Posted on 06/28/2015 6:08:54 AM PDT by Kaslin
Edited on 06/28/2015 6:23:59 AM PDT by Admin Moderator. [history]
Greek Prime Minister Alexis Tsipras and his party Syriza have just screwed the pooch, and royally so. Tsipras has just done something so colossally idiotic and childish that perhaps Greece deserves its impending economic collapse for having elected someone so incredibly stupid. Greeks have suffered six years of chronic recession and endless rounds of debt negotiations, but this will all seem like a walk in the park compared to the poverty and civil chaos about the engulf their country.
Tsipras, the leader of Syriza (“Coalition of the Radical Left”), went on national TV at one in the morning on Saturday to announce his decision to torpedo Greece’s economy and the future of its people. Tsipras and his fruit-loopy Marxist finance minister have conducted four months of talks with Greece’s creditors trying to unlock more bailout money and bargain for yet another reduction in its outstanding debt. They’ve known all along that this Tuesday, June 30 was the drop-dead date for reaching a deal.
And all along they have been counting on blackmail to squeeze the rest of Europe for concessions. Syriza is garden variety liberalism on steroids, a party whose entire electoral appeal was “vote for us, and we’ll somehow convince the rest of Europe to cancel our national debts, and don’t worry, you can still receive your government pension at age 50.” And Tsipras’ basic negotiating stance has been, “give us more money, or we’ll declare a default, leave the eurozone, and laugh while your financial system collapses.”
Well, Angela Merkel and the finance ministers of fiscally responsible Germany, the Netherlands, and Finland failed to be intimidated this time by scare tactics, and repeatedly urged Tsipras to bargain seriously and in good faith, and accept some simple reforms of Greece’s corrupt economy in return for continued financial assistance. Bolstering their resolve was the growing realization that if Greece defaults and leaves the euro, it won’t cause any great systemic or irreparable damage for the rest of Europe (Greece is a measly 3% of the eurozone economy and its debt have to a large extent already been written off a uncollectible.)
Time was rapidly running out, and Tsipras waited in vain for the rest of Europe to blink first. And when Merkel and company failed to flinch, Tsipras decided to try a gambit whose idiocy defies belief. He announced that Greece will hold a national referendum on July 5 to approve or not the relief package Europe is offering.
First of all, Greece has debt payments due on Tuesday, which can’t be stretched out any longer, unless its creditors submit to this outrageous new bit of hustling, and they’ve made it clear they aren’t. So unless Tsipras climbs down immediately and accepts a humiliating political defeat (which he won’t) Greece goes into default in a few days. And Tsipras gives his creditors no reason to believe he is merely looking to give a new deal democratic legitimacy since he has said he will urge voters not to approve one.
And a referendum on such a complex matter can hardly be organized within a week. Tsipras and Syriza were elected to conduct negotiations and ultimately make the difficult decisions required. This referendum is not only pointlessly idiotic, it is an act of supreme cowardice. Obviously, Tsipras is hoping to save his political career. Either Greece defaults on Tuesday, and he will loudly claim that Europe was unwilling to wait “for just a few days more” for Greece’s voters to decide, or if against all the odds Europe gives Tsipras one more extension, and the voters take his advice, and Greece defaults a week later, he can claim it was “the democratic will of the people.”
Tsipras and Syriza are in for an unpleasant surprise on Monday morning. The European and U.S. markets may dip for a few days, US Treasuries may rally by twenty or so points in a knee-jerk “flight to quality,”, but there won’t be the financial panic they are counting on to soften up their creditors. At the end of the day it will be the people of Greece who suffer. And then it will be up to the Greeks to finally decide whether they want to live in a failed Balkan state like Serbia, or whether they want to toss out Tsipras and Syriza, pick up the pieces and begin the hard work of transforming Greece into an honestly run, economically stable, fiscally sound country. I believe they will, and when they do, and elect a responsible government, then Europe will be all but too happy to help Greece back on its way to its rightful place in Europe.
Bravo Sierra
Seeing the world that way blinds one to certain facts.
1. That Obamacare was a bailout for big insurance companies and hospitals that are prospering because of it and whose stocks jumped last Thursday with the SC ruling.
2. That Amnesty is about providing pools of cheap labor for corporate elites.
3. That Corporate Elites are in favor of gay marriage to the point of opposing First Amendment freedom of speech and religion for those who oppose it. We saw it with the shooting down of religious freedom legislation in states run by Republicans from Arizona last year to Indiana, Arkansas and North Carolina this year.
That seems to be why the ECB is putting pressure on Greece. Look at this way - if this week turns into “Hell Week” in Greece, the ECB is betting that the Greek voters will say, ‘Aw, $@%^ !!’ and vote yes in the June 5th referendum.
Calculated risk on their part; after all, you never know how an electorate might respond.
