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Greek/Euro Crisis Explained

bcglorf says...

Thanks for your extra link there, that video is one very good talk on the subject. The writing is absolutely on the wall for some party like the Golden Dawn to exploit future unrest by just standing back and waiting for their moment. History repeats itself, and those who study it are doomed to watch helplessly as most refuse to learn from it.

radx said:

Let's ignore for the moment what led to this current mess within the Eurozone. You point out, correctly, that Greece is too poor to service its debt. And yes, for the German government to do whatever is required to get back their loans is to be expected. However, Greece was incapable of servicing its debt five years ago. Yet the subsequent programs, all supported or even demanded by the German government, reduced Greece's ability to pay back at least portions of its debt. At the end of the day, goods and services are what it's all about. And by dismantling the Greek economy, nevermind the Greek society, they actively undermined what they publicly claimed to be working for: a self-reliant Greek economy, capable of financing the needs of Greece. And capable of paying back what is owed.

The question inescapably poses itself: was it done intentionally or are they blinded by ideology?

One doesn't have to be as far left as I am to see that it didn't work, doesn't work, and never could have worked. Even the likes of Krugman and Stiglitz are perfectly clear about it.

Varoufakis, as you note, has been just as clear about this at least since late 2010, when he published the first draft of his Modest Proposal with Stuart Holland. There was a very good discussion about it in Austin in 10/2013 under the topic "Can the Eurzone be saved?" Participants included Varoufakis, Tsipras, Flassbeck, Holland and Galbraith, amongst others. I submitted a short clip back then.

His argument that Germany won't see a dime when Greece is shoved off a cliff, as correct as it is, never had any bite to begin with. The German government, and large parts of parliament, are operating in a parallel universe, economically. Over here, mercantilism is the road to success. Monetarism works. Surplus good, deficit bad. Saving good, spending bad. Everyone should have a current account surplus.

It's horseshit by the gallons, and it's the official economic policy of the largest economy in the EU.

And we're not even getting into the political aspects of it. Throwing a member of the EU into debt bondage, suspending its democracy to please the gods of the market... that's a travesty and a half. Yet it's also inevitable if they insist on going down the road of neoliberalism.

Worst of all, Greece is just the canary in the coal mine, as Varoufakis likes to point out. Greece had plenty of issues before they joined the EZ, but when they chose to adapt the same currency as a much larger economy hell bent on competitiveness, which is the favorite euphemism for Germany's begger-thy-neighbour policies, they were doomed to be crushed. The rest of the PIIGS are next in line, unless this whole mess exploded beforehand. Maybe Rajoy's Franco-esque repression techniques fail, maybe le Pen wins in 2017, who knows. Maybe Schäuble finds the 100k of bribes that he conveniently forgot about back in the '90s and chokes on them.

Last but not least, 208 billion Euros – that's the projected current account surplus of Germany this year. That's 208 billion Euros of debt foreign economies have to accumulate, so that the German public and private sector can run a combined surplus of €208b. That's the elephant in the room. Systematic undercutting of the inflation target through suppression of unit labour costs and a dysfunctional focus on exports.

radx (Member Profile)

oritteropo says...

I liked the way the Reuters article closed:

It was not clear what support the German position, which appeared to take no account of the political change in Greece, will have in the wider euro zone talks.


I went against your advice and had a look at a DW article on the subject, and I see what you mean, there is quite a big disparity between the accepted position in the article and anything else I've read from outside Germany. I am now also left wondering how on earth any compromise could be made acceptable to German politicians, and then sold to the public. Since Ireland and Portugal are starting to recover despite The Austerity, it's entirely possible that the usual suspects will say "Look! It works!". They do have much more debt now though...

I can understand a certain aversion to excessive inflation, after the chaos caused by hyperinflation in 1923, but you'd think that if they remember that then they'd also remember where that led (and particularly with the rise of Golden Dawn).

