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Samizdata quote of the day ‘Our state became bankrupt…’
No doubt due to undetected bankrupting radiation, beamed at Greece from an unknown planet hiding behind Pluto. It’s amazing, how that happens. One minute, you’re eating ouzo and drinking olives, and the next – you’re bankrupt! It must happen in some stealthy manner, like male pattern baldness, or the growth of my first wife’s hatred for me.
‘…placing the largest loan…’
They forced us! We didn’t want the money, but they made us take it! We had to! If we didn’t, they said they’d do – well, we can’t quite remember what they said they’d do if we didn’t take their money at once, but it was bad! Terribly bad! We had no choice! We’re victims of Providing Money with Menaces!
– Commenter llamas
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
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Money Pushers. Shady men in suits and gelled hair hanging around on street corners and tempting honest politicians to borrow 50 billion euros to piss against the wall bribing voters.
These people are a menace!
Should not these pushers be explaining to their ‘suppliers’ that they have invested some people’s pensions and insurance policies in a scheme requiring repayment by the Greek taxpayer? (There’s only one, and he’s a bit fed up).
Presumably the same sort of malevolent external force, beyond human understanding, that leads to girls mysteriously falling pregnant.
Still, there’s a teeny difference between (A) raising a stupendous loan, partying like mad, then finding himself financially embarrassed and having to repay by tightening that belt several notches beyond comfortable; and (B) raising a stupendous loan, partying like mad, etc and then requiring (C) to tighten his belt to repay B’s loans. No doubt there were plenty of Greeks who kept voting for the party (and have just done so again) and who went to the party themselves. But I expect there’s quite few who never voted for a party, never went to one, and will still be required to stump up.
That’s the problem with Mencken’s dictum. The common people who think they know what they want will certainly get it good and hard. But so will quite a few others who wanted something different. And that, in a nutshell, is the difference between liberty and democracy.
When you add in not just the votes for the lunatics who won, but also the votes for the overt fascists and communists in the other parties, who are, lets face it, in no way any better: it does strongly indicate the non-lunatics are the ones who are very much on the fringe in Greece.
Greece is like a thorn in a lion’s paw and the lion pulls it out but the thorn will demand restitution like De Gaulle continually demanded war reparations from Britain.
I’m watching Newsnight on this right now. And it’s excruciating. BBC journalists talking up Chavez, and saying Marx is back in the UK. The main story being led by a journalist who describes the Greek crisis as being between a politician “who doesn’t think capitalism always provides the best system” and the Troika of ECB, COM and IMF, who are “free market institutions”. Dianne Abbott and Caroline Lucas are balanced by the impeccably free market..,. Ken Clarke?!?
I’ve often laughed at Randians, called them Randroids, and ridiculed the long speeches and Utopian escapist fantasies. But I do accept, and watching Newsnight here and now more than ever, Rand was incredibly prescient. Not for her vision of capitalist redemption, but for her penetrating, excoriating portrait of the leeches. On that, she was right, right more than anyone else, right in a way that no one else was. Switch on Newsnight, see the leeches, and know Rand was right.
So? If Greece decides not to pay – is Greece without Friends – Maybe China ( Money lender to the world)
How you all going to make Greece pay up. Especially if Spain and Italy etc follow suite. And the UK wants to leave EU.
China is having it’s own problems, which is why it’s notching up the anti-Japan campaign.
How about we invade Greece? War will be good for the economies- maybe that’s what’s missing! If it had a good war, the Eurozone would recover nicely, and all would be right with the Euroworld! Winning is not important, though it would make a good press release. In fact, if the war was continuous, it would be better.
This could be the project that unites Europe!
This is like a bogan peeling an apple on dark corner and this cunt backs around the corner onto his knife 37 times.
Bogan = Aussie Chav?
A bogan is more like a suburban redneck. We had a TV series called ‘Upper middle Bogan’, where a young woman found out that she was adopted, and then tried to live in both worlds, the educated rich world, and the bogan.
If Greece defaults on her debt, then any future lenders stupid enough to loan money to Greece should be held solely to blame for their own losses.
Fool me once, shame on me …
Maybe it was an Amigo loan, with Germany as the guarantor?
llamas is a genius btw. I am reminded of the reported translation of Emperor Hirohito’s speech in August 1945 announcing Japan’s surrender ‘…the war situation has developed not necessarily to Japan’s advantage, while the general trends of the world have all turned against her interest……’.
