Germany won’t spare Greek pain – it has an interest in breaking us- Yanis Varoufakis

[Sunk in Tupelo]

http://www.theguardian.com/commentisfree/2015/jul/10/germany-greek-pain-debt-relief-grexit

Greece’s financial drama has dominated the headlines for five years for one reason: the stubborn refusal of our creditors to offer essential debt relief. Why, against common sense, against the IMF’s verdict and against the everyday practices of bankers facing stressed debtors, do they resist a debt restructure? The answer cannot be found in economics because it resides deep in Europe’s labyrinthine politics.

In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend – restructuring the debt and reforming the economy; and the toxic option – extending new loans to a bankrupt entity while pretending that it remains solvent.

Official Europe chose the second option, putting the bailing out of French and German banks exposed to Greek public debt above Greece’s socioeconomic viability. A debt restructure would have implied losses for the bankers on their Greek debt holdings.Keen to avoid confessing to parliaments that taxpayers would have to pay again for the banks by means of unsustainable new loans, EU officials presented the Greek state’s insolvency as a problem of illiquidity, and justified the “bailout” as a case of “solidarity” with the Greeks.

To frame the cynical transfer of irretrievable private losses on to the shoulders of taxpayers as an exercise in “tough love”, record austerity was imposed on Greece, whose national income, in turn – from which new and old debts had to be repaid – diminished by more than a quarter. It takes the mathematical expertise of a smart eight-year-old to know that this process could not end well.




Greece has been insolvent for 5 years yet the EU 'leaders' continue to try to draw blood from stone. Why? Is this really about control and subverting democracy? Is the EU a control mechanism rather than a democratic one?

[Sunk in Tupelo]

1. Bernie Sanders: "I Applaud the People of Greece"

Bernie Sanders: "I Applaud the People of Greece"


Portion of article:

Amid the fury over the outcome, no one should lose sight of the importance of the vote itself. The Greek decision, made in the face of enormous pressure to accept the demands of the bankers and bureaucrats, was a victory for democracy. And Americans should support the Greeks as they seek to carve out a place for citizens and nation states in the new economic arrangements of the 21st century.

Vermont Senator Bernie Sanders gets that this is about more than one country. “I applaud the people of Greece for saying ‘no’ to more austerity for the the poor, the children, the sick and the elderly,” says the contender for the 2016 Democratic presidential nomination. “In a world of massive wealth and income inequality Europe must support Greece’s efforts to build an economy which creates more jobs and income, not more unemployment and suffering.”

Dan Cantor, the national director of the Working Families movement, gets the point as well. “Greece—the birthplace of democracy—is making a simple request: ‘Let our people vote on this proposal,’” explains Cantor. “We can’t allow these global finance titans to blackmail Greece’s democracy with their wealth. The U.S. controls the most votes on the board of the International Monetary Fund, and can use its influence to soften negotiations with Greece.”

http://www.thenation.com/article/bernie-sanders-i-applaud-the-people-of-greece/

[geek tragedy]

4. 72 hours later, oops daisy. nt

[notadmblnd]

2. Why couldn't something like a gofundme page be done for Greece on a large scale?

Invest instead of austerity?

[Adrahil]

18. What's their plan?

I'm all for helping them out if they have a plan to acheive a sustainable economy.

No more austerity isn't a plan.

[geek tragedy]

3. He said from his vacation home after fleeing the capital.

http://m.enikos.gr/en/politics/32234,Varoufakis-spotted-on-a-boat-to-his-holiday-home--PHOTOS.html

This guy made things worse for his country. Much worse. A Bushesque failure.

[Sunk in Tupelo]

5. So you disagree with Bernie?

[geek tragedy]

7. Yes.

Amazingly enough, I think for myself.

It was a mistake to comment on it.

The referendum was a colossal misstep. The same Greek government that called the referendum then turned around and blatantly pretended it never happened-proposing harsher austerity than the terms rejected by the referendum.

Meanwhile, the country was dealt a crushing economic blow via capital controls while Mr. Bean and the Minister of Awesome managed to convince the rest of Europe that Greece should never be trusted.

Tell me why that referendum was a good idea?

[Depaysement]

6. The answers to your questions are all the same

Of course.

The EU was created to stop socialism.

Now you have creditor fascism. So much better.

[roamer65]

8. Berlin has to make a Eurozone exit look downright unbearable to certain other members.

Otherwise France, Portugal and Spain will look at Greece and say, "Hey it wasn't so bad after all for the Greeks and they got their democracy back, too!"

That's not an idea Berlin wants planted in the minds of other Eurozone members. It's not conducive to empire building.

[geek tragedy]

9. Greece proposed these austerity cuts.

What they proposed is worse than what Germany proposed.

[Sunk in Tupelo]

11. Can you explain how the cuts are worse,

rather than just saying so? Could you possibly post up some linked evidence to back up your point? It's pretty simplistic to just make a point but not provide anything to bolster it.

