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Is Greece going to set off the long feared next wave of the Great Recession?

 
 
hawkeye10
 
  -1  
Reply Mon 20 Jul, 2015 11:42 pm
Quote:
Even economists with sympathy for Greece's cause, like the Nobel-Prize winning Paul Krugman, have expressed some dismay at the Tsipras government's handling of the crisis.

"They thought they could simply demand better terms without having any backup plan," Krugman told CNN's Fareed Zakaria. "So, certainly this is a shock."

"But, you know, in some sense it's hopeless in any case ... I mean, the new terms are even worse, but the terms that they were being offered before were still not going to work. So, I, you know -- I may have overestimated the competence of the Greek government."

Varoufakis said he agreed entirely with Krugman, "however shocking that may sound to you."

"It's not true we did not have a Plan B. We had a Plan B."

"We, in the Ministry of Finance, developed it. Under the egis of the Prime Minister, who ordered us to do this, even before we came in the Ministry of Finance."

"Of course, you realize that these plans -- Plan Bs -- are always, by definition, highly imperfect, because they have to be kept within a very small circle of people, otherwise if they leak, a self-fulfilling prophecy emerges."

That plan, he said, was not for Greece to leave the Eurozone, a Grexit, but rather for the government to create "euro-denominated currency" -- in other words, for the government to print its own, temporary currency, pegged to the value of the euro.

http://www.cnn.com/2015/07/20/world/amanpour-greece-yanis-varoufakis/?ref=yfp

This would be the IOU that was often talked about, and if they did not have another currency ready to go and if the EU bosses would not approve more Euro's going to Greece that was the only thing to do.

But plan B by definition had to be what to do if they could not reach a deal to stay in the Eurozone. "IOU EURO's" does not quite cut it.

And plan B would have required the Russians or someone to capitalize the banks, something that never seems to have been arranged.
hawkeye10
 
  -1  
Reply Tue 21 Jul, 2015 12:05 am
@hawkeye10,
Quote:
The date 23 April 1985 was a momentous day in the life of the Coca-Cola corporation. For years, the company had been planning a new drink to see off the challenge from Pepsi. There was no expense spared for Project Kansas.

“New” Coke (as it was dubbed) bombed. The company responded with alacrity. It didn’t say consumers were wrong. It didn’t say that given time New Coke would be a success. It didn’t plough on simply because it had invested heavily in Project Kansas. Instead, it recognised that there was only one option: to go back to the traditional formula. This returned to the shelves on 11 July 1985, within three months of “New” Coke’s launch.

There is a lesson here for both businesses and policymakers – and European policymakers in particular. Sixteen years after its launch, it should be clear even to its most die-hard supporters that the euro is New Coke.


http://www.theguardian.com/business/economics-blog/2015/jul/19/the-euro-the-new-coke-of-currencies

Interesting theory....



The difference of course is that "New Coke" was the result of years of research, when management launched it they had sound reasons to believe that they had done the right thing, that they had just transformed the company to be ready for the next 100 years. The Euro on the other hand was always half baked, and those who push it have always been allergic to telling the people the truth about this.
hawkeye10
 
  0  
Reply Wed 22 Jul, 2015 07:40 pm
@hawkeye10,
Quote:
The Greek newspaper To Vima reported earlier this week that Tsipras had asked Putin for a $10 billion loan so that Greece could transition back to the drachma. If it reintroduced the national currency, it would need foreign reserves to back it up, and Greece was out of euros. According to the report, Russia floated the idea of a $5 billion advance on the construction of a gas pipeline through Greece, a branch of the Turkish Stream project that Russia and Greece agreed to build in June.

