Unknown.

If the ECB pulls ELA, the Greek banking system goes belly up. Again, consequences unknown, but Deutsche Bank for instance didn't seem particularly stable during the last months, so the denial of any contagion risk might have been premature. Additionally, Draghi is tasked with maintaining the stability of the Euro and taking away Greece's last lifeline might just be too far out of his mandate, even for him. Keeping ELA up without increasing the limit will achieve the same result within days though.

If Greece fails to make its payment to the IMF tomorrow, it's at the discretion of Lagarde whether she pulls the plug. Info has been somewhat contradictory, but there should be a 30 day window before the board has to call it a default.

If a default is triggered this week, it's up to the ECB and the EC again. They have shown unwillingness to let things go bust, all the recent months of muddling through should be testament to that.

They cannot have a failed state within Europe without feeding right into the anti-European parties on both ends of the spectrum; they cannot throw Greece out of the EZ; they cannot revitalise the Greek economy without doing a 180 against their own ideology; they cannot let Syriza pull Greece out of the shit without encouraging Podemos. It's an impasse alright.

Should the Greek people vote against the proposal, a proposal that is no longer on the table, it'll be back to negotiations. Should they vote in favour of it, and should it still be available to them at that time in the first place, Tsipras might even get a majority for it in parliament, but Syriza will blow apart right then and there. The left wing cannot agree to further enslavement.

If, however, everything goes sour and Greece does indeed exit the EZ, introduce a new Drachma, the whole shebang, then we're in uncharted terrorities. The situation in Greece would deteriorate even further, given how much they rely on imports, especially of fuel. And the EU, already shaky from the tens of thousands of bodies floating in the Med, the falling standard of living for tens of millions and the sustained unemployment of an entire generation; this fecking union cannot turn the cradle of democracy into a failed state and survive. The governments might be ok with it, but the French people would rip this shit to shreds one way or another, and rightfully so.

At some point, yes. But for the time being, increases in productivity (automation) are less of a job killer than your everyday policies and ideologies.

Speaking of my own country, the amount of work not being done is enormous, and the aggregate of work not having been done over the last decades is absolutely staggering. The current economic system not only unloaded a great number of burdens onto society, it also never found a way to come up with a way to integrate the aforementioned work. No one is willing to pay for it, so it doesn't get done, period. The most prominent examples would be infrastructure works of all kinds (energy, most of all), ecological restauration and care for the elderly. Our national railroad alone could hire 100,000 people and still be understaffed.

You can have full employment next year, but not if you expect the private sector to provide the jobs within the current system. The public sector could create them, if you use a sovereign, free-floating currency, but ideology doesn't allow for it.

As long as we focus on finding people for a given job, there'll be mass unemployment, no matter what. Reverse the process, create/find jobs for a given people and we might make some headway.

Again, ideology doesn't allow for it. And that's also what made me stop advocating for an unconditional basic income (UBI). The financial details of it can be a nightmare, yes, and it would be a break with a social welfare system that survived two world wars. But the deal breaker for me was politics.

A UBI would mean taking the boot of the peasants' necks. Liberty and (some) equality made real. Love it.
But look at how vicious the Greeks are attacked these days, not just by the elite, but by our fellow worker bees. They're not just burying the last bit of European solidarity in Greece, they're unloading all their frustrations onto the schmucks who had very little to begin with. It's despicable. And it indicates to me that any attempt to introduce a system that would take from people the need to work would unleash unimaginable hatred from the usual suspects. And significant portions of the public would go along with it, given how easy it already is to channel their frustrations towards "welfare queens" and "moochers".

So yeah, a UBI would be lovely. Finally some liberty, finally more negotiating power for the worker (can decline any job offer without repression). But the shit would need to hit the fan hard before there can be any room within the political sphere for it.

Many people seem confused about our government's origins.
Wiki- Treaty Of Tripoli-unanimously ratified by congress and President John Adams 1797
Art. 11. As the Government of the United States of America is not, in any sense, founded on the Christian religion;

as it has in itself no character of enmity against the laws, religion, or tranquility, of Mussulmen [Muslims]; and as the said States never entered into any war or act of hostility against any Mahometan [Muslim] nation, it is declared by the parties that no pretext arising from religious opinions shall ever produce an interruption of the harmony existing between the two countries.

"By their actions, the Founding Fathers made clear that their primary concern was religious freedom, not the advancement of a state religion. Individuals, not the government, would define religious faith and practice in the United States. Thus the Founders ensured that in no official sense would America be a Christian Republic. Ten years after the Constitutional Convention ended its work, the country assured the world that the United States was a secular state, and that its negotiations would adhere to the rule of law, not the dictates of the Christian faith. The assurances were contained in the Treaty of Tripoli of 1797 and were intended to allay the fears of the Muslim state by insisting that religion would not govern how the treaty was interpreted and enforced. John Adams and the Senate made clear that the pact was between two sovereign states, not between two religious powers.[15]

The constitution and bill of rights were based on English Common Law, which existed long before the Romans brought the idea of Christianity to England....so if people insist our laws are based on religion, remind them the religion in power where/when they came from was Pagan religion, and they should be worshiping Odin.