As for Italy, it has somehow managed to muddle along on the edge of disaster for so long that I'm starting to think it can keep doing so forever.

radx said:

[..]

You simply cannot have an open discussion about macroeconomics in Germany. Do I have to mention how schizophrenic it makes me feel to read contradictory descriptions of reality every day? It's bonkers and everyone's better off NOT reading both German and international sources on these matters.

Any compromise would have to work with this in mind. They'd have to package in a way that doesn't smell like debt relief of any kind. People know that stretching the payment out over 100 years equals debt relief, but it might just be enough of a lie to get beyond the level of self-deception that is simply part of politics. If they manage to paint Varoufakis' idea of growth-based levels of payment as the best way to get German funds back, people might go for it. Not sure if our government would, but you could sell it to the public. And with enough pressure from Greece, Spain, Italy, and France most of all, maybe Merkel could be "persuaded" to agree to a deal.

Greece's Finance Minister Yanis Varoufakis on BBC's Newsnigh

radx says...

In the current situation, "structural reforms" is used to subsume two entirely different sets of measures.

The first is meant to remove what you previously mentioned: corruption in all the shapes and forms it takes in Greece, from a (intentionally) broken tax system formed over decades of nepotism to a bankrupt national media in the hands of oligarchs. The institutions of the Greek state are precisely what you expect when a country has been run by four families (Papandreou, Samaras, Mitsotakis, Karamanlis) for basically five decades.

This kind of structural reform is part of Syriza's program. Like you said, it'll be hard work and they might very well fail. They'll have only weeks, maybe a few months to undo significant parts of what has grown over half a century. It's not fair, but that's what it is.

The second kind of "structural reform" is meant to increase competitiveness, generally speaking, and a reduction of the public sector. In case of Greece, this included the slashing of wages, pensions, benefits, public employment. The economic and social results are part of just about every article these days, so I won't mention them again. A Great Depression, as predicted.

That's the sort of "structural reforms" Syriza wants to undo. And it's the sort that is expected of Spain, Italy and France as well, which, if done, would probably throw the entire continent into a Great Depression.

I'd go so far as to call any demand to increase competitiveness to German levels madness. Germany gained its competitiveness by 15 years of beggar-thy-neighbour economics, undercutting the agreed upon target of ~2% inflation (read: 2% growth of unit labour costs) the entire time. France played by the rules, was on target the entire time, and is now expected to suffer for it. Only Greece was significantly above target, and are now slightly below target. That's only halfway, yet already more than any democratic country can take.

They could have spread the adjustment out over 20 years, with Germany running above average ULC growth, but decided to throw Greece (and to a lesser degree Spain) off a cliff instead.


So where are we now? Debt rose, GDP crashed, debt as percentage of GDP skyrocketed. That's a fail. Social situation is miserable, health care system basically collapsed, reducing Greece to North African standards. That's a fail.

Those are not reforms to allow Greece to function independently. Those are reforms to throw the Greek population into misery, with ever increasing likeliness of radical solutions (eg Golden Dawn, who are eagerly hoping for a failure of Syriza).

So yes, almost every nation in Europe needs reforms of one sort or another. But using austerity as a rod to beat discipline into supposedly sovereign nations is just about the shortest way imaginable to blow up the Eurozone. Inflicting this amount of pain on people against their will does not work in democratic countries, and the rise of Syriza, Podemos, Sinn Féin, the SNP and the Greens as well as the surge of popularity for Front National and Golden Dawn are clear indicators that the current form of politics cannot be sustained.

Force austerity on France and Le Pen wins the election.

Meaningful reforms that are to increase Europe's "prosperity" would have the support of the people. And reforms are definatly needed, given that the Eurozone is in its fifth year of stagnation, with many countries suffering from both a recession and deflation. A European Union without increasing prosperity for the masses will not last long, I'm sure of it. And a European Union that intentionally causes Great Depressions wouldn't be worth having anyway.

Yet after everything is said and done, I believe you are still absolutely correct in saying that the pro-austerity states won't blink.

