Greece lurches violently to the left

[IC1967]

Oh dear. Greece has voted with its heart instead of with its head. Syriza has promised  a brave new dawn where austerity will end. They plan to increase the minimum wage, employ 1000's of civil servants, increase taxes and to increase welfare benefits. They also don't want to pay back their debts amongst other things. Typical leftie drivel.

Its not going to be a pretty sight in Greece watching these lefties totally destroy the country and with it hasten the demise of the EU. So at least some good will come out of it.

All I would say to any country is, live within your means. If you wildly overspend on borrowed money you need to realise their will be a payback time. Greece has been experiencing its payback time and its going to get a lot worse for them now.

Thanks to Labour we too are in a very precarious position. It wouldn't take much to turn us into 'Greece'. We need to cut back savagely on the state and start to live within our means. If we don't, then I suggest we keep a close eye on what happens in Greece because that will be our future too.

[coventryrover]

WELL DONE GREECE

[The Red Baron]

I'm no leftie but if I was a Greek voter I'd have been tempted to vote for them or the lot that has formed a coalition with Syriza.

There is no future for Greece in the euro and for me it is just a question of how their exit can be managed.

[IC1967]

I'm no leftie but if I was a Greek voter I'd have been tempted to vote for them or the lot that has formed a coalition with Syriza.

There is no future for Greece in the euro and for me it is just a question of how their exit can be managed.

I can understand that. The problem is that Syriza still want to stay in the Euro. That is madness. They'd be far better off defaulting on their debts and starting off again with their own currency.

[The Red Baron]

I'm no leftie but if I was a Greek voter I'd have been tempted to vote for them or the lot that has formed a coalition with Syriza.

There is no future for Greece in the euro and for me it is just a question of how their exit can be managed.

I can understand that. The problem is that Syriza still want to stay in the Euro. That is madness. They'd be far better off defaulting on their debts and starting off again with their own currency.

They can't follow the economic policies they advocate AND remain in the euro. So something will have to give.

[BillyStubbsTears]

TRB

There is an alternative path. The utterly mad policy of the EZ to date has been to combine tight monetary and tight fiscal policy. That is what has ground the EZ economies to a halt. But it's only been possible for the ideological obsessives like Olli Rehn and Wolfgang Schauble to push through this kind of policy because the populations of the EZ countries were prepared to accept them.

It doesn't HAVE to be like that. Draghi (one beacon of sanity in the EZ) has finally pushed through QE, which is a start. The other issue, the utterly mad insistence on countries getting back to near fiscal balance in just a few years is a political choice. It can just as easily be unchosen. If enough people in the EZ countries  demand it.

Germany has been holding a loaded gun to the heads of the Greek people for 4 years, saying "Do it this way, or you're out of the Euro and on your own". It's a bluff. It's worked till now, but now the bluff has been called. I suspect this, and last week's QE are the first steps towards bringing down the insane policies behind the Euro, and replacing them with something closer to economic orthodoxy.

We'll see.

[The Red Baron]

I think that is a reasonable way to look at it, BST. Either the Eurozone continues on its current path, with a likely Greek default, or they modify it to adapt to the changed political circumstances.

Voting in Syriza has given the Greeks some influence over EZ policy. That's why I say if I was a Greek I would probably have voted for them.

[BillyStubbsTears]

TRB

I agree 100%. The fascinating thing now will be to see if the anti-austerity parties in other EZ countries are strengthened.

For the record, I have no flag to fly for the people who put Greece into this situation. Greece was the one and only case where politicians truly WERE obscenely profligate and mendacious in the years before the crash. It didn't happen anywhere else in Europe, and the smashed public finances in other countries were all due to bailing out over-leveraged private sectors.
But that's now gone. And the rest of the EZ bears equal responsibility for devising a currency where it was possible for a country to run up such a public sector debt. Germany still wants to play this as a morality tale, where there are consequences for actions. But economics is not like that. It's a messy, pragmatic issue, where you compromise to get the least bad outcome. Greece has now turned the gun back at Germany and is asking them if they REALLY want to run the risk of bringing down the whole Euro by sticking to their morality case.

Interesting times.

[scaley back rover]

Does this mean its closer to Italy and further away from Cyprus?😄

[Filo]

Good on Greece, it's about time some one called Germany's bluff, have you got the b*llocks Merkel?

[The Red Baron]

Surely the real problems will start if Mrs M DOES have the b*llocks, so to speak, to dismiss the Greek vote?

