The March of the Sovereign Debt Crisis

[eborr]

The rush to blame the Greeks by Germans and others is wholly reprehensible, the reality is that one group of greedy rich people borrowed money from another group of greedy rich people, and throughout Europe the poor are having to pay the price.

Which brings another notion to mind, when you make an investment you take a risk - that's why interest gets paid, sometimes as a lender you make a mistake and the debt cannot be repaid - this is the debt the lenders made when they lent the money to the morally and probably fiscally bankrupt politicians running Greece - What the Germans especially need to to is suck it in, and remember the Marshall plan which helped Germany to rebuild via investment, not austerity, and apply the same model to Greece, show some trust in the Govt which has been elected by the Greek people and give them a fighting chance.

Let's now move on to the Euro, which in principle I strongly support, but the execution of the programme was entirely flawed. The value of the Euro was set to meet with Germany's requirements, and to keep German products artificially competitive, the French supported it for political reasons, eg they wanted a currency to rival the dollar and the pound. The consequence for this was that in the poorer countries of southern Europe especially Portugal and Greece, the cost of living rose by between 20% and 25% over night, it most cases wages didn't, so a classic case of an uncontrolled rise in profits and dividends and a dramatic fall in living standards

In order to preserve civil society the Greek government took the decision to raise pensions and other state benefits to match the rise in prices, which together with the on-going problems the Government had in collecting revenue created the current unsustainable state.

None of this was helped by the Athens Olympics - which even a well managed country has difficulty funding. Needless to say German companies amongst others, aided by corrupt practice benefited hugely, Daimler, Ferrostahl, and Siemens have been either criticised or prosecuted in this context. Angela Merkel is remarkably quiet about this .

http://www.corpwatch.org/article.php?id=15740

I have had the stuff about the C4i business independently confirmed to me by Greek Executives who were in on this scheme, although they blamed Government delays for the tech not working

[Impenitent]

This interview with former Greek Finance Minister Varoufakis is very interesting.

http://www.newstatesman.com/world-affai ... ttle-save-

...there was point blank refusal to engage in economic arguments. Point blank. … You put forward an argument that you’ve really worked on – to make sure it’s logically coherent – and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply. And that’s startling, for somebody who’s used to academic debate. … The other side always engages. Well there was no engagement at all. It was not even annoyance, it was as if one had not spoken.

[Tyrhael]

That interview is indeed interesting; thanks for sharing it!

I'm curious what others think about this Time article: Greece May Have to Sell Islands and Ruins Under Its Bailout Deal:

Of all the aspects of Monday’s bailout deal that Greeks found humiliating, nothing drilled into their sense of pride quite like their government’s promise to sell off “valuable Greek assets” to the tune of 50 billion euros. The seven-page agreement, which European leaders thrashed out over the weekend, made no mention of where Greece is supposed to find that much property to sell. But as they scrambled for options, officials in Athens saw no way around the blood-curdling prospect of auctioning off Greek islands, nature preserves or even ancient ruins.

“It’s an affront,” says Georgios Daremas, a strategist and adviser to the Greek Ministry of Labor, Social Security and Social Solidarity. “It’s basically saying sell the memory of your ancestors, sell your history just so we can get something commercial for it,” he tells TIME on Monday. “This is an idea to humiliate Greeks.” [...]

There are, of course, limits to the privatization of ancient artifacts. The treasures of Greek antiquity, such as the Acropolis in Athens, would never be sold, Daremas says. “That’s impossible. Their value is immeasurable.”

The idea of selling the Acropolis came up early in Greece’s debt crisis. In 2010, two conservative German lawmakers caused a furor in Greece by suggesting that ancient ruins should not be off limits to privatization. “Those in insolvency have to sell everything they have to pay their creditors,” Josef Schlarmann, a member of Chancellor Angela Merkel’s political party, said at the time. Since publishing those remarks, the Bild newspaper, Germany’s most popular tabloid, has continued to irritate Greeks by asking why the Acropolis cannot be sold to repay debts to Germany. [...]

I hadn't considered it, and think I'm opposed (out of an emotional kneejerk reaction), though that may not be logical. Do you think this is reasonable?