To Vima is a reputable newspaper with good political sources, so 17 legislators from the opposition New Democracy party have officially asked Tsipras whether the report was true. The prime minister probably will deny it, as the Kremlin did Wednesday. Putin's press secretary, Dmitri Peskov, told the news agency Interfax that "the Greek leadership never asked Russia for help." Still, if the report were true, it would tie up a few loose ends.

http://www.bloombergview.com/articles/2015-07-22/did-putin-sell-out-greece-?cmpid=yhoo&ref=yfp

Ya, it would mean that the Greek Government was working to get the Greeks off of the Euro, it would mean that they all along had a plan, and it would mean that they could not pull it off and so they fell on their swords.....they made themselves look incompetent even when they were not, they were working towards doing the best they could f0r Greece.
0 Replies
 
hawkeye10
 
  0  
Reply Fri 24 Jul, 2015 02:27 pm
Quote:
In terms of foreign policy, Germany rebuilt trust by embracing Western integration and Europeanization. The power at the center of Europe should never again become a threat to the continent or itself. Thus, the Western Allies' aim after 1945 -- unlike after World War I -- was not to isolate Germany and weaken it economically, but to protect it militarily and firmly embed it politically in the West. Indeed, Germany's reconciliation with its arch-enemy, France, remains the foundation of today's European Union, helping to incorporate Germany into the common European market, with a view to the eventual political unification of Europe.

But in today's Germany, such ideas are considered hopelessly "Euro-romantic"; their time has passed. Where Europe is concerned, from now on Germany will primarily pursue its national interests, just like everybody else.



But such thinking is based on a false premise. The path that Germany will pursue in the 21st century -- toward a "European Germany" or a "German Europe" -- has been the fundamental, historical question at the heart of German foreign policy for two centuries. And it was answered during that long night in Brussels, with German Europe prevailing over European Germany.

This was a fateful decision for both Germany and Europe. One wonders whether Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble knew what they were doing.
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.
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The foundation of the second, unified German nation-state in 1989 was based on Germany's irrevocable Western orientation and Europeanization. And the Europeanization of Germany's politics filled -- and still fills -- the civilization gap embodied in German statehood. To allow this pillar to erode -- or, worse, to tear it down -- is a folly of the highest order. That is why, in the EU that emerged on the morning of July 13, Germany and Europe both stand to lose.

http://www.huffingtonpost.com/joschka-fischer/return-of-the-ugly-german_b_7865468.html?ncid=txtlnkusaolp00000592&ref=yfp

Joschka Fischer was a German foreign minister and vice chancellor from 1998-2005

Pretty clearly not....Merkel and her crew get a lot of deserved credit for reading the German people well, but it sure looks like she does not understand Europe, she does not understand that the trauma that the Germans have inflicted on Europe over the years still matters to Europe. Alarmingly I am not detecting in the German press that the Germans have any understanding on what they have just done, of how hard it is now going to be to keep the Europe Project together going forwards now that the Germans have taken to threats and the use of hard power big time. 50 years of work to change the dynamics of Europe away brute force have just been undone.
0 Replies
 
hawkeye10
 
  0  
Reply Sun 26 Jul, 2015 01:15 pm
The Greeks are nuts...you cant reopen the banks for normal business when everyone keeps talking about greece going off the Euro. And the economy dies of you dont reopen the banks.

This mess is far from over.
0 Replies
 
ehBeth
 
  1  
Reply Fri 21 Aug, 2015 03:09 pm
pm has stepped down
called an election
new far left party is in the process of being formed

yup that'll all be good for the recovery of the economy

Chinese economy not so hot, so no money coming from them.
Russian economy suffering as a result of oil prices tanking. They can't/won't help.

Friends were just in Greece. Almost couldn't get back on the weekend. The Greek airline they thought they'd support only has two planes and may not have had enough money for fuel - didn't tell passengers there would be no flight til about 6 hours after it was due to depart. They finally got back about 2 days late.
hawkeye10
 
  0  
Reply Fri 21 Aug, 2015 03:34 pm
@ehBeth,
Nobody knows how bad the Greece economy has been hurt these last months, though it seems a lot. The main issue is that now there is no one who believes in the plans going forwards, a secondary issue are the invading Muslim Hordes, a third is that the nation has already suffered so much wealth and brain drain that there is nothing to work with in trying to rebuild.
georgeob1
 
  1  
Reply Fri 21 Aug, 2015 06:32 pm
@hawkeye10,
The damage to the Greek economy has been accumulating for several decades under corrupt governments that accumulated unsustainable debt loads to finance the social welfare probrams they used to keep themselves in power, and a highly reculated economy that they used to enrich themselves and their supporters through crony deals and bribery.