I suppose the other question is whether the EZ could survive a Greek default and exit. The reaction of the markets suggests that is considered a possibility at least. However, that would then raise the possibility noted by some on the Right that Greece might do better economically outside the euro. This could persuade others to follow their lead. Then the EZ would really be dead in the water.

[Filo]

Surely the real problems will start if Mrs M DOES have the b*llocks, so to speak, to dismiss the Greek vote?

I suppose the other question is whether the EZ could survive a Greek default and exit. The reaction of the markets suggests that is considered a possibility at least. However, that would then raise the possibility noted by some on the Right that Greece might do better economically outside the euro. This could persuade others to follow their lead. Then the EZ would really be dead in the water.

Makes you grateful that we kept the pound and bailed out of the ERM

[BillyStubbsTears]

It really makes me laugh how Germany plays the role of the morally indignant guardian of fair play in this whole scene.

There are two reasons why Germany should be utterly ashamed of its behaviour.

Firstly, they have collectively forgotten that West Germany was the recipient of the greatest write off of debt in history, when America and Britain decided that they had to create a strong Germany as a bulwark against the Soviets.  The Germans have a national myth that they re-built their country from the ashes of WWII by their own sweat and ability. But they were given a huge leg up by the debt write off. And they had far less moral right to that than Greece does now, given their collective crimes in WWII.

Secondly, the EZ has a collective inflation target of just under 2%. In an era where the peripheral countries are being forced into deflation, it is imperative that a strong economy like Germany has higher inflation to keep the whole EZ average at the right level. The peripheral countries played this role when Germany was struggling in the late 90s. They ran high inflation for several years. It has been Germany's turn to re-pay the favour over the last few years and they have utterly refused to do so. By screwing down their own inflation, they are depriving the whole EZ of growth and markets. It is a criminally stupid and morally repugnant policy.

And they then tell themselves that it is everyone else who is not playing fair.

[Filo]

It really makes me laugh how Germany plays the role of the morally indignant guardian of fair play in this whole scene.

There are two reasons why Germany should be utterly ashamed of its behaviour.

Firstly, they have collectively forgotten that West Germany was the recipient of the greatest write off of debt in history, when America and Britain decided that they had to create a strong Germany as a bulwark against the Soviets.  The Germans have a national myth that they re-built their country from the ashes of WWII by their own sweat and ability. But they were given a huge leg up by the debt write off. And they had far less moral right to that than Greece does now, given their collective crimes in WWII.

Secondly, the EZ has a collective inflation target of just under 2%. In an era where the peripheral countries are being forced into deflation, it is imperative that a strong economy like Germany has higher inflation to keep the whole EZ average at the right level. The peripheral countries played this role when Germany was struggling in the late 90s. They ran high inflation for several years. It has been Germany's turn to re-pay the favour over the last few years and they have utterly refused to do so. By screwing down their own inflation, they are depriving the whole EZ of growth and markets. It is a criminally stupid and morally repugnant policy.

And they then tell themselves that it is everyone else who is not playing fair.

Germany's ambitions remain the same as before WW2, they failed to dominate Europe by force, so now they try the political way, like I said earlier, will Merkel have the b*llocks to tell Greece to get on with it? I doubt it, it would probably destroy Germany's aspirations again!

[The Red Baron]

It really makes me laugh how Germany plays the role of the morally indignant guardian of fair play in this whole scene.

There are two reasons why Germany should be utterly ashamed of its behaviour.

Firstly, they have collectively forgotten that West Germany was the recipient of the greatest write off of debt in history, when America and Britain decided that they had to create a strong Germany as a bulwark against the Soviets.  The Germans have a national myth that they re-built their country from the ashes of WWII by their own sweat and ability. But they were given a huge leg up by the debt write off. And they had far less moral right to that than Greece does now, given their collective crimes in WWII.

Secondly, the EZ has a collective inflation target of just under 2%. In an era where the peripheral countries are being forced into deflation, it is imperative that a strong economy like Germany has higher inflation to keep the whole EZ average at the right level. The peripheral countries played this role when Germany was struggling in the late 90s. They ran high inflation for several years. It has been Germany's turn to re-pay the favour over the last few years and they have utterly refused to do so. By screwing down their own inflation, they are depriving the whole EZ of growth and markets. It is a criminally stupid and morally repugnant policy.

And they then tell themselves that it is everyone else who is not playing fair.