Which is what makes it interesting, really. Greece might be able to take a default. They run a primary surplus and most (90%+) of the funds went to foreign banks, the ECB and the IMF anyway, or were used to stabilize the banking system. The people got bugger all. But the Greek banking system would collapse without access to the European system.

Which raises the question: would the pro-austerity states risk a collapse of the Greek banking system and everything it entails? Spanish banks would follow in a heartbeat.

As for the morality of it (they elected those governments, they deserved it): I don't believe in collective punishment, especially not the kind that cripples an entire generation, which is what years of 50+% youth unemployment and a failing educational system does.

My own country, Germany, in particular gets no sympathy from me in this case. Parts of our system were intentionally reformed to channel funds into the market, knowing full well that there was nowhere near enough demand for credit to soak up the surplus savings, nowhere near enough reliable debtors to generate a reasonable return of investment without generating bubbles, be it real estate or financial. They were looking for debtors, and if all it took was turning a blind eye to the painfully obvious longterm problems it would create in Southern Europe, they were more than eager to play along.

RedSky said:

The simple truth from the point of view of Germany and other austerity backing Nordic countries is if they buy their loans (and in effect transfer money to Greece) without austerity stipulations, there will be no pressure or guarantee that structural reforms that allow Greece to function independently will ever be implemented.

enoch (Member Profile)

radx says...

148...

If Syriza pulls it off and truly tells the banks and the troika to shove it up their collective asses, the banks in particular will throw Greece into a world of pain. With silent support by several governments within the EU, including my own, mind you. Any defiance must be crushed or else Spain will be right on track for a Podemos government.

And if Syriza caves and doesn't end the tyranny of austerity, Golden Dawn will become the only credible anti-austerity party -- the fucking Neo-Nazis.

The stakes are high, my friend. I haven't been this nervous in quite some time.

Russell Brand talks politics and revolution on Newsnight

radx says...

Depends on your definition of revolution, I suppose.

Look at Europe for a minute.

- The Greeks see the rise of Golden Dawn, an openly fascist party.
- Marine Le Pen's FN, an extreme right wing nationalist party, is polling at #1 in France.
- Italy got rid of Berlusconi, which for them is about as close to a revolution as you can get without massive bloodshed.
- The society in the UK has gone so unimaginably lopsided that the Red Cross is handing out food packets for the first time since the end of World War 2.
- Let's not even talk about the Hungarian government and its atrocious track record over the last years.

These are some pretty drastic changes, and rarely for the better.

Mammaltron said:

Revolution most certainly will not happen.

The English Defence League - Nazis or Nice Guys?

radx says...

Growing up near a place of Nazi pilgrimage, I always found comfort in the "knowledge" that a) it was just a regional/national problem and b) it'll sort of die down over the following years.

Two decades later, that particular area is almost rid of these knuckle draggers, yet the likes of Golden Dawn and the EDL are popping up all over the place. I had hoped to see the demise of this ideology, not to see it flame up again...

Aleister crowley-without walls-documentary part 1

chicchorea says...

Do what thou wilt has little, read nothing, to do with the naive and simplistic interpretation most often applied resulting in the wastrel excesses all too often attributed to it.

One must first have Will, not will, but Will.

Oh and that bugaboo, Knowledge. Don't forget the Gnostic influence.

The Beast indeed.

Old G. I. was mentioned. Cool.

Oh, and he was brilliant. Insane, a legal term. Crazy, interesting.

Magick not real? On the first page of the book entitled so he defines a magician as one who seeks personal power. I could tell you things.

He created no religion. The practices he employed and taught were older than you can imagine. The Christian Church itself stole Gnostic Masses. He studied and mastered disciplines from the most ancient extant sources. His disdain for the Golden Dawn, the Church, or anyone else was based on his dislike for inefficiency, inefficacy, and ignorance. He refined practices that in the Golden Dawn, for instance, would take five minutes, but his would take a few seconds utilizing his abreviation and would Work.

