Greece election: EU and Germany firm on Athens bailout

[T_i_B]

Source: BBC

The EU and Germany have stressed Greece must keep to the terms of the two EU/IMF bailouts, after a surge of voter support for anti-austerity parties.

Speaking to reporters on Monday, German government spokesman Steffen Seibert spelt out Berlin's position that "the agreed programmes must be adhered to". He added that Germany would support Athens in returning to competitiveness and financial stability, "whatever its government is".

That message was underlined by European Commission spokeswoman Pia Ahrenkilde Hansen, who said Brussels "hopes and expects that the future government of Greece will respect the engagement that Greece has entered into".

She said the Commission was ready to help Athens with its "ongoing reform agenda". Any political instability in Greece may prompt fresh questions over the country's place in the eurozone.


Read more: http://www.bbc.co.uk/news/world-europe-17975370

[bemildred]

1. And that is worth a bucket of warm spit, at this point.

What was agreed to can be un-agreed to.

[hack89]

2. The Greeks are screwed no matter what.

I am not sure there is a clear path forward for them that does not entail a lot of pain.

[bemildred]

5. No point is stringing it out.

It's not like going along with the banksters is going to lead anywhere good.

[hack89]

6. But the alternatives may be just as bad or even worse

there is a lot of rage and emotion in Europe but little rational analysis.

Unfortunately, I have no clue how to fix the issue either.

[bemildred]

7. Who can say?

At least it won't just be about banks getting their money back.

[hack89]

9. I can understand that position

but what if the banks getting their money back is the best solution?

These are not the kind of decisions to be made on pure emotion.

[bemildred]

10. Other than the claims of the banks, how would you know?

They don't have a good record of predicting the future effects of their policies. I can assure you that getting their money back, or not, arouses a good deal of emotion in their minds. I want them out of the picture precisely because they are far from objective observers.

[hack89]

11. We may never know except in hindsight

however, unless Greece can insulate themselves from global capital markets, it may not be wise to ignore those bankers. The Greek economy will not survive without those markets. Greece is dependent on the global economy - they cannot severe all connections and expect to survive.

[cstanleytech]

18. What about changing the repayment date the loans?

You know push it back 20 to 30 years, it should give the country time to recover you would think and its a better option than a total default which might mean the banks get zero.

[hack89]

19. Sound fine to me.

but that means engaging with the bankers and that appears to be hard for some to accept.

[bemildred]

12. Look, these "financial wizards" have got most of what they wanted for 30+ years now

and what have they done with it besides screw everybody else? They can kiss my ass with their whining and threats.

[hack89]

14. But you have nothing to loose if the Greek choose wrong.

and you can't blame those "financial wizards" for the Greek government promising more than they can pay for and then covering up the ensuing debt. No one put a gun to Greece's head to go so deeply into debt.

[bemildred]

15. And you do?

Doesn't that make me more "objective" and less "emotional"?

[hack89]

16. I have no strong feelings one way or the other

I am just nit picking at your "damned bankers" attitude - I think the Greeks bear a lot of responsibility for the mess they are in.

[bemildred]

17. Tsk, that sounds so "emotional". nt

[hack89]

21. For suggesting that the Greeks also share the blame for the mess they are in? OK. nt

[bemildred]

22. For thinking that "who to blame" is the proper question to concern oneself with.

Athough we don't agree about who to blame, we do seem to agree about that.

But I'm not pretending to objectivity or being dispassionate.

[hack89]

23. OK. Thanks for the interesting discussion. nt

[bemildred]

25. Likewise.

[fasttense]

32. No, your correct, no one put a gun to their head.

But it was one huge con orchestrated by Goldman Sachs, other bankster and corrupt Greek politicians. It was fraud, they showed crooked Greek politicians how to cook the books and yet no one went to jail. The politicians got to keep their bribes and the banksters are now squeezing the Greek people who were not in on the con.

http://www.nytimes.com/2010/02/14/business/global/14debt.html?_r=1&pagewanted=all

"The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards."

[sabrina 1]

26. There has been plenty of rational analysis. But the stooges of the Global Banks

who caused the disaster here and in Europe, do not want to hear about anything rational that benefits t he people.

