of debt relief and Syriza can go home and tell its voters they held firm and the creditor back down.

[Kafriel]

The new issue is the backlash that the country's going to get, should the new goals not be met. I really hope they can make it, otherwise...it won't be a pretty sight.

[Anh_Minh]

Originally Posted by Xellos-_^

but still enough for the vote for the bailout to go through. The politicans can go home and tell the voters, we held firm and the greeks back down.

Then in coming weeks there will be talks of debt relief and Syriza can go home and tell its voters they held firm and the creditor back down.

And in a few years when we do it all over again we can all pretend to be surprised that nothing's been done.

[Xellos-_^]

Originally Posted by Kafriel

The new issue is the backlash that the country's going to get, should the new goals not be met. I really hope they can make it, otherwise...it won't be a pretty sight.

you guys could start by taxing your shipping companies.

Originally Posted by Anh_Minh

And in a few years when we do it all over again we can all pretend to be surprised that nothing's been done.

nobody ever gave politicians brownie points for long term thinking.

[jpwong]

Originally Posted by Xellos-_^

but still enough for the vote for the bailout to go through. The politicans can go home and tell the voters, we held firm and the greeks back down.

Then in coming weeks there will be talks of debt relief and Syriza can go home and tell its voters they held firm and the creditor back down.

Are we at that point? I was under the impression that it would still take weeks to actually hammer out an agreement and all the current posturing is just to give the ECB cover to start giving the Greek banks money again so they can re-open if the rest of the EU agrees to look at funding a third bailout using the Greek proposal as the starting point.

[Xellos-_^]

the deal Greece is presenting is pretty much everything Germany ask for. Merkel doesn't want to be the one to kick Greece out of the Euro. So unexpected happens the deal will go through on Sunday and everything afterword is formality. There is also probably a backroom deal arrange by the French that the Greece will get debt relief if they accept austerity.

like i said in my previous post the Creditor will be able to say to their voters they Held firm and the Greeks back down. Styriza will be able to say to its voter, they held firm and the Creditors back down.

and like Anh said, in 2-3 yrs we do this all over again.

[KiraYamatoFan]

Originally Posted by Xellos-_^

you guys could start by taxing your shipping companies.

What about taxing the bloody civil servants more than they currently are as well? It's damn ridiculous enough for a class of citizens to not pay enough taxes, especially when they are government employees.

[Ithekro]

No, he means the shipping companies that are currently tax exempt.

[Eisdrache]

Good god, so we had to go through this whole BS just so a few politicians can tell their voters "we didn't back down." How about you tell them instead "we didn't back down, increased our deficit even more in the time frame that we held the referendum, became the first developed state that couldn't pay back and then we STILL accepted the (mostly) exact same deal, but at least we didn't back down!".

Originally Posted by Anh_Minh

And in a few years when we do it all over again we can all pretend to be surprised that nothing's been done.

This is the one thing that has to be avoided at all costs simply because if it happens then it shows that they learned nothing from their previous experiences. Unfortunately I'm not convinced at all that they did ...

[Kafriel]

I'd say it's a matter of....sending a message. Previous governments didn't really do anything to propose something different and a lot of people had felt they'd just been lied to, again. While the result may be the same, the way it was achieved is different, and that just might have an impact on future agreements.

And in a few years when we do it all over again we can all pretend to be surprised that nothing's been done.

Things change, regardless of whether people can see it or not. I highly doubt the situation will remain as is, even if we are faced with a similar conundrum in the near future.

[Xellos-_^]

Originally Posted by Eisdrache

Good god, so we had to go through this whole BS just so a few politicians can tell their voters "we didn't back down." How about you tell them instead "we didn't back down, increased our deficit even more in the time frame that we held the referendum, became the first developed state that couldn't pay back and then we STILL accepted the (mostly) exact same deal, but at least we didn't back down!".

don't you just love politics

Originally Posted by Kafriel

Things change, regardless of whether people can see it or not. I highly doubt the situation will remain as is, even if we are faced with a similar conundrum in the near future.

whatever happens i don't see Greece getting a 4th bailout and a 3rd debt write down. next time Greece runs out of money you guys are on your own.

[Vallen Chaos Valiant]

Originally Posted by Xellos-_^

whatever happens i don't see Greece getting a 4th bailout and a 3rd debt write down. next time Greece runs out of money you guys are on your own.

And how are you going to stop it if the EU decide to do bailout and debt write down again? It isn't like the EU voters have any say in it. If you can't stop it this time, what made you think you can stop it next time?

[Eisdrache]

Originally Posted by Vallen Chaos Valiant

And how are you going to stop it if the EU decide to do bailout and debt write down again? It isn't like the EU voters have any say in it. If you can't stop it this time, what made you think you can stop it next time?

Because the EU is not stupid. Yes really. You can only play your trade partner for a fool for so long.

Greece had some improvements after the EU basically held the gun to their head but they're still refusing to implement many of the really important changes. If Greece would actually show real progress then the EU would be much less reluctant with their debt relief. Greece BARELY dodged the bullet and it's much more probable that there won't be a next time rather than the other way around.

[Kafriel]

I trust you people know that this is happening exactly because Greece has little credibility compared to other indebted countries. Let's not forget that "progress" involves selling off the remainder of the major public companies, because...privatization ftw?