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A range of views:
Hand wringing in the Grauniad:
http://www.theguardian.com/commentisfree/2015/jul/05/the-guardian-view-on-greeces-no-vote-eight-days-that-shook-a-continent
Doesn't dwell (at all) on how German, French & Italian tax payers should pay for it...
Tim Stanley in The Telegraph wants to 'show compassion':
http://www.telegraph.co.uk/news/worldnews/europe/greece/11719861/Greece-has-captured-its-conqueror.-Now-the-EU-should-forgive-and-restructure-the-debt.html
While the Specie has two articles more focussed on what may happen next:
http://blogs.spectator.co.uk/fraser-nelson/2015/07/the-greeks-have-voted-no-now-the-real-crisis-will-begin/
http://blogs.spectator.co.uk/james-forsyth/2015/07/greece-says-no-will-germany-now-try-and-kick-it-out-of-the-euro/
And the ghost of Admiral Byng looks down.....the Greeks having forgotten his lesson, Angela Merkel seems very mindful of it.....
http://www.policyexchange.org.uk/item/wolfson-economics-prize-2012
- A new currency is introduced at parity with the Euro on day 1 of an exit.
-All wages, prices, loans and deposits are redenominated into it 1 for 1.
Euro notes and coins would remain in use for small transactions for up to six months.
- The exiting country would immediately announce a regime of inflation targeting, adopt a set of tough fiscal rules, monitored by a body of independent experts, outlaw wage indexation, and announce the issue of inflation-linked government bonds.
Doesn't feel like it........
The Germans simply have to do......nothing, and let events take their course.....
How you can deal with that in a global economy I'm not sure.
However, if most "small" people have already withdrawn their savings and either spent them or put them under the mattress closing the banks will simply mean that there's only a cash economy, so it'll be bigger busines that comes to a grinding halt. We already know there are medicine shortages because pharmacists can't pay multi-nationals.
Greece's options look to have been really crappy but they appear to have made their choice and given the dire warnings of other leaders, they gave made that choice with eyes open. So if they don't get a better deal, they will be out of line if say they must still be rescued and how not doing so is punishing them for their democratic choice. As they say, freedom includes the freedom to accept consequences, and having shown 2 fingers to the creditors, no one has to offer them jack squat now.
They still might, and that be the fairest or at least least worst option, but Greece have lost to claim betrayal if the don't.
- Default on all debts to overseas lenders.
- Start issuing electronic IOUs, theoretically redeemable for Euros at some future date.
- Make a law that wages, pensions and bank deposits are payable in IOUs.
- Introduce an electronic payment system like the MPESA so that you can spend IOUs in shops. This also has the benefit of making transactions easier to tax.
The IOUs will immediately plummet in value, so in effect you'be just cut wages and welfare, not to mention a bank deposit haircut. What happens next is one of two things:
a) The economy recovers, you get a primary budget surplus, the IOUs start to look like they may actually be redeemable for Euros, and their value recovers. If things go well enough you ultimately cut a new deal with the lendors who get something back instead of nothing and either recapitalise the banks with normal Euros or let people bank with German banks instead.
b) The economy doesn't recover and the government is still spending more than it gets, so you just keep making up ever-devaluing IOUs forever.
BTW, you are absolutely right about tax. The Greek government collects taxes equivalent to around about 32% of GDP. That is 5-10% less than anyone else in Europe. At the height of the Eurozone crisis, I saw a speech by former MEP John Stevens, who had the memorable line "If the Greeks paid as much taxes (as a proportion of income) as the Italians, their budget would be in balance. If they paid as much as the French, they would have a surplus."
I honestly thought politics was going to get boring for a few months ...
I could be wrong, but that sounds unlikely.
Could you devalue (slightly, or a lot) at each switchover?
(or tweeted to be precise): Well done to the people of Greece. European leaders should now respond constructively to the democratic voice of the Greek people.
How much Scottish tax payers money is the SNP Foreign Affairs spokesman proposing they send?
what do you reckon?
Debt and saving are opposite sides of the same coin. They are both mechanisms for the time transfer of work. Somebody who borrows is one who wishes to consume today, and someone who saves is one who wishes to consumer tomorrow.
When we talk of about debt forgiveness, let us be honest and call it savings destruction. The Greek government wishes to reduce the savings of millions of people.