I recall a few years ago a previous Greek PM tried a referendum and that didn’t fly, so he dropped it. I can’t recall his name now.
Is that a British expression? Don’t use it in the usa.
I don’t believe Greece will recover any time soon. It will take decades. By the time Greece would be able to rejoin the EU, the EU probably wont exist.
The entitlement socialist ideology has been ingrained in multiple generations. It will take new generations suffering misery & impoverishment to restore self responsibility to the populace. The greedy elite will see to that.
Tsipras & his fellow Leftists will never apologize & resign. They will have to be driven from power by the Greek people and/or the military. They will never improve the economy because they fundamentally don’t know how, & they have run out of other people’s money.
The result for the future will be rapid expiration of the old & sick, rampant crime, an exodus of hard working, responsible, law abiding Greeks to better financial climates, & greater government tyranny.
To the South? Fiscally irresponsible neighbors for me in Pennsylvania are to the South in Washington, DC, and to the North in Harrisburg.
I think you hit the nail on the head. Greece could bring back the drachma with ruble backing or backed by russian gold as a transitional measure. Then they can do their own QE to their hearts content. In exchange Russia gets a mediterranean port.
“...you never know how an electorate might respond.”
I compare it to asking the 49% “entitlement” class in the USA whether to raise entitlements, or not. We know how they would vote.
If Greece can break away, what could follow? Texas? Hawaii? Portugal? Eastern Ukraine? I'm all for it. The only way people have control over government is if it's small enough to be close to them. Global entities and governments are out of control. I say starve the beast.
Greece’s GDP is actually smaller than the GDP of Louisiana. I’m sure most of Europe recognizes that Greece is basically just a crap stain that lingered on the edge of the toilet for a while.
This article puts tourism as closer to 20% GDP.
http://mobile.reuters.com/article/idUSL5N0ZD02O20150628?irpc=932
However, the article reveals the hidden cost of promoting tourism. Tax breaks on the already high VAT to the outer poorer islands are crical to the island populations survival above subsistence level with high energy costs being predominate.
Leaving the EU and going to the drachma will cause further flight of capital and brains, not a good prospect for growth of industries producing real goods.
And from the article one gets the sense that the island subsidies are as sacrosant as the pensions at age fifty.
What country wants its youth to be wait staff and tourist geehaw sellers while burdened with the mammoth pension burden.
The Greeks want socialism based on taking other peoples money. Well that well is about to become dry.
Socialism, not a country for old people, or anybody else for that matter.
“Greek Prime Minister Alexis Tsipras and his party Syriza have just screwed the pooch”
Opa! Come to America. Before too long we’ll be able to claim tax credits for screwing our pets.
Truthfully, the author is mistaken in several ways.
To refresh the history, remember PM Chamberlain waving a pile of paper while claiming victory after giving Hitler what he wanted?
For the most part, Europeans have had 1500 years of war to burn away whatever spine they had. So their only means to confront radicalism of any kind is with endless meetings, position papers, “dialoguing”, empty agreements and perpetual negotiations. So far this has worked great with Iran, for example.
Which is why radicals run circles around them.
The author argues that if radicals suddenly become reasonable, then all will be well. But radicals are in power precisely because they are *not* reasonable.
So what should Greece do vs. what Greece will likely do?
If Greece breaks away from the EU, why assume that they will still honor any of their outstanding debts? Of course not. And Greece’s creditors have already calculated this.
The reality is that Greece will immediately start cranking out Drachmas, with the *assumption* of substantial inflation. Because inflation *favors* debtors, including governments.
Right now, the Greek-on-the-street has Euros, so they might be offered a hundred Drachmas for each Euros. This will mean a big influx of Euros to the government, to buy stuff from Europe “cash up front”.
And once the Euros are cashed in, then the government will raise the inflation rate, so everybody who retired at 50 with a huge pension will find their pension cut in half by inflation. Then maybe half again.
It is austerity by other means.
The next step is a big sales tax. Most everybody cheats on their income taxes, so it is a lot easier to collect taxes at point of purchase.
And all the while this is being done, the rest of Europe will be wringing its hands and whining. Because if Greece succeeds, which is may well, then the UK, and maybe others will become far more interested in jumping ship as well.
It’s not just the history. Great beaches....
After 70 some odd years the Communists will take Greece.
Mr Nuckols grossly underestimates the stupidity of politicians on both sides of this dispute. When a politician wants something (see Obama, Iran Agreement) their IQ takes a dive into negative numbers.
I don’t get it why you removed the picture. There is no reference that photos from Reuters can not be posted. The photo is not from the L/A times or from the AP
My prediction is that Merkel will cave.
You are correct. in many ways the Greek situation is like the proverbial Trojan Horse against the ECB , European banks, IMF, EU Commission and the fiat mechanism in general. The danger is not Greece per say but the repercussions throughout Europe. Spain and Italy are next and when they fall, party’s over.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.