Germany's ambitions remain the same as before WW2, they failed to dominate Europe by force, so now they try the political way, like I said earlier, will Merkel have the b*llocks to tell Greece to get on with it? I doubt it, it would probably destroy Germany's aspirations again!

Filo- you are the ghost of Nicholas Ridley and I claim my £5.

[River Don]

I would have voted Syriza. The debt in Greece is worse now than it was in 2010. The country is failing badly. They have kids turning up for school with malnutrition. In Europe.

There needs to be a serious change in the EU towards Greece or Greece has to get out. Either way it's going to take a party like Syriza to focus minds on the problem.

[jonrover]

I would have voted Syriza. The debt in Greece is worse now than it was in 2010. The country is failing badly. They have kids turning up for school with malnutrition. In Europe.

There needs to be a serious change in the EU towards Greece or Greece has to get out. Either way it's going to take a party like Syriza to focus minds on the problem.

There are kids turning up to school  in  the UK with malnutrition thanks to the nasty vindictive policies of the Tory led coalition. I cannot name the school as I am unable to but there are kids in our own town where one of my friends works as a HLTA where kids are leaving school in tears because they know there will be bare cupboards and no heating when they get home, due to both parents getting next to no hours on zero hours contracts. That is the net result of austerity. Well done to Greece for voting to hopefully end it. Its a shame Labour won't set a manifesto to lead us down the same path. It can be done, and it  would be very popular. It just takes the political will to adopt it.

[IC1967]

There is no way Syriza is going to be successful. They want to stay in the EU and keep the Euro. Despite not having any money they want to increase the public sector, increase welfare benefits etcetera. Where do they think they are going to get the money?

What planet are they living on? The Euro is a flawed concept. It is only a matter of time before it collapses. The EU is run predominantly for Germany's benefit. It is only a matter of time before that collapses as well.

Why on earth can't they see that they have still got many years ahead of them of economic pain? They overspent massively. They have to suffer the consequences and the Germans will make sure they do. There is no way they are going to let Greece off its debt because Spain, Italy, Portugal, Ireland etc. will also want a piece of the action.

It's time someone in Greece realised that they need to be out of the Euro and EU. Only then can they start to rebuild their economy.

Leftie politicians promising to spend money they haven't got is only going to make matters worse when the population realise it is unachievable. It really makes my piss boil that the only solutions to economic problems that lefties can come up with is to spend, spend, spend. Idiots.

[River Don]

Greece is never going to be able to repay its debt. The austerity hasn't been working, things have just been getting progressively worse.

Either Germany accepts it's going to have to find a way to write off a big chunk of the Greek debt or just let the country go. The mood music on the news recently is that Germany is now relaxed about Greece leaving the EZ...

[BillyStubbsTears]

Germany is playing bluff with the Greeks. They are trying to put the frighteners on Tsipras by saying, "You don't want to pay your debt? Fine. There's the door to the Grexit."

It's classic negotiating tactics. Let your opponent think he's run out off the edge of the cliff.

In reality, neither side wants Greece out if the Euro. It would be a mad gamble for Germany (if a Greece, why not Portugal? Spain? Italy? The genie would be out of the bottle and no-one would know where it would end. But that doesn't mean they don't start with a very hard position .

Similarly, Tsipras knows damn well he's not going to be able to get the whole Greek debt written off AND be able to stay in the Euro. But that's his opening gambit.

Pound to a pinch of dogshite says there'll be loads of public-eye posturing, and a messy but workable compromise reached in the backrooms, where effectively Greece is given till the end of time to repay its debt.

Which is actually the deal that the Allies cut for Germany in 1953. As I'm sure Tsipras will remind everyone around the negotiating table.

[IC1967]

Germany is playing bluff with the Greeks. They are trying to put the frighteners on Tsipras by saying, "You don't want to pay your debt? Fine. There's the door to the Grexit."

It's classic negotiating tactics. Let your opponent think he's run out off the edge of the cliff.

In reality, neither side wants Greece out if the Euro. It would be a mad gamble for Germany (if a Greece, why not Portugal? Spain? Italy? The genie would be out of the bottle and no-one would know where it would end. But that doesn't mean they don't start with a very hard position .

Similarly, Tsipras knows damn well he's not going to be able to get the whole Greek debt written off AND be able to stay in the Euro. But that's his opening gambit.

Pound to a pinch of dogshite says there'll be loads of public-eye posturing, and a messy but workable compromise reached in the backrooms, where effectively Greece is given till the end of time to repay its debt.