What it cannot have is debt relief without reform. And what the Greeks have voted for is debt relief without reform (or, austerity, as some like to call it).
We have Salmond, Blanchflower and others cheering the Greeks on and calling for EU 'flexibility' (who pays for this flexibility generally unspecified, except for Blanchflower, who says the Germans should pay, without resorting to a referendum, presumably) and all the other forces of 'Anti-Austerity'
And then we have the rest, who have generally been more circumspect in their pronouncements.
As Ben Goldacre frequently observes 'I think you'll find its a bit more complicated than that.....
Even if the ELA allowed the banks to borrow more money (and somehow I doubt the banks are solvent enough for that to happen) the cash withdrawals are such that further withdrawals will eventually make the banks insolvent..
The ironic thing is that the above would be true regardless of what the vote was.... The problem with a No vote is that people are going to blame Varoufakis and co..
Up until the vote, the only people whose opinion mattered were the Greeks'
After the vote, their opinion is largely irrelevant. Now other people decide.
Leaders have swung from lamp posts for less.
1. The creditors hold the cards now. How they respond to the vote determines what happens next.
2. The ECB will not cut ELA, kill the banks and force an exit until a political decision is made. That might be tomorrow or it might not.
3 . This could end very quickly or it could drag out until the 20th July and a missed ECB payment.
4. Creditors clearly divided - IMF vs many on debt restructuring. France & Italy pushing for a deal, Germany/Eastern Europe more hardline.
5. Greek government sounded more conciliatory last night, less bombastic nationalism than in recent days.
6. Again - creditors are weighing up economic costs of Greek exit vs political costs of a Greek win. That's the choice they have to make.
Two countries: Venezuela, Spain.
A name from the past: Admiral Byng
The ability to buy exports including food is limited to the amount of euros currently in the Greek system. Shortages will grow from local difficulties to serious this week. More people will leave. A lot more people. People who have probably not paid as much tax as they should in the past. They will pay none in the future.
Syriza have led their people over the cliff. It won't take long for them to hit the bottom. And all the creditors can do at the moment is wait and prepare their own systems for inevitable default by the Greeks. The idea that they will advance more money to break the fall is frankly absurd.
http://yanisvaroufakis.eu/2015/07/06/minister-no-more/
He's doing a runner before the locals realise what's happened and get the piano wire ready.
We of the Left know how to act collectively with no care for the privileges of office.
Obviously part of a deal with someone for him to go.
I could be entirely wrong but this is my guess on what will happen next:
1) Today, Merkel simply says that there are no further negotiations with the Greek government
2) Tomorrow, every Greek bank collapses;
3) Wednesday, the Greek government has to fire up the printing press. At that point, whether officially or not, it has left the Euro;
4) Thursday, the new currency comes under attack;
5) Friday, the Greek government officially announces default;
6) Saturday, the riots start.
That seems the likely order of events, although the timescale may be completely wrong.
The reason I believe this is because the alternative is as follows:
1) Merkel gives in and rescues the Greek economy;
2) The Spanish government collapses under pressure from the far left and a new anti-austerity party comes to power demanding the same deal for Spain;
3) Because that is unaffordable, the euro collapses and takes the world economy with it.
Since Merkel is essentially a pragmatist, I'm pretty sure she will sacrifice the Greeks - and probably take delight in doing down Tsipras - in order to save the rest.
What was that passage in the Bible about 'if an eye offend you, pluck it out - for it is better to go through life with one eye, than spend an eternity in hell with two'?
They'll start to smoulder if the banks don't open tomorrow, and really kick off when the cashpoints run out of money.
Therefore, the only person who can save the Greek economy now and prevent a Grexit is Merkel, and I'm pretty sure she won't do it. Leaving aside the appalling behaviour Tsipras and Varoufakis have exhibited towards her, she'd never carry the German government and people with her. Also, she will be thinking of the wider consequences of being too nice to people who have decided that childish abuse and denial of their own complicity in the crisis is the way to make their creditors pay attention to them.
And unlike the EU, Merkel can and does play hardball. Look at the way she treated the Social Democrats under the first grand coalition if you don't believe me.
This is quite an interesting analysis, although it's a lot more optimistic(!) than my own:
http://blogs.reuters.com/hugo-dixon/2015/07/05/greece-will-struggle-to-stay-in-euro/
It would look politically awful to everyone if Greece is thrown under the bus for the decision of their people, so we will see a load more fudge that at least allows the banks to give the impression of being open and something approaching normality to resume.