Yes blaming “the banksters” is as absurd as blaming “the Germans”.
For many years the Greek government has promised people stuff (Welfare State stuff) that can not be afforded – and the cost goes up every years (as these things always do).
Now it is breakdown time.
Stop bashing the Greek people. They were offered what looked to be a sweet deal, and they took it. Every single people that has ever existed, including all the commenters at this and every other blog, have and will accept such deals when offered.
Also, stop assuming the deals were offered by cynical, power-grubbing politicians. It is obvious that nearly all our leaders have been brain-washed into superstitition and delusion and by and large believe what they are doing is good. Putin and Xi are the only realists on the world stage, and they came up in systems that punished failure with death. That’s why they are winning.
The real Greek problem is that an economy based on olives and goat cheese and ouzo and tourists could not sustain the illusion. In the short term, Greece must default on its debts and leave the Euro. This will only provide temporary relief, but that’s better than the deep depression Greek is now in. Every other Western country is in a similar boat. Greece’s just sank first. All the others will follow.
The bigger reality is that the EU is a German colony, and that Germany extracts wealth from it to the advantage of its own citizens. Think, EU equals Belgian Congo; Germany equals Belgium.
One would think that after two world wars and its depredations on the EU colony, people would wise up and realize that a united Germany is the problem. If Europe is to have a successful future, Bismarck’s monster must be unsewn, and Germany must be cut up into a hundred or so bickering city-states.
Merkel and her ex-Stasi friends should be pensioned off to some Caribbean island to work on their tans.
I was in the UK a few weeks ago, for the first time in several years. And I was up and down the motorways a lot.
One thing that struck me as new (to me) was the large number of foreign semi-trucks running up and down the road. From every far-flung corner of Eastern and Western Europe, there seemed to be freight being hauled. I saw trucks based in places like Tirana, and even some from Asia Minor.
Except Greece. I think I’m right in saying that I saw not a single truck from Greece.
As Bob Sykes observes, a nation whose economy is so tiny, and with such lack-luster growth and possibilities, simply could not afford the level of spending they committed themselves to.
Probably not the fault of the Greek voters – as said, most voters would go for deals like this, if offered. We can see it in the US right now, with the President promising another huge round of Free Sh*t, and up he goes in the polls. But definitely the fault of the politicians on both sides of the deals. Whether they’re venal, or deluded, makes no difference – they’re supposed to be neither.
llater,
llamas
Winning? Well met thou Angel of Delusion, for I knowest thy name and is it… bob.
But the voters are to blame, they are all guilty, if they have voted for ‘free money’, unless it was as a way to keep a worse scoundrel out. Politics is the aggregate of millions of unscrupulous choices. All that we in the UK can say is that we are a few years off Greek levels of debt, but not many. By tomorrow, we’ll be at £1,475,000,000,000.
Llamas makes a great point in that by simply looking around you, you can glean some clues as to what is going on in the world. To be fair to Greece, they might not have many lorries out and about (I often go up and down English motorways and I don’t recall any Greek lorries, and the number plates would stand out, but Poland, France, Hungary, Spain, Germany, Latvia, the Czech Republic, Turkey and occasionally Portugal all feature), but the Greeks still have a Merchant Marine, so perhaps its comparative advantage, they do the shipping and the trucking is left to others.
Bob Sykes may be correct that Germany is extracting wealth from the EU, but from where I sit (on the other side of the Atlantic) I can’t see it. Rather, it seems to me that Germany is subsidizing much of the EU, primarily the southern edge. Am I wrong?
But as to his other point about not blaming the Greek people, I don’t buy it. Yes, they may originally have been seduced into taking a “sweet deal” (seduced by whom? And to what end if not “power-grubbing”?), but by now it is abundantly clear that it was truly a deal with the devil yet they have doubled down on their delusion. This is a country where the national government accounts for well over 50% of GDP*, where almost 10% of the population is on the government payroll, where regulation is so pervasive and extensive that business formation is nearly impossible, yet these people keep voting for more of the same. Who else is to blame for this demonstration of massive national stupidity?