Try reading a few books, won't do much good. He and Gurdjieff wrote in a very ancient and prescribed manner. G. I. would have his students and fellows read his manuscripts. If they could read and comprehend, he would rewrite. Read Crowley voluminously and repititiously and at a point of critical mass it will all come together and make sense.

Pick up a Buddhist Tantric Sutra. You may understand every word in it but you will not comprehend one sentence without initiation.

Please, I apologize if this seems diatribic, it is not meant so I assure you.

Sex and drugs, whole other long...already ran my mouth too much.

Aleister crowley-without walls-documentary part 1

enoch says...

try don milo duqette qwiz.
his books on crowley,the golden dawn,enochian magick and the knights templar are fantastic reads (if your a geek like me).he also happens to be a nice guy (met him a few years back..ooo i'm such a lil name dropper).

lets remember that there are 4500 religions on the planet and the ones you are referring to are the abrahamic.
it is easier when you break them down into "eastern" and "western" theologies.western being predominantly the judau/christian/islam.

now as for the "do as thou whilt".that can easily be transcribed as "do unto others",different idioms with similar intentions and can be found in all religions in one form or another.it is the church that focuses on the subservience while the actual teachings of say jesus or mohamhed tend to be much more open in their interpretations.

Aleister crowley-without walls-documentary part 1

enoch says...

>> ^gwiz665:

"Do What Thou Wilt" an antithesis to Christianity.
Calling that satanism, is making it part of Christianity, since satan only exists in that.


"do what thou whilt may it harm none" was a traditional pagan saying but you can find the same inferrence in almost every religion.
you are correct in the statement concerning satanism,by its very terminology it is..by definition..a christian subset meant to be..as you stated..antithesis.
crowley rose through the ranks of the golden dawn and felt constrained by them.he moved onto a weird amalgamation of enochian magicks and heavily influenced by the rituals of calling and divination found in the book of solomon.

i have read a few books on crowley and either he was brilliant or batshit insane..maybe a combination of both which is most likely.
but for you atheists out there who abhorr religious hypocrisy...crowley is your hero.
he gave the church fits..literally.

Aleister Crowley - 'The Wickedest Man In The World'

raven says...

Yaaaay! Aleister Crowley on the Sift! He happens to be one of my very favorite historical miscreants! Great Sift Gwaan!

For anyone who's looking for a good (er... interesting) read, I suggest his novel 'Moonchild', a drug-induced frolick through the occult whose characters are thinly veiled representations of himself and his 'mortal' enemies, S.L.Macgregor Mathers, William Butler Yates, E.A. Waite, and more... for anyone with an itnerest in turn of the century occult or the Golden Dawn you will not be displeased!... however, be prepared to wade through a lot of esoteric nonsense and opium-pipe prose, it's worth it though, by the end, you will have a thorough admiration for the ego that claimed to have begun WWI as a means of sweeping the earth clean before 'ushering in a new era of Crowleyanity'!

South Park to Scientologists: "SUE ME" (watch the credits!)

choggie says...

...mentioned on another post, did not Ray Bradbury give the same gift to the world with his creation??? Same elements, mega-marketing and an army of the faithful??

How to Laugh from the Grave, 101....others include, jehova's witnesses founder,
Charles Taze Russell,
the mormons have Joseph "Multi-Wife" Smith,....
Sun Myung Moon,-Moonies,
Mary Baker Eddy-Christian Science,
William Ellery Channing...Unitarians.. ...pick one...want more??

Paul Twitchell-Echancar....how bout Alistair Crowley-OTO, and Westcott and Mathers-Hermetic Order of the Golden Dawn.......
and my personal favorite,..
Elizabeth Clare Prophet, founder and leader of the Church Universal and Triumphant
as long as there are systems, process, and creativity......it will continue......makes the world interesting.......sometimes, these whacky systems, work to enlighten.....and of course, make us laugh.


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