Depressing, isn't it?

It does seem to me that Greece is better off without the Greek kleptocrats in charge, but if Syriza have any clues how to improve things, they haven't revealed them in a forum that I've picked up on.

I am starting to think that the reforms that Greece needs, to modernise and broaden its tax system, could and should come first and that any negotiations with creditors should follow. Ideally this would be done without actually killing the residual dregs of Greek industry... and as you say, an industrial relations policy would be a really good idea. The current policy of selling everything to outsiders and marginalising the Unions looks like it will go the same way as everywhere else it's been tried, leaving behind a core group of disenfranchised and unemployed poor folk.

At least there is the political will for change, even if they seem quite clueless about how to go about it.

@everyone
Part of the reason, I should point out, that her care cost so much is because we don't have enough government intrusion @bobknight33

When I look at the bill for her formula for example, it apparently cost my insurance company $750 to buy one can of formula (in bulk, mind you) when I can walk down to Walgreen's and get the same can for $20~.
It's truly baffling and if requested I can post pictures.


Why is this? It has to do with insurance companies and negotiations about prices through the hospital. Those prices should be capped with a law, but they aren't.

Thank you to everyone for your kind words. She's doing well and just had a first birthday, but we have 3 appointments a week and another few here and there that each have their own $$$ amount attached. I REALLY would be in the streets if we had to pay for all of this alone. Even if they didn't drop us because of the pre-existing condition, she's reaching what would have been her cap for care of 1 million dollars. Obamacare did away with those too. :-)

Thanks Obama!

Wall of text incoming. Again.

Sorry. Again.

tl;dr:

Debt relief right away was proposed, was neccessary, and was skipped to protect the European financial system.



You are 100% correct, we both are as convinced as one can be that a disorderly collapse would have been much worse for Greece. Might have turned it into a failed state, if things went really bad.

But the situation in Greece at the time the Troika got involved suggested a textbook approach would work just fine. Greece was insolvent, no two ways about it. A debt restructuring, including a haircut, was required to stabilise the system. Yet it was decided against it, thereby creating an enormous debt bubble that keeps growing to this day, destabilising everything.

Why?

People in Brussels, Frankfurt and Berlin knew in May of 2010 that Greece cannot service its current debt, nevermind pay it back. I remember rather vividly how it was presented to us, as it stirred up a lot of dust in Germany. They pretended as if the problem was a shortage of liquidity, even though they knew it was in fact an insolvency. And to provide an insolvent nation with the largest credit in history (€110-130b) is... well, we can all pick our favorite in accordance to our own bias: madness, idiocy, incompetence, a mistake, intent. They threw Greece into permanent indebtedness(?), and also played one people against another. People in Germany were pissed, still are. Not at the decision makers, but the Greek people.

Again, why?

Every European government, pre-crisis, drank the Cool Aid of deregulation, particularly with regards to the financial sector. When the crisis hit, they had to bail out the banks, a very unpopular decision in Germany, given the scandalous way it was done (different story). Like I pointed out before, when Greece was done for, German banks were on the hook for €17b+, and the French for €20b+. So no haircut for Greek debt.

It gets even better. The entity most experienced in these matters is, of course, the IMF. But IMF couldn't get involved. Its own regulations demand debt to be sustainable for it to become involved in any debt restructuring. Strauss-Kahn had the rules changed in a very hush-hush manner (hidden in a 146 page document) to allow the IMF to lend vast sums to Greece, even though they knew it would not be payed back. Former EC members are on record saying the Strauss-Kahn decided to protect French banks this way as a part of his race for President in France. So they changed IMF rules and ignored European law to bail out German and French banks, using the insolvent Greek government as a proxy.

Several members of the IMF's board were in open opposition. The representatives of India, Russia, Brazil and Switzerland are on record, saying this would merely replace private with public financing, that it would be a rescue package for the private creditors rather than the Greek state. They spoke out in favor of negotiations of a debt relief.

And if that wasn't bad enough, there's an IMF email, dated March 25th, 2010, that was published by Roumeliotis, formerly IMF. They put it very bluntly:

"Greece is a relatively closed economy, and the fiscal contraction implied by this adjustment path, will cause a sharp contraction in domestic demand and an attendant deep recession, severely stretching the social fabric."

Even the IMF, who chose parameters according to their own ideology, thought the European program to be too severe. That's saying something.