And I think the EU (again, here we're talking about the political not economic leaders) will take the view that they are not ejecting the Greeks - rather, that the Greeks have ejected themselves.
Like I say, I could be and indeed hope I am wrong. It's also true the EU tends to deal in the art of the possible. But I suspect that raw emotion will outweigh principles in this case.
So events in Greece will overtake any talks. I think the cash machines will be empty by lunchtime.
Greece has only ever printed €5, €10, €20. Only DE, AT, LU ever had plates for €200, €500 (via @TheDefaultLine )
Of course, the childish abuse is par for the course from Labour propagandists these days...in a way, having benefitted hugely from those decent middle-ground old Labour types who taught me when I was growing up in an ex-mining area, people who cared about and dedicated their lives to helping the poor, that's even sadder.
The jealousy and spite about your lack of success and inadequate education are fortunately not insoluble, however. The Open University does excellent courses, but be warned they are academically rigorous. Alternatively, if you live in London, Birkbeck might be able to help.
Plus was loving the neck and neck/tctc opinion polls prior to the referendum result.
We are seeing what happens when the likes of Owen Jones form a government of a country.
Anyone know definitively if Greece can actually print Euros on their own, because if so someone at the ECB must surely be in a whole load of trouble!
The second was so difficult to work out that it was never actually successfully prosecuted again, although I think Robert Calder was charged with it after his engagement with Villeneuve in 1805.
As I recall - I haven't checked - Byng attacked a group of ships but then backed off due to an adverse tide and let some of them get away. He was therefore accused of having failed to press the attack when he should, found guilty, and shot.
At the moment the likes of Merkel will be desperately trying to fudge a compromise that looks from the outside like they haven't done exactly that.
Tsipras has played them all at their own game and made them look foolish.
Still, don't worry guys. Just ratchet up the abuse of those who disagree with you.
Byng's execution was satirized by Voltaire in his novel Candide. In Portsmouth, Candide witnesses the execution of an officer by firing squad; and is told that "in this country, it is good to kill an admiral from time to time, in order to encourage the others" (Dans ce pays-ci, il est bon de tuer de temps en temps un amiral pour encourager les autres).
https://en.m.wikipedia.org/wiki/John_Byng
Greece will not be the country on Merkel's mind.....
The people who celebrated with their hearts last night will have woken up to the same problems this morning.
I've no wish for things to get worse for the Greeks, though in the short term that seems unavoidable and this time they cannot blame anyone for taking this path, right or wrong, but I almost agreeing would be amusing for the other parties to delay any action until referendums of their own. That's the only way for them to follow the will of the relevant people after all.
I would be interested to read your book when it comes out, if only to see what evidence base you've used (I've never quite forgotten the time I read that appallingly inept attempt to psychoanalyse Thatcher by somebody who should, to say the least, have been receiving help) but I rather suspect that its final conclusions will not be worth much if this is a sample of your reasoning.
PS out of curiosity - if you are not a Labour propagandist, why are all your contributions on here pushing the Labour line passim ad nauseam? Just a query.
Last time I'll post it, but those after a post-race analysis of an exciting (don't listen to Mr. Jessop) British Grand Prix, which was also quite green, click here: http://enormo-haddock.blogspot.co.uk/2015/07/united-kingdom-post-race-analysis.html
Surprised to read the finance chap's gone.
Whether it's worth the risk for Greece depends on how the others justify not carrying out the sacrifice, and whether they'll demand a limb or two at the Leary. We shall see, at present it's unclear.
Possibly the best thing that Tsipras can do today is call Mme Legard and work hard on her, he needs to have at least one powerful ally for the coming weeks - which won't be easy for anyone involved.
But he also needs to understand that serious reform will be needed, he can start by putting significant govt assets up for sale and hitting a few of the more obvious and egregious tax evaders hard.
It reminds me of one of Jim Hacker's irregular verbs:
I am an entrepreneur. You are a crony capitalist. They are all crooks, pure and simple.
With PODEMAS possibly rising to power in Spain is that really something they want to do ?
A pleasant day to all
https://twitter.com/MacroPolis_gr/status/617954668212322304/photo/1