[Yo_Mama]

14. It's a large complex package - here is an article with some specifics

http://en.protothema.gr/final-countdown-whats-next-now-that-greece-has-submitted-proposals/

[geek tragedy]

17. .

http://www.theguardian.com/business/2015/jul/10/tsipras-greek-economy-sabre-purpose

http://nymag.com/daily/intelligencer/2015/07/greece-submits-harsher-austerity-proposal.html

While Greek voters overwhelmingly rejected the terms proposed by the nation's creditors in a vote last Sunday, the 13-page proposal includes even harsher austerity measures.

[Yo_Mama]

13. Berlin isn't trying to stop Greece from exiting. Greece is the party that just decided not to do it.

Greece has just voted for a very stringent package of reforms.

Obviously, they don't feel that exiting the Euro is their best option at this time.

[Yo_Mama]

12. As deeply sympathetic as I am, the real issue is Italy.

In 2010, when Greece became insolvent according to his own statement, the debt to GDP ratio was below Italy's of today:

Greece:
http://www.tradingeconomics.com/greece/government-debt-to-gdp

Italy:
http://www.tradingeconomics.com/italy/government-debt-to-gdp

Think about the implications! Not the least of which is that if Italian creditors get the idea that Italy will get a haircut on its debt too, no private sector purchasers will want to hold Italian sovereigns (the first major writedown of Greek debt was on privately held sovereign bonds). And interest rates are going to skyrocket.

The other European governments are willing to defer interest from Greece and extend repayment for a very long time, which is equivalent to writing off debt. But they cannot concede that they have to write off Greek debt and Italian debt and Portuguese debt.

Also, one reason for wanting Greece to restructure is that Ireland is now improving:
http://www.tradingeconomics.com/ireland/government-debt-to-gdp

The governments of the EU know that they are not going to be repaid in full. They are trying to minimize their losses by (they think) creating better future conditions for growth in Greece.

This is not a simple situation. In 2010 the Greek government published a report saying that they were in deep trouble and that they would have to introduce an austerity program:
https://en.wikipedia.org/wiki/Greek_government-debt_crisis

In 2012 the private creditors took a nominal write-down of over 50%, a real write-down of over 70%. So there has been debt relief. The creditors extended over 200 billion Euros in relief packages, but the planned structural reforms did not occur.

And so now we come to the current pass.

[Sunk in Tupelo]

15. Simply put, it seems (quite clearly to me) that the creditors are just perpetually lending

to Greece in order to sustain the debt to themselves and the other creditors they sold the debt to. It seems to be a form of predatory lending if one considers that Greece was deemed insolvent back in 2010 and is now perpetually unable to repay the debt. Underneath it all it seems that austerity is a failure when it comes to growing an economy. There is no expansion, only retraction in the backs of the poor. The EU seems addicted to this type of thinking and I believe they want to punish the new Greek government for the mistakes of the past governments due to the fact that the new government is a liberal, progressive one.

Brussels prefers Conservative, go along, austerity happy vassals who are willing to do their bidding. Syria doesn't fit into that EU box, which bring us to the point I was making about the EU being a dictatorship ruled from Brussels that is more about control than a democratic union of states that embrace new and different approaches. I think the new Athens leadership is showing us the way in true Greek democratic fashion and they are running into roadblocks because of it.

One other thing to consider is that the ECB gave itself a financial injection of a trillion Euro back in January. If they can do that for themselves then why not Athens? Also if they can continually give an endless supply of money to Ukraine, why not Athens? I think that speaks pretty clearly that this is about control and not about paying down debt.

Final point, the greeks offered to finance the debt by cutting back on their percentage of NATO funding and the EU rejected that offer. That shows you that this is really about control. The Associate Editor at the Guardian agrees.

http://www.theguardian.com/commentisfree/2015/jul/01/syriza-cave-in-elites-regime-change

It’s now clear that Germany and Europe’s powers that be don’t just want the Greek government to bend the knee. They want regime change. Not by military force, of course – this operation is being directed from Berlin and Brussels, rather than Washington.

But that the German chancellor Angela Merkel and the troika of Greece’s European and International Monetary Fund creditors are out to remove the elected government in Athens now seems beyond serious doubt. Everything they have done in recent weeks in relation to the leftist Syriza administraton, elected to turn the tide of austerity, appears designed to divide or discredit Alexis Tsipras’s government.

[Sunk in Tupelo]

16. Stiglitz and the Guardian both make the same point I make by the way.

From Comment Is Free. The Guardians take three days ago:

It emerged that the ECB was capping, rather than cutting off, liquidity support, and leaders including Angela Merkel spied an opportunity to rid themselves of a tricksy interlocutor. They imagined scared voters rallying to yes, trashing Mr Tsipras’s personal authority and perhaps unravelling his loose-knit Syriza alliance. By signalling that voting no would push Greece out of the euro, they broke all the usual protocols by weighing into someone else’s democratic contest. It was an appallingly presumptuous path to go down. Now, after Greece has said no, Mr Tsipras’s future is not the immediate question. It is the fate of the euro itself which is hanging by a thread.