By the way, Bombadill, you can be certain that within a few years after Greece defaults on its debt the international bankers will be lining up to lend it more money. Walter Wriston at Citibank showed the way back in the 1960s (he foolishly believed that sovereign default was impossible), and since then Citibank has been a serial lender to bankrupt nations (and a serial recipient of taxpayer-financed bailouts).** All the large international banks will be falling over themselves to lend Greece money; they never learn anything from history. And yes, they will absolutely deserve what they get, but the sad truth is that when those chickens once again come home to roost the world’s taxpayers will bail them out.
* Another illustration of the fallacy of the GDP calculation methodology. Government produces nothing, so its expenditures should not be included in the total. The current concept of GDP is merely one more Keynesian delusion.
** Whatever the merits of “too big to fail”, Citibank itself needs to be broken up. Something about the culture there is toxic; it is clearly unmanageable.
“Whether they’re venal, or deluded, makes no difference – they’re supposed to be neither.”
No they aren’t. The voting populace, which is what selects politicians, does not put “realistic” or “honest” on the qualifications list. Attractive, empathetic, “experienced”, tells us what we want to hear, all those are there, but we don’t care if they are venal, deluded, or both.
For what it’s worth, I have seen Syriza’s economic spokesman, Yannis Varoufakis, a few times on Paul Marks’s favourite programme, the Max Keiser show. He comes across as fairly sensible, and not a communist at the very least.
As far as I can follow it, his plan is not to repudiate Greek debts, but to reschedule the payments until such time as Greece can afford to make them. Given that the Greek economy has been crushed by 25%, one can understand why its people resent foreign bankers having first dibs at their money. The rest of Syriza’s economic programme may well be the usual left wing lunacy, but the need to reschedule debt repayments is a fairly sensible plan which any debtor might need when the ability to do so is just not there.
Of course, Greece should never have been allowed in the Euro at all, but Syriza has to deal with the situation they face now, not the situation that they should have faced. Anyway, we will see if Frau Merkel is prepared to cut a deal, or send the Greeks a “Ford to City: Drop Dead” type message.
I myself am not at all interested in placing the blame: i am only interested in finding solutions. (Not that anybody will listen to me, except a few people who read my comments.)
But if i were to place the blame, it would be on the French, or at least on Sarkozy: if he didn’t put pressure on Merkel for a bailout, the Greeks would probably never have felt entitled to one. As it is, there is no way to push the worms back into the can.
The bigger reality is that the EU is a German colony, and that Germany extracts wealth from it to the advantage of its own citizens.
Think, EU equals Belgian Congo; Germany equals Belgium.
One would think that after two world wars and its depredations on the EU colony, people would wise up and realize that a united Germany is the problem. If Europe is to have a successful future, Bismarck’s monster must be unsewn, and Germany must be cut up into a hundred or so bickering city-states.
Sorry, i pressed the wrong key. Here is a revised comment:
I myself am not at all interested in placing the blame: i am only interested in finding solutions. (Not that anybody will listen to me, except a few people who read my comments.)
But if i were to place the blame, it would be on the French, or at least on Sarkozy: if he didn’t put pressure on Merkel for a bailout, the Greeks would probably never have felt entitled to one. As it is, there is no way to push the worms back into the can.
It doesn’t look like that from any of the 5 EU countries (none of them German speaking) where i lived and worked/studied. Which EU countries are you qualified to speak for?
Hmm…if that is not moral idiocy, then it’s pretty close to it.
Why just Germany? every country with more than, say, 1M citizens would be better off if cut up into city states, following the Swiss model.
A couple more thoughts:
I can see nothing in the quote of the day that can reasonably be interpreted as Greek-bashing: llamas is making fun of the people who talk that way. Not all Greeks talk that way (trust me, i know) and not all people who talk that way are Greeks. In fact, some British+American EUphobes also seem to imply that the loans were imposed on Greece.
Also, on second thought i suspect that the main culprit here is the Basel II Accord. Without it, there might not have been reckless lending to Greece in the first place.
Laird:
That is of course an exaggeration: Finnish education is “produced” by government, and yet manages to be one of the best in the world. In other countries, government-run education+healthcare are often grossly inefficient, but they produce _something_.
Anf yet this is an important point: we are told that Greek GDP per capita shrank by more than 20%. How much of it is due to cuts in public spending, and how wasteful was that public spending? that, we are not told.
