Posted on 02/09/2015 10:26:07 PM PST by NRx
Greece’s finance minister Yanis Varoufakis has spelled out the negotiating strategy of the Syriza government with crystal clarity.
“Exit from the euro does not even enter into our plans, quite simply because the euro is fragile. It is like a house of cards. If you pull away the Greek card, they all come down,” he said.
“Do we really want Europe to break apart? Anybody who is tempted to think it possible to amputate Greece strategically from Europe should be careful. It is very dangerous. Who would be hit after us? Portugal? What would happen to Italy when it discovers that it is impossible to stay within the austerity straight-jacket?”
(Excerpt) Read more at telegraph.co.uk ...
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Looks like a pro job, welcome aboard!
“Exit from the euro does not even enter into our plans,
Aren't these contradictory?
Just kidding. Looks good.
As long as Greece remains in a "should we stay or should we go" mode that only increases the uncertainty.
Since there is no way in this reality that Greece will ever make good on their loans, then it seems to me the best thing in the long run is for Greece to formally default, get out of the Euro, and allow their currency to fall to the abysmal level it deserves.
Lots of investors will lose their shirts, while others will make out like bandits. But in the end, certainty will return and things should stabilize.
Of course, if Portugal and Italy and Spain start thinking "Why don't we do that to?" then the uncertainty will remain, but at least keeping three countries afloat will be an easier task than keeping four deadbeat countries afloat.
Thank you.
One of the chief problems is giving the social market economy any credibility to begin with. Of course, since the liberals are fine with trading with communists, such a socialist-lite setup must look like nothing to them by comparison.
The EU was just fine with creating this “beneficial crisis” though. Enough people were warning it was coming. Greece, like Portugal, Spain, Ireland and Italy, had their resistant governments toppled and replaced with politicians willing to take the bailout “loans” even in exchange for the draconian and even immoral terms that came with them.
“Greece’s leaders stun Europe with escalating defiance
“Exit from the euro does not even enter into our plans,
Aren’t these contradictory? “
It is brinksmanship by SYRIZA, the new ruling party in Greece (an acronym for Coalition of the Radical Left, in Greek).
They are hoping to scare their creditors in Europe into writing off half their massive debt, suspending payments on the other half, and giving them big new loans to go on an Obama-like spending spree.
They are using the survival like the Euro as a hostage.
The Europeans have seen this coming for a few years, and are not as unprepared as they were a few years ago, but the new Greek Government are extremists.
It is a high stakes game of chicken which could drive Greece into Zimbabwe-like printing of their own currency, or send a shock through the banking system as 100 to 300 billion Euros in debt vaporizes from bank balance sheets.
Coming to areas of prolonged socialist overspending near you, if things don’t change.
‘Greece, like Portugal, Spain, Ireland and Italy, had their resistant governments toppled and replaced with politicians willing to take the bailout “loans” even in exchange for the draconian and even immoral terms that came with them.”
Ireland is a different case from the others. Ireland had a banking liquidity/solvency crisis, after an overheated real estate market crashed.
The others have the usual socialist disease of running out of other people’s money to spend, after decades of establishing overly generous Government handout programs to large swaths of the population, that were never affordable.
Greece was required to stop (slow actually) overspending, as a condition of getting bailout loans when they went broke, and were unable to print more money as they no longer had their own currency since adopting the Euro.
They got sick of living within their means and elected a radical Government to try to make the laws of math go away, and start serving up all those free lunches.
Greek communists think they have leverage to blackmail. I really hope Greece will be kicked out of the Eurozone. It is not that big of a deal and would serve as a warning for commies in other countries. Greeks brought it on themselves. If instead Greeks are rewarded for their irresponsible behavior then I fear voters in big countries like Spain and Italy will try to follow suit and it will end up in a catastrophe.
“Since there is no way in this reality that Greece will ever make good on their loans, then it seems to me the best thing in the long run is for Greece to formally default, get out of the Euro, and allow their currency to fall to the abysmal level it deserves.”
No way they will ever make good on their loans,,, hmmmm. Gosh that sounds familiar,,,
The issue is not whether Greece should repay its debt.
The issue is whether Greece can do so without generating economic growth to pay it.
Austerity is politically impossible. EU leaders are beginning to understand without change, the EUSSR will go the of the Soviet Union.
My first thought.
This is extortion. Keep funding our socialist fantasy or we pull the Euro down around your ears.
“It is a high stakes game of chicken which could drive Greece into Zimbabwe-like printing of their own currency, or send a shock through the banking system as 100 to 300 billion Euros in debt vaporizes from bank balance sheets.”
That 100 to 300 billion Euros in debt in the banks’ balance sheet is bogus. The debt has already vaporized by any modicum of accounting system - they just refuse to accept reality.
The troika is lending Greece more money (increasing that debt) so they can repay the debt!! It’s like playing a Ponzi scheme on yourself.
The equivalent would be a broke, jobless homeowner who can’t pay the mortgage. The bank lends him more money each month so he can use it to pay the mortgage and so the bank can keep the mortgage in the book as good debt.
Utter insanity.
“The issue is whether Greece can (repay its debts) without generating economic growth to pay it.
Austerity is politically impossible. “
SYRIZA is not planning a pro-growth agenda - they campaigned on a massive tax and spending spree, accompanied by extensive ideologically driven changes, to leave NATO, break ties with Israel, change the constitution, restrict the church, etc.
Among their long list of new taxes, they propose targeting the high earners with a 75% income tax, like the one that worked out so well in France. They also seek to extensively target shipbuilding and tourism - the only things that significantly still work in the Greek economy.
They plan to rely on Government “Stimulus” spending on social programs, and “fairness” to jump start their economy.
Among their massive new spending proposals is free healthcare, free lunches for preferred groups, free electricity for those the government deems poor, and an enhanced quality of life for illegal immigrants to be provided by the Government (this will be free too), increase government pensions, hire 10,000 more government employees, and on, and on..
Naturally, they don’t have money to pay for these things, so they will need to take money from others to do them. They have proposed a wide range of nationalizations - hospitals, utilities, airports, banks, etc. That should get investment racing - for the borders. So they also have proposals to impose capital controls on peoples money.
SYRIZA is predominantly a hard communist movement - they are a wrecking ball which will demolish wealth in Greece.
As far as I recall, Iceland did the opposite...they let it all collapse, defaulted on loans, fired all the government workers and started all over again.
After a few months of chaos they got it together ok.
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