Which is actually the deal that the Allies cut for Germany in 1953. As I'm sure Tsipras will remind everyone around the negotiating table.

Get your facts straight. He only wants to write off half of the debt. Only half ffs  Even if he achieves this he will still have to find money he's not got to pay for all the benefits increases and increase in the public sector workforce.

No doubt he thinks he'll get all this money from taxing the rich. Well I've got news for him. There won't be any rich people left in Greece before long as they will all emigrate to the UK (many are already here).

I give him 12 months before he's kicked out of office.

[Sprotyrover]

Germany is playing bluff with the Greeks. They are trying to put the frighteners on Tsipras by saying, "You don't want to pay your debt? Fine. There's the door to the Grexit."

It's classic negotiating tactics. Let your opponent think he's run out off the edge of the cliff.

In reality, neither side wants Greece out if the Euro. It would be a mad gamble for Germany (if a Greece, why not Portugal? Spain? Italy? The genie would be out of the bottle and no-one would know where it would end. But that doesn't mean they don't start with a very hard position .

Similarly, Tsipras knows damn well he's not going to be able to get the whole Greek debt written off AND be able to stay in the Euro. But that's his opening gambit.

Pound to a pinch of dogshite says there'll be loads of public-eye posturing, and a messy but workable compromise reached in the backrooms, where effectively Greece is given till the end of time to repay its debt.

Which is actually the deal that the Allies cut for Germany in 1953. As I'm sure Tsipras will remind everyone around the negotiating table.

Get your facts straight. He only wants to write off half of the debt. Only half ffs  Even if he achieves this he will still have to find money he's not got to pay for all the benefits increases and increase in the public sector workforce.

No doubt he thinks he'll get all this money from taxing the rich. Well I've got news for him. There won't be any rich people left in Greece before long as they will all emigrate to the UK (many are already here).

I give him 12 months before he's kicked out of office.

k

Yes the Patriotic baskets pulled their dosh out of Greece and bought mansions in London.as soon as the going got tough.
How did they come by their wealth? Probably by utilising the old corrupt system that existed.

[River Don]

The Greek super rich made a lot of money in shipping.

http://www.businessinsider.com/the-wealthiest-greeks-2010-5?op=1&IR=T

[IC1967]

Germany is playing bluff with the Greeks. They are trying to put the frighteners on Tsipras by saying, "You don't want to pay your debt? Fine. There's the door to the Grexit."

It's classic negotiating tactics. Let your opponent think he's run out off the edge of the cliff.

In reality, neither side wants Greece out if the Euro. It would be a mad gamble for Germany (if a Greece, why not Portugal? Spain? Italy? The genie would be out of the bottle and no-one would know where it would end. But that doesn't mean they don't start with a very hard position .

Similarly, Tsipras knows damn well he's not going to be able to get the whole Greek debt written off AND be able to stay in the Euro. But that's his opening gambit.

Pound to a pinch of dogshite says there'll be loads of public-eye posturing, and a messy but workable compromise reached in the backrooms, where effectively Greece is given till the end of time to repay its debt.

Which is actually the deal that the Allies cut for Germany in 1953. As I'm sure Tsipras will remind everyone around the negotiating table.

Get your facts straight. He only wants to write off half of the debt. Only half ffs  Even if he achieves this he will still have to find money he's not got to pay for all the benefits increases and increase in the public sector workforce.

No doubt he thinks he'll get all this money from taxing the rich. Well I've got news for him. There won't be any rich people left in Greece before long as they will all emigrate to the UK (many are already here).

I give him 12 months before he's kicked out of office.

k

Yes the Patriotic baskets pulled their dosh out of Greece and bought mansions in London.as soon as the going got tough.
How did they come by their wealth? Probably by utilising the old corrupt system that existed.

I'm afraid there is still a lot of corruption. There has not been and still isn't the political will for reform. Unfortunately they need a Thatcher type character to sort the mess out but they haven't got one.

There is no hope for them I'm afraid. They think Germany owes them a living. They are in for a shock.

Unfortunately they've fallen for the leftie spin that everything's going to be alright because the socialist government is going to pay for everything. They haven't realised yet that the money isn't there to do it.

[Dagenham Rover]

Germany is playing bluff with the Greeks. They are trying to put the frighteners on Tsipras by saying, "You don't want to pay your debt? Fine. There's the door to the Grexit."

It's classic negotiating tactics. Let your opponent think he's run out off the edge of the cliff.