JohnK:
The key question is not how to deal with the current debt, but will the economy be reformed. So the nice person you saw on RT may well be a communist like the rest of his friends (most likely is). He could have well discussed the current weather.
No Snorri, the individuals who work for these governments produce something. The government is the middleman who invited himself where he was never needed in the first place, assuming a position of an employer. What it does, is take what those people produce (education, healthcare, whatever, of whatever quality), and sell it to consumers while cutting its share. A very big share at that.
There has been a lot of reference here that the Greek economy is based on goat herding and olive growing. They have a huge presence in shipping, based on seeing Greek flagged vessels in New York and Philadelphia, for two. Home ports Pireau and Nepeiaye, or something like that. The Cyrillic alphabet loses something in translation.
Anyway, the infrastructure needed to support such activity-financing cargo, insurance, crewing, who knows what else, must be significant.
They basically have filled the worldwide void left by the U.S. not having a fleet,respective of it’s size, certainly the US-Europe trade.
So, Gabe Newell is a Communist? The Syriza government includes a man praised by Gaben himself, purveyor of that notorious commie, anti-free market institution,, Steam.
He clocked that there was an irony to market-based economies. We have markets for land, sheep, labour and even money itself. But inside companies themselves, exist “market-free zones”.
“Firms can be seen as oases of planning and command within the vast expanse of the market,” Mr Varoufakis has written.
His work at the tech company helped it in “trying to become a vestige of post-capitalist organisation within capitalism”.
Varoufakis is certainly proved right on this count; Valve and Steam are huge successes, and the bizarre “statism” and outdated, ineffective hierarchical management systems, that resides in most companies is a waste of economic opportunity.
Of course, us Brits know full well Germany’s comical hypocrisy; Merkel uses siphoned UK taxpayer dough to finance her railways, and she happily hoovers up Greek taxpayer money with arms sales to Greece’s corrupt, parasitic, military.
Greece is shaping up to be the next Venezuela, but with just olive oil.
The real stupidity with Greece is the desire on the part of its people to stay in the EU. Supposedly 70% want to stay in the EU and keep the Euro, despite the vote for Syriza. (I’m assuming that number comes from a proper survey, and not some survey like the rubbish poll reported by the Express last week with the headline “80 per cent of Britons want to quit EU in biggest poll for 40 years”).
Greece needs to default, and get out of the EU, and start again. That’s what I and many others on the libertarian net said at the time of the recession. Not defaulting was just going to prolong the agony for everyone, and that’s what’s happened. On the one hand Greece is saying that it’s all the fault of the EU, but the Greeks are too frightened to leave the EU. They’d be in a much better position now if they had. They’re like a girl who hates her sugar-daddy, but can’t conceive of living without him and his money.
Maybe there’s some wisdom in that, given how bad they have been at managing themselves, and how keen the main EU countries have been to pay them off, but you’d think it would be obvious even to the Greeks that using the Euro is the worst scenario of them all.
Here’s a link to what seems to be the basis of that survey about Greek attitudes to the EU that was mentioned in the media recently:
pewresearch.org/fact-tank/2015/01/27/greek-election-reflects-countrys-differences-with-the-eu/
(I can’t get the HTML tags to work on this site).
It’s from the Pew Research Center so I hope it’s got some credibility. The results I have summarized are interesting:
1. Only about a third of Greeks have a positive view of the EU.
2. Just 17% think that European economic integration has been good for Greece.
3. 86% say the EU is intruding in their country’s business and 67% think it’s inefficient.
4. 71% of Greeks oppose giving more decision-making power to the EU to deal with Europe’s economic problems.
Yet:
5. 69% of Greeks want to keep the euro and not return to the drachma.
Yeah, that makes sense. On the sugar-daddy view, at least.
I see no reason for such an assumption. Formal elections is the only (comparatively) reliable mechanism from which to draw any conclusions about the opinions of the people in a particular country.
>Formal elections is the only (comparatively) reliable mechanism from which to draw any conclusions about the opinions of the people in a particular country.
That’s way too strong a claim. If that were true then it’s just complete random luck that all those election polls predict election results to within a few percent. I mean, are you really saying that this survey has no reliability at all? That the numbers could just have easily have been the other way around? Much depends, of course on how a poll is done, but to say that no poll has any reliability is just silly.