The added damage that occurred over the past months is substsantial, but small compared to the problem that has been growing for the past four decades (at least). It was the price of the denial of the Greek populace and ruling parties about the reality of their situation. It has proven hard to persuade northern European countries to subsidize public pensions in Greece that are more generous than their own. That's not likely to change. One can hope that now the Greek people will focus on their own economic productivity as the only reliable solution to their chronic problems.

I don't know what else Germany could have done in these circumstances. The Spanish, Italian and French economies have their own problems as well, and there was real danger the contagion could spread. I believe French President Hollande was only too happy to stand in Merkel's shadow making sympathetic but empty gestures toward the Greeks while knowing that the rest of Europe doesn't have the ability to subsidize the Greeks any longer, while Germany certainly doesn't have the ability to bail them all out if present trends continue. The piper had to be paid, and the price the next time will be much higher. Perhaps now the Spanish recovery will continue and even the Italians and French might get the message.
hawkeye10
 
  0  
Reply Fri 21 Aug, 2015 06:34 pm
@georgeob1,
Greece is going to fall apart. This is going to be a problem for those who still have EU dreams. Germany is going to be seen as clubbing Greece to death. THis will have consequences.
georgeob1
 
  1  
Reply Fri 21 Aug, 2015 06:58 pm
@hawkeye10,
You may believe that, but many others don't. You can't forsee the future anymore than can others., and your categorical statements are very far from self evidently true.

Moreover you clearly haven't considered the consequences of yet another bailout for the Greeks. Spain would have been next in evicting a reform government and undoing the recovery now underway. That would have soon enough would required far more money from an EU that could sustain. Then the Italians, and then ......
hawkeye10
 
  0  
Reply Fri 21 Aug, 2015 07:07 pm
@georgeob1,
georgeob1 wrote:


Moreover you clearly haven't considered the consequences of yet another bailout for the Greeks. Spain would have been next in evicting a reform government and undoing the recovery now underway. That would have soon enough would required far more money from an EU that could sustain. Then the Italians, and then ......


That is an argument for ending the Euro, that does not justify clubbing the Greeks.

Dont worry, Merkel made the same mistake as you so you are in good company.

Quote:
You may believe that, but many others don't. You can't forsee the future anymore than can others., and your categorical statements are very far from self evidently true.
Actually I do foresee the future fairly well, the ability to do so is a by product of education, and I am much better educated than most.
georgeob1
 
  3  
Reply Fri 21 Aug, 2015 07:25 pm
@hawkeye10,
hawkeye10 wrote:

Actually I do foresee the future fairly well, the ability to do so is a by product of education, and I am much better educated than most.


Then surely you know that the future state of highly non-linear dynamic systems (such as human affairs and politics) is in general unknowable. Unfortunately it appears you don't understand this.

I would be glad to compare credentials with you. However, I don't think that counts for very much anyway. I have found that the most important distinguishing traits of the very wise is an acute awareness of the limitations of their own knowledge and a healthy respect for the complexity of events.
hawkeye10
 
  0  
Reply Fri 28 Aug, 2015 12:21 am
Quote:
Despite all the broken promises, despite the "no" vote on the austerity diktat that Tsipras would transform into a "yes" vote only a few days later, like some magician pulling a rabbit out of the hat, surveys showed 70 percent of Greeks supporting the deal, which they consider to be "necessary and without alternative." Sixty-eight percent say they would vote for Tsipras again if there were new elections. Polls also suggest he would be able to govern without a coalition partner.

Those are astonishing figures for a prime minister under whose watch the banks had to be shuttered because they were threatened with collapse. Under whom capital controls had to be introduced, limiting daily withdrawals by Greeks to €60. Furthermore, the Greek economy hasn't been in this bad a shape at any other point since the start of the crisis five years ago. After one and a half years of consolidation, the economy has fallen back into recession and is shrinking rapidly.

Tsipras' Masterpiece

The fact that he isn't being loudly criticized and that he managed to get 61 percent of Greeks to back him in the July 5 referendum is Tsipras' political masterpiece. He had pitted "democracy against the Troika" as he often stated. It was a demonstration of power and at the same time a slap in the face of the Europeans. It's possible they underestimated Tsipras because he had always come across as being so polite and reserved. But Tsipras also tested the limits and had no qualms about crossing the line.