All that is just about the initial decision. The implementation is another story entirely, with unelected and unaccountable bureaucrats telling a democratically elected government what to do. There are former Greek ministers on record, telling how Troika officials basically wrote legislation for them. Blackmail was common, bailout money held as leverage. The Memorandum of Understanding was to be followed to the letter, and the Troika program was as detailed as a government program, so they really had their hand in just about everything.

The specifics of the program are a discussion of their own, with all the corruption going on. The Lagarde list (2000+ Greek tax dodgers) was held in secret by order of an IMF official – that alone should trigger major investigations. The nationalisation and sell-off of the four largest Greek banks, or the no-bid sale of the Hellenikon area to a Greek oligarch – all enforced by Troika officials.

The haircut of 2012, ~€110b wiped out, came two years late. As a result, it didn't hit any German or French institutions in a serious way. Most of the debt was in the hands of these four largest Greek banks -- NBG, Piraeus, Euro, Alpha – who subsequently had to be recapitalised by Greece to the tune of €50b. Cut by 110, up by 50 right away. Banks were nationalised and shares later sold again, at 2/3 the price. Lost another €15b, because the Troika demanded the sale to appease the markets.

The legal aspects of all this are nightmare-inducing as well. They violated numerous European laws, side-tracked parliaments, used governmental decrees, etc.

Let me just say this: when they forced Cyprus to give away two banks' branches in Greece for a fraction of their worth, Cyprus lost €3.5b, at a GDP of €17b, and those two banks went belly-up. It was pure blackmail, do it or you're out. Piraeus Bank received those €3.5b, and its head honcho had €150m of personal bad credit wiped clean right then and there, all at the command of the Troika. Those €3.5b had to be taken from ordinary folks by "suspending" the deposit insurance, perhaps the most stupid decision they had made so far.

Why did they do it? Because Greece was more important than Cyprus, and Cypriot banks were involved in shady deals with Russian oligarchs. Still illegal, and massively so.

Edit: I cut my post in half and it's still too long.

They ought to have a better understanding than most, through their participation in the Left Forum as well as their regular contacts with people like Jamie Galbraith, Rick Wolff, and Heiner Flassbeck most of all.

I'd say Syriza as an institution has quite good connections to socialist elements in German politics and should have known what to expect during negotiations with the likes of Schäuble.

Well, Syriza is an acronym for Coalition of the Radical Left (roughly), and everything left of the Berlin Consensus is considered to be radical left. So they are going to call Syriza a radical leftist party until the political landscape itelf has been pulled back towards more leftist positions. But you're right, if they were judged by their positions, they'd be centre-left in theory, if centre-left hadn't turned into corporatism by taking up the Third Way of Schröder/Blair/Clinton.

They are, without a doubt, radically democratic though. As your Grauniad article points out, they haven't turned on their election promises yet, which is quite unheard of for a major European party. Francois Hollande in particular was a major letdown in this regard. Few people expected him to bow down to German demands so quickly. Aside from his 75% special tax for the rich, he dropped just about every single part of his program that could be considered socialism.

Grexit... that's a tough one.

Syriza cannot enforce any troika demands that relate to the programmes of the Chicago School of Economics. Friedman ain't welcome anymore. No cuts to wages or pensions, to privatisation of infrastructure, no cuts to the healthcare system, nor any other form of financial oppression of the lower class. That is non-negotiable. In fact, even increases in welfare programs and the healthcare system are pretty much non-negotiable. Even if Syriza wanted to put any of this on the table, and they sure as hell don't, they couldn't make it part of any deal without further damages to an already devasted democratic system in Greece.

So with that in mind, what's the point of all the negotiations?

Varoufakis' suggestions are very reasonable. The growth-linked bonds, for instance, are used very successfully all over the world in debt negotiations, as just about any bankrupty expert would testify. Like Krugman wrote today, Syriza is merely asking to "recognize the reality everyone supposedly already understands". His caveat about the German electorate is on point as well, we haven't had it explained to us yet – and we chose to ignore what little was explained to us.

Yet the troika insists on something Syriza cannot and will not provide, as just outlined above. Some of the officials still expect Syriza to acknowledge reality, to come to their senses and to accept a deal provided to them. Good luck with that, but don't hold your breath. Similarly, Varoufakis is aware that Berlin is almost guaranteed to play hardball all the way.

Of course, nothing is certain and they might strike a deal during their meeting in Wednesday that offers Greece a way out of misery. Or maybe the ECB decides that to stabilize to Euro, as is their sole purpose, they need to keep Greece within the EZ and away from default. That would allow them to back Greece, to provide them with financial support, at least until they present their program in June/July. Everything is possible. However, I see very little evidence in support of it.