Cal: to me, in order to take a survey seriously, I need to do a non-trivial amount of research with regard to the pollster, the polled, the questionnaire, etc. That aside, in my opinion the biggest problem with political surveys is that, unlike in elections, the respondents do not feel that their “vote” has any practical consequences, so it is not unheard of for people to vote differently from what they answered in a survey, including to refrain from voting altogether (and the other way around, too).
It is my impression that some times they do, and some times they don’t. My impression may be incorrect, of course, but even if it is – yes, it may well be complete random luck. Don’t get me wrong, I am not dismissing surveys’ importance altogether, just taking them with a much larger grain of salt than I do formal elections (with the latter having their obvious drawbacks as well, of course, thus needing a non-trivial amount of salt to go with as well).
What you are saying then, would have been better expressed as “Formal elections are (comparatively) the *most* reliable mechanism”, rather than the “*only* reliable mechanism”.
I’ve had a closer look at the Pew survey. In Greece they surveyed 1000 adults, using ‘Multi-stage cluster sample stratified by region and urbanity’ methods. They talked to them face-to-face rather than using postal or telephone methods. There are, of course, still problems with such a method, but nowhere near the sort of problems you get with a postal survey with a low response rate. That sort of survey (which The Express used) can rarely be taken seriously. But I wouldn’t expect the results of the Pew survey to be radically out-of-whack with the views of the general populace.
What wasn’t reported in the media was that this survey took place in 2013. I suspect the percentage of Greeks who want to stay in the Euro will be lower now, possibly *much* lower.
>Formal elections is the only (comparatively) reliable mechanism from which to draw any conclusions about the opinions of the people in a particular country.
I’m not sure about that. It’s often a difficult task knowing what an election result means. For instance, was the Greek vote a rejection of the Euro? Or just a rejection of the terms of the bailout?
JohnK wrote:
>For what it’s worth, I have seen Syriza’s economic spokesman, Yannis Varoufakis, a few times on Paul Marks’s favourite programme, the Max Keiser show. He comes across as fairly sensible, and not a communist at the very least.
>
>As far as I can follow it, his plan is not to repudiate Greek debts, but to reschedule the payments until such time as Greece can afford to make them.
Which will, of course, be never.
>Given that the Greek economy has been crushed by 25%
Okay, so he meant reduced *by* a quarter, not reduced *to* a quarter, as he was quoted as saying: “Tragically our state became bankrupt and Europe decided to deal with this by placing the largest loan on the poorest shoulders on the condition that we would have to shrink our income to a quarter”.
Not that reducing your income was a condition of the loan! That wouldn’t exactly make sense — “I’m loaning this money to you on the condition that you empoverish yourself so much that you are unable to pay it back”. Perhaps what he meant was that the condition was that government spending should be cut, and he is unable to see (given that he is a left-winger from Greece) that government spending is not the same as general income.
>one can understand why its people resent foreign bankers having first dibs at their money.
Well, according to Tim Worstall the bankers have already suffered their losses on Greece. Most of the money owed now is owed to governments, or government-owned bodies:
timworstall.com/2015/01/27/well-no-ritchie-not-really/
Personally, I resent people from other countries having first dibs on my money. But I’d rather them default now than just be given more of my money indefinitely which they will never pay back.
Cal:
And if you had a job in Greece, would you want your salary to be in euros or drachmas?
Or if you were running a business in Greece (and Greece has a relatively large number of self employed people, i believe) would you want your customers to pay in euros or drachmas?
>And if you had a job in Greece, would you want your salary to be in euros or drachmas?
>Or if you were running a business in Greece (and Greece has a relatively large number of self employed people, i believe) would you want your customers to pay in euros or drachmas?
Do you mean now? Well, now I’d prefer Euros, because drachmas aren’t legal tender any more. Or after a default and Grexit and the return to the drachma? Drachmas, unless a customer or employer wants to give me more in Euros than the drachmas would be worth.
Yes, a default and exit from the Euro will be painful at first, and the Greek people will be even worse off to start with. But the idea that you’re going to keep minting it in using the Euro is looking rather tattered in Greece, isn’t it? The high worth of the Euro, and the failure of the EU to bite the bullet, are part of the reason why — not the only reasons, of course, but part of the reasons — why things are falling apart. If Greece left the EU then before long things will get better, as they did in Iceland. (Although they won’t get as good as things are in Iceland, because they’ll still be Greeks with the usual Greek government and public service.)