"The Greek people will defend themselves against an ultimatum with a big no," he announced prior to the referendum. At the same time, he said, this no would also be a "big yes to European solidarity." These kinds of dialectics might be difficult for officials in Brussels to understand, but the Greeks clearly comprehend them. In any case, Tsipras was able to take the defiant no of his compatriots to increased austerity and, despite this breathtaking turn-around, turn it into a yes within a week without being written off as traitor.

http://www.spiegel.de/international/europe/greek-prime-minister-tsipras-shows-greeks-he-can-save-them-a-1044265.html

Not too shabby, for an alleged clown.......
0 Replies
 
oralloy
 
  0  
Reply Fri 28 Aug, 2015 04:25 am
@hawkeye10,
hawkeye10 wrote:
Greece is going to fall apart. This is going to be a problem for those who still have EU dreams.

Are US banks still issuing "insurance" on Greek debt? It might be a problem for those banks if they suddenly have to pay up.


hawkeye10 wrote:
Germany is going to be seen as clubbing Greece to death. THis will have consequences.

Consequences with who?
0 Replies
 
ehBeth
 
  2  
Reply Fri 28 Aug, 2015 07:42 am
@ehBeth,
ehBeth wrote:
Friends were just in Greece. Almost couldn't get back on the weekend.


http://www.chch.com/passengers-stranded-as-skygreece-shuts-down/

Quote:
SkyGreece Airlines is blaming the Greek economic crisis as well as technical issues with its only plane, which remains parked at Pearson in Toronto, according to airport officials.

Last week passengers were left waiting four days in Toronto for their flight to Athens. This week the flight was cancelled completely without warning.

Passengers say there’s been no communication, and that after one night they were forced out of their hotels because SkyGreece was no longer paying the bill.

Walter Hinteler
 
  1  
Reply Fri 28 Aug, 2015 08:45 am
@ehBeth,
SkyGreece ne répond plus (SkyGreece unresponsive):
"The fate of SkyGreece, a small airline launched this spring by Canadians of Greek origin remains mysterious. [...] The management of SkyGreece made no statement about the company's condition. SkyGreece has disabled its Facebook and Twitter accounts. [...]Four Canadian businessmen of Greek origin, Bill Alefantis Ken Stathakis, Nicholas Alexandris Chilakos and Peter, founded SkyGreece." [My translation.]



Stranded Passenger Shares SkyGreece Nightmare— Still Ongoing:
Quote:
[...]
Employees from SkyGreece were nowhere to be found. And countless attempts to phone the company’s Athens office went unanswered.

More than a day later, dozens of stranded passengers turned to social media to vent their frustration and Despina reached out to one of the founders, Fr. Nicholas Alexandris, via Facebook messenger. The priest respond, telling Despina that he resigned from the board two weeks ago and offered the phone number of the “main shareholder” and “president” Mr. Ken Stathakis.
0 Replies
 
cicerone imposter
 
  1  
Reply Fri 28 Aug, 2015 02:45 pm
@georgeob1,
Good post, george; when there are so many variables that's in flux, it's impossible to predict.
Foofie
 
  0  
Reply Sat 29 Aug, 2015 01:17 pm
@cicerone imposter,
cicerone imposter wrote:

Good post, george; when there are so many variables that's in flux, it's impossible to predict.


It's never possible to predict, based on the proverbial Black Swan event that no one imagined could occur. All one can do is base one's possible predictions on percentages of chance. Predictions are just handicapping, like the horses.
0 Replies
 
ehBeth
 
  1  
Reply Fri 2 Mar, 2018 02:58 pm
Almost three years later. Is Greece still there?
cicerone imposter
 
  1  
Reply Fri 2 Mar, 2018 05:33 pm
@ehBeth,
Quote:
Greece - Economic forecast summary (June 2017) After a prolonged depression, the economy stabilised in 2016 and GDP is projected to grow by 1.1% in 2017 and 2.5% in 2018. The labour market is improving, supporting private consumption, and higher demand from abroad is boosting exports.
Greece - Economic forecast summary (November 2017 ...
www.oecd.org/eco/outlook/greece-economic-forecast-summary.htm
0 Replies
 
 

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