Therefore Grexit might actually be just a question of who to blame it on. Syriza is not going to exit the EZ willy nilly, they need clear pressure from outside, so the record will unequivocally show that it wasn't them who made the call. No country can be thrown out, they have to leave of their own. Additionally, Merkel will not be the person to initiate the unravelling of the EU, as might be the consequence of a Grexit. That's leverage for Greece, the only leverage they have. But it has to be played right or else the blame will be put squarely on Greece, even more so than it already is.

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Edit #1: What cannot be overstated is the ability of the EZ to muddle through one crises after another, always on the brink of collapse, yet never actually collapsing. They are determined to hold this thing together, whatever the cost.
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Speaking of blame, Yves Smith linked a fantastic article the other day: Syriza and the French Indemnity of 1871-73.

The author makes a convincing case why the suppression of wages in Germany led to disaster in Spain, why it was not a choice on the part of Spain to engage in irresponsible borrowing and how it is a conflict between workers and the financial elite rather than nations. He also offers historical precedent, with Germany being the recipient of a massive cash influx, ending in a catastrophe similar to Spain's nowadays.

It strikes me as a very objective dissection of what happend, what's going on, and what needs to happen to get things back in shape. Then again, it agrees with many points I made on that BBC videos last week, so it's right within my bubble.

How indeed.

Draghi's ECB has just made a move and I don't understand why. Come Feb 11th, they will no longer accept Greek bonds as collateral, effectively cutting off one of Greece's last two sources of credit. What remains is the Emergency Liquidity Assistance (ELA) provided to the Greek Central Bank, through which the entire banking system must now get most of its credit.

Why did they do it? Why now? I don't think it has something to do with the Advocate Generals opinion piece the other day, declaring the ECB's membership in the troika to be a conflict of interest and that fiscal policy is not to be used as a tool to influence poltical decision-making.

Could it be pure idiocy like the time they pulled to plug on Cyprus only to backpeddle shortly after? Or might they be trying to force a move on part of Germany and Greece? "Stop messing around and get your ducks in a row NOW." -- that sorta thing? Is it mere posturing of sorts, a shot across the bow of Greece?

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Edit #1

I really don't like this. It looks like disaster, smells like disaster and tastes like disaster. And it's entirely too close for comfort. Are they truly going to turn Greece into a failed-state over principle? The way they casually discuss the lives of nearly 11 million people, and the future of the European Union as well, is bone-chilling.
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In the meantime, Schäuble's meeting with Varoufakis went just as expected, reports indicate. Schäuble won't budge a bit. Negotiations with the troika are mandatory, and fiscal waterboarding must be resumed at once. There will be no compromise, not with him in charge. He'll push Greece off the cliff without blinking even once. Convictions worthy of a Templar, that one. Worth remembering that he admitted taking 100k in bribes from an arms dealer in '94 and still managed to become Minister of Finance. A living legend, just not the kind I'd prefer.

With regards to hyperinflation, most folks over here seem to have forgotten, or maybe they never learned, that Chancellor Brüning's austerity regime led to deflation in 1930-32, pushing unemployment to 23%. What followed was a massive influx in membership and infuence for parties at both ends of the political spectrum, similar to Greece. Except in our case, it wasn't the left (KPD) who won the elections in '32...

The obvious flaw here is that a single currency and a single interest rate rob member states of some of the tools they would normally use to deal with their slowing economies, and the union never implemented any other mechanism to replace them.

Earlier in the crisis I heard it suggested that perhaps the southern states would leave the euro and form a "euro south" union, and from what I've heard of negotiations in Brussels it might actually be easier than a better fix! I've never heard anyone suggesting that Germany should go it alone though, even if your statement seemed to suggest the idea Perhaps a less radical reading would suggest a New Deutsche Mark rather than a complete break with the EU... but there are still major problems with the idea.

While I agree, this may have been the Smart Move™ on Sam Smith's part to avoid a lengthy court battle over royalties and compensation and instead to negotiate a percentage through the writing credit - on the balance of probabilities in a court room a jury may well have found in Tom Petty's favour even if it was chance/coincidence.
But whatever. Sam Smith has a career ahead of him and Tom Petty has plenty of money.

Elections in Greece will be held on Sunday. If Syriza prevails, we might get some movement after all. Fingers crossed. All those politicians clinging on to this perverse notion of moral supremacy, particularly in Germany, are going to have a stroke when Greece starts ignoring the Troika's non-negotiable commandmends.

Its sheer entertainment value will put Hollywood to shame.

This video has been seconded as a duplicate; transferring votes to the original video and killing this dupe - dupeof seconded with isdupe by kulpims.

I agree, best Tom Cruise role ever.

Id however call it a dupe as the important bit is the same *dupeof=http://videosift.com/video/Tom-Cruise-Knows-How-To-Negotiate

This video has been nominated as a duplicate of this video by eric3579. If this nomination is seconded with *isdupe, the video will be killed and its votes transferred to the original.