Interesting article here:
bloomberg.com/news/articles/2011-06-15/greece-ireland-can-t-default-like-iceland
Iceland’s Finance Minister says Greece shouldn’t copy Iceland, but the reasons aren’t convincing. Also note the quote at the bottom from Niall Ferguson:
“It’s 100 percent certain that Greece will default,” Harvard University History Professor Niall Ferguson said in a Bloomberg Television interview with Erik Schatzker and Deirdre Bolton yesterday. “The only question is what euphemism will be dreamt up to cloak the fact that it’s a default.”
Yes Cal, I accept your correction within the narrow point you were driving at. However, my point is somewhat different.
Indeed, that is why I didn’t mention any particular issues, only people’s opinions in general. What I am saying is that surveys do not give us a much better idea what people really think about those particular issues either. I take your point about this particular survey being more thorough than others, but the problems I mentioned still remain.
To try and summarize my point:
Surveys may tell us what some small number of people think about a particular issue at the time of the survey. If the survey is really professional and thorough, that small number of people may represent the entire population well enough. Or it may not – it is hard to tell for a non-professional.
Elections, on the other hand, give us less information on particular issues such as staying in the EU or not. But, they do give us much more information than surveys on the number of people subscribing to a certain way of doing things (i.e. their choice of politicians as based on their proclamations and past record).
Neither surveys nor elections though give us much info on the opinions of the silent majority/silent significant minority in a country. The voter turnout in these last elections in Greece was 65%, which is considered very high by Western standards. So what can we really learn from these elections? Well, that ~35% of the ~65% percent (less than a quarter?) of all adult Greeks who even bothered to vote, chose the Reds, while the remaining ~65% of the ~65% (less than a half?) chose some of the old business-as-usual drones that occupy the Greek political landscape (I am ignoring fringes such as Golden Dawn for convenience).
We know nothing about the opinions of the remaining 35% of the population who didn’t vote. I think that the kind of survey that could be really useful is one that would tell us about the demographics of both groups – those who turned out to vote, and those who didn’t. Such as: how many government employees, business owners, academics, welfare recipients, etc., are in each of these two groups? That would be the survey I would take more seriously than any other.
Cal:
As far as I can see, it is not Syriza’s plan to repudiate the debts Greece owes, but I feel it does make sense to renogotiate the payment schedule. After all, it took Britain 100 years to pay off its World War I debt.
I agree that Greek enthusiasm for EU and Euro membership seems quixotic. I think that for Greece, EU membership validates their status as a European democracy after years of Fascistic dictatorship. Britain is perhaps a more self-confident state in this regard.
Cal: sorry to bother you with a 3rd dispute when you alfeady have Alisa and JohnK, but if you would prefer to be paid in drachmas, even in Greece after Grexit, then, to speak plainly, you’re a sucker: your clients would be happy to dump drachmas on you, but would ask for euros when you buy from them. It’s called Gresham’s Law.
Of course they’ll still accept drachmas in lieu of euros … at the black market exchange rate.
It’s worse than that: if you accept drachmas, then your clients will delay payment as long as possible, knowing full well that if they pay you 1 month later, they’ll effectively be paying less. Should you demand immediate payment, they’ll delay buying from you as long as possible, for the same reason i delay as long as possible buying new computers or phones. Should you want to pay in drachmas otoh they’ll always demand immediate payment.
Should you get a job, your employer will pay you in drachmas, unless you have some unique skills which allow you to demand a salary denominated in real money. If your salary is in drachmas, you’ll find that life becomes more expensive every month, and in the worst case scenario, you’ll rush to spend your entire salary as soon as you receive it, buying gold if you can.
But why listen to me? just visit Greece after Grexit, and you’ll see what i am talking about.
The comparison to Iceland is wrong, because Iceland did not face a sovereign debt crisis: it faced a banking crisis. Even a comparison to Italy would be false, because Italy has a primary surplus, while Greece has a primary deficit:if Italy defaults, the Italian gov. can’t borrow, but it doesn’t have to; the Greek gov. is not in the same situation.