In reality, neither side wants Greece out if the Euro. It would be a mad gamble for Germany (if a Greece, why not Portugal? Spain? Italy? The genie would be out of the bottle and no-one would know where it would end. But that doesn't mean they don't start with a very hard position .

Similarly, Tsipras knows damn well he's not going to be able to get the whole Greek debt written off AND be able to stay in the Euro. But that's his opening gambit.

Pound to a pinch of dogshite says there'll be loads of public-eye posturing, and a messy but workable compromise reached in the backrooms, where effectively Greece is given till the end of time to repay its debt.

Which is actually the deal that the Allies cut for Germany in 1953. As I'm sure Tsipras will remind everyone around the negotiating table.

Get your facts straight. He only wants to write off half of the debt. Only half ffs  Even if he achieves this he will still have to find money he's not got to pay for all the benefits increases and increase in the public sector workforce.

No doubt he thinks he'll get all this money from taxing the rich. Well I've got news for him. There won't be any rich people left in Greece before long as they will all emigrate to the UK (many are already here).

I give him 12 months before he's kicked out of office.

k

Yes the Patriotic baskets pulled their dosh out of Greece and bought mansions in London.as soon as the going got tough.
How did they come by their wealth? Probably by utilising the old corrupt system that existed.

I'm afraid there is still a lot of corruption. There has not been and still isn't the political will for reform. Unfortunately they need a Thatcher type character to sort the mess out but they haven't got one.

There is no hope for them I'm afraid. They think Germany owes them a living. They are in for a shock.

Unfortunately they've fallen for the leftie spin that everything's going to be alright because the socialist government is going to pay for everything. They haven't realised yet that the money isn't there to do it.

Oh come on thats easy just print some more 

[IC1967]

If only they had their own currency. I believe Greece has also been excluded from the QE programme that's just been launched.

[Dagenham Rover]

If only they had their own currency. I believe Greece has also been excluded from the QE programme that's just been launched.

Grease needs excluding from everything unless you are trying to lubricate nuts 

[Iberian Red]

Germany is playing bluff with the Greeks. They are trying to put the frighteners on Tsipras by saying, "You don't want to pay your debt? Fine. There's the door to the Grexit."

It's classic negotiating tactics. Let your opponent think he's run out off the edge of the cliff.

In reality, neither side wants Greece out if the Euro. It would be a mad gamble for Germany (if a Greece, why not Portugal? Spain? Italy? The genie would be out of the bottle and no-one would know where it would end. But that doesn't mean they don't start with a very hard position .

Similarly, Tsipras knows damn well he's not going to be able to get the whole Greek debt written off AND be able to stay in the Euro. But that's his opening gambit.

Pound to a pinch of dogshite says there'll be loads of public-eye posturing, and a messy but workable compromise reached in the backrooms, where effectively Greece is given till the end of time to repay its debt.

Which is actually the deal that the Allies cut for Germany in 1953. As I'm sure Tsipras will remind everyone around the negotiating table.

Get your facts straight. He only wants to write off half of the debt. Only half ffs  Even if he achieves this he will still have to find money he's not got to pay for all the benefits increases and increase in the public sector workforce.

No doubt he thinks he'll get all this money from taxing the rich. Well I've got news for him. There won't be any rich people left in Greece before long as theywill all emigrate to the UK (many are already here).

I give him 12 months before he's kicked out of office.

k

Unfortunately they need a Thatcher type character to sort the mess out but they haven't got one.

There is no hope for them I'm afraid.

What? A PM who spends Christmas Day with kiddy fiddlers?

[BillyStubbsTears]

As ever, Prof Wren-Lewis at Oxford hits the nail on the head.
http://mainlymacro.blogspot.co.uk/2015/01/debt-restructuring-proposed-principle.html?m=1

The entire debt disaster is effectively to logical conclusion of 35 years of the neo-lib economic model that we dived into.

It's telling that Tsipras is being portrayed as a wild lefty for proposing actions that President Eisenhower would have been perfectly happy with 60 years ago. That's how far the economic and political argument has moved in our lifetime.

It's time to start bringing the debate back to the terms that served the whole West so well in the post-War years.

As Wren-Lewis says, the debt write off would be to EVERYONE's advantage. Other than the politicians  who have led us into this disaster.

[RobTheRover]

The Greek super rich made a lot of money in shipping.

http://www.businessinsider.com/the-wealthiest-greeks-2010-5?op=1&IR=T

Its like the old joke "What's a Greek urn?"