[Primula Baggins]

I've been to the Acropolis. I've walked through the Parthenon. I was a child then, but the memory is very strong. And my negative reaction is way too strong to describe as "kneejerk." Some things are just wrong. The Acropolis is a fundamentally Greek treasure, but the Greeks hold it in trust for the world. If they sell it to some corporation or some cabal of billionaires, will it be priced out of reach for ordinary visitors? Or even locked away as a private playground? I would not be a bit surprised.

The United States might as well contemplate selling the Grand Canyon to a private concern.

[tinwë]

The United States might as well contemplate selling the Grand Canyon to a private concern.

Please, don't give them any ideas.

[yovargas]

Too late. Well, not quite selling it but:

The Grand Canyon Is Getting A Mall

[Faramond]

Just leave the Euro already, Greece. What was the point of that referendum? Just another opportunity for the citizens of a European country to vote one way and then have the EU pretend it never happened? Democracy in Europe is dead, apparently.

The club that Greece wants to stay in just isn't worth it. They should really stick it to their creditors at this point. To be sure Greece made this mess themselves, with their crazy pension system and all the useless government jobs they handed out. And so what were people thinking lending them money?

What's the point of selling the Acropolis if it doesn't help fundamentally reform your economy? Sure maybe you can pay off some debt today but without a fundamental change in Greece there will just be more debt tomorrow. Of course selling it would be disgrace. They should quarry some stone somewhere shape it into vaguely ruin-shaped pieces and start selling them on ebay as pieces of the "true Acropolis". Those pieces would have about as much true value as Greek bonds.

The question is does Greece want to be run by themselves, or run by unelected elites in Brussels? If they ditch the Euro they can give the bankers a haircut by defaulting on their debt or devaluing their currency or both. Make the bankers have a little bit of austerity. Whatever happens they need to ditch the entitlement mentality that led to the bloated pension system and cushy worthless government jobs and the crushing debt. That's going to ruin them in any currency, under any government.

[eborr]

The thing is this is that most of us are run by unelected elites, business people who have the politicians in their hands, not by anything as crude a gross cash bribes, but by patronage and behind the scenes influence.

Sorry Faramond, when I hear guff like "entitlement mentality" all it proves is that you have been suckered too, as I explained above the rise in the pension system has to be seen in the context of the Euro which effectively increased the cost of living for many people by 20%.

I am fortunate in having spent quite a lot of time in Athens doing business over the last 15 years to have seen Greek companies operating, and by and large they are like businesses elsewhere in Europe, with the caveat that most Greek business are rather sharper and better company than most of their western European counter-parts. Certainly the choice of spending an evening with the Greeks or the Brits is an easy one. An evening amongst liberal intellectuals is far more fun(although they do have a blind spot about all things Turkish) , than talking to the dolts whose conversation stretches no further than the last golf game or the problems they are having with their time share in Marbella.

And as for taking the acropolis- that would be sacrilege of the worst possible kind. Almost every night I spend in Athens, I take a walk up the side of the acropolis, starting by the Theatre of Dionysus, past the Roman odeon, then up to the main gate, I rarely go in and instead follow the path around the hill before clambering up the Aereopagus rock for a view of the city spreading below, then I follow the path round the other side of the hill down into the Agora, before circling back to mix great and trashy stuff that is the Plaka.

Maybe it's time for the American's to ask the Germans to pay back the debts they accrued as part of the Marshall Plan

[Faramond]

eborr, you can justify the rise in the pension system however you want, but the bill is going to come due and the creditors will want to be paid. You can call that guff if you want but it's also just economic reality.

Greece shouldn't have joined the Euro if it was going to raise the cost of living without leading to wages rising at the same time. The EU shouldn't have let Greece into the Euro if its budget wasn't in shape for it. Appealing to past history such as what happened in WWII and the aftermath isn't going to make the bonds of today go away. I mean, as far as I know there are no American holders of bonds related to the Marshall plan? What does that have to do with anything, really? Only defaulting will make those bonds go away, and that would mean leaving the Euro, of course.

The thing is it's really not about morality or what's right or even ideology. It's just about getting the economy working again, getting the people working again on productive things. Greece should do whatever it takes to follow that course.

I think one could argue that Europe has a moral obligation to help Greece after letting them in the Euro without proper vetting. But that help is would be meaningless without structural reform in the economy.