The right comparison is between Iceland and Cyprus, and if you look carefully, you’ll see that euro membership did not make much difference to Cyprus one way or the other.
NB: by using the expression “looking carefully” i implied disregarding the nonsense that Dan Hannan has written on this issue.
It is easy to lose sight of the woods for the trees here, and my gut reaction to this is that anyone lending money to a government deserves to lose everything lent, as they are bargaining on receiving future tax receipts and interest having strengthened the rapacious beast by lending it money, and the Greeks are entitled to say ‘Οχι’.
But what truly disgusts me is the mentality that says ‘We may borrow your money for our government spending and have the benefit of the waste, but not pay it back.‘ rather than ‘Don’t lend the bastards a dime more’.
JohnK:
>As far as I can see, it is not Syriza’s plan to repudiate the debts Greece owes, but I feel it does make sense to renogotiate the payment schedule. After all, it took Britain 100 years to pay off its World War I debt.
Sure there’s a lot of talk of ‘renegotiation’. But who believes that? Who believes that Greece will still be paying off these debts in 100 years? There’s no way they can.
>I agree that Greek enthusiasm for EU and Euro membership seems quixotic. I think that for Greece, EU membership validates their status as a European democracy after years of Fascistic dictatorship.
That seems to be it, but it’s still foolish, especially when everyone in Greece also seems to think that the EU has screwed their country.
Snorri Godhi:
>Cal: sorry to bother you with a 3rd dispute when you alfeady have Alisa and JohnK, but if you would prefer to be paid in drachmas, even in Greece after Grexit, then, to speak plainly, you’re a sucker: your clients would be happy to dump drachmas on you, but would ask for euros when you buy from them. It’s called Gresham’s Law.
>Of course they’ll still accept drachmas in lieu of euros … at the black market exchange rate.
I conceded that things will go badly after a Grexit. And if the drachma is doing really badly, and continually losing value, then yes, I would prefer to be paid in Euros, but for most Greeks that’s not going to happen. But in the longer run odds are that Greece will be better off than they will be should they stay in the EU. It’s not like things are going well now, is it? The country is in a terrible state, it’s basically bankrupt, it can barely pay its monthly bills, it has no prospects for long-term (or short-term, or medium-term) growth. It’s a basket case.
(I suppose one might say that they won’t be better off than in the scenario in which they stay in the EU, have a lot of their debt forgiven, get much more lenient repayment conditions, and don’t have to cut government spending. That’s what they seem to be hoping for.)
>Even a comparison to Italy would be false, because Italy has a primary surplus, while Greece has a primary deficit:if Italy defaults, the Italian gov. can’t borrow, but it doesn’t have to; the Greek gov. is not in the same situation.
The Greeks won’t be able to borrow for a while if they default, true, but it won’t be long before there are sources who will lend to them again. You’d think states that default wouldn’t be able to borrow again for decades, but that’s not what happens. (Possibly the Greek state will even learn to balance its books, but I don’t suppose that’s ever going to happen.)
Cal: there is no point in handwaving with me: i can see straight through it.
You have not addressed any of the reasons why i think you’re a sucker.
Besides, you obviously imply that it would be good for the Greeks if they can borrow again after Grexit, while i see the INability to borrow again as probably the main benefit of Grexit, for Greeks as well as for the rest of the world.
>Cal: there is no point in handwaving with me: i can see straight through it.
Impressive. Have you listed this on your CV?
>Besides, you obviously imply that it would be good for the Greeks if they can borrow again after Grexit
Nope, I don’t think that. You brought that point up — I thought that was what you were assuming.
>while i see the INability to borrow again as probably the main benefit of Grexit, for Greeks as well as for the rest of the world.
I agree. Not sure why you think I’m a fan of governments borrowing money.
Oy.
no, i use it to make an impression at job interviews.
Alisa: thanks for the link. I don’t know whether we shall laugh or cry.
Probably both.
Interesting link, Alisa. “But it will hardly help Alexis Tsipras’s case for a renegotiation over the debt if his key ally in government is . . . accusing Angela Merkel or Wolfgang Schauble of serving an evil cabal secretly directing world affairs to the detriment of the Greeks.” Really? Doesn’t everyone know that’s true?
Yes Snorri, by now I’m used to doing both simultaneously…