Iceland chose to do what hopefully Greece will do, and Iceland, despite all the dire warnings of how they would fail, is the ONLY country currently rebounding. They took care of business, arresting corrupt politicians and bankers, and making sure the people did not pay their gambling debts. Yes, it was difficult to recover from the corruption, but they maintained their sovereignty.

Greece, Spain, Italy, Portugal, France et al have to decide, if things are going to be difficult no matter what they do, do they want a difficult recovery period WITH their sovereignty intact, or a difficult period with someone else running their countries and dictating who their leaders are. People have fought wars to maintain their sovereignty. So we'll see.

But the last people in the world to be listening to at this point, are the Merkel/Sarkozys and their cronies who have failed so miserably to improve anything for millions of people, while protecting the banksters. Their way has failed. Time to try something more rational than forcing ordinary working class people to pay the gambling debys of Wall Street criminals. Looks like the people are making their voices heard where they cannot be ignored anymore.

[hack89]

27. Iceland borrowed billions from the IMF in addition to accepting IMF austerity measures.

The problem in Iceland was domestic banks

They solved their problem by:

1. Restructuring domestic banking
2. Accepting IMF help.
3. Applying for EU membership to improve their credibility with the international financial markets.

Do you want Greece to fix their problem like Iceland now?

Iceland's financial position has steadily improved since the crash. The economic contraction and rise in unemployment appear to have been arrested by late 2010 and with growth underway in mid 2011.[187] Three main factors have been important in this regard. First is the emergency legislation passed by the Icelandic parliament in October 2008. It served to minimise the impact of the financial crisis on the country. The Financial Supervisory Authority of Iceland used permission granted by the emergency legislation to take over the domestic operations of the three largest banks.[188] The much larger foreign operations of the banks, however, went into receivership.

A second important factor is the success of the IMF Stand-By-Arrangement in the country since November 2008. The SBA includes three pillars. The first pillar is a program of medium term fiscal consolidation, involving painful austerity measures and significant tax hikes. The result has been that central government debts have been stabilised at around 80–90 percent of GDP. A second pillar is the resurrection of a viable but sharply downsized domestic banking system on the ruins of its gargantuan international banking system which the government was unable to bail out. A third pillar is the enactment of capital controls and the work to gradually lift these to restore normal financial linkages with the outside world. An important result of the emergency legislation and the SBA is that the country has not been seriously affected by the European sovereign debt crisis from 2010. Despite a contentious debate with Britain and the Netherlands over the question of a state guarantee on the Icesave deposits of Landsbanki in these countries, credit default swaps on Icelandic sovereign debt have steadily declined from over 1000 points prior to the crash in 2008 to around 200 points in June 2011. The fact that the assets of the failed Landsbanki branches are now estimated to cover most of the depositor claims has had an influence to ease concerns over the situation.

Finally, the third major factor behind the resolution of the financial crisis was the decision by the government of Iceland to apply for membership in the EU in July 2009. While views on the feasibility of EU membership are quite mixed in Iceland, this action has served to enhance the credibility of the country on international financial markets. One sign of the success of the above efforts is the fact that the Icelandic government was successfully able to raise $1 billion with a bond issue on 9 June 2011. This development indicates that international investors have given the government and the new banking system, with two of the three biggest banks now in foreign hands, a clean bill of health.[189][190] The first two major measures were implemented by the government of Geir H. Haarde but carried out by also the government of Johanna Sigurdardottir, which then took the step to apply for EU membership.

http://en.wikipedia.org/wiki/2008%E2%80%932012_Icelandic_financial_crisis#Development

[sabrina 1]

29. Iceland did what all those countries should have done.

First they got rid of the corrupt politicians, and the corrupt bankers. They took control of their own country. Any borrowing they did was THEIR decision. It was not imposed on them as it was on Greece and other nations.

You need to read more about what happened in Iceland. That was the model to overcome the effects of the corruption that was worldwide. But instead, too many allowed themselves to be scared by threats from the Bankers' stooges in Brussels. Iceland was threatened also, but ignored the threats and dealt effectively with their own issues, including corruption.

The money they borrowed will be payed back.

Every country in Europe should have done what they did. Hopefully, although a little late, a few can start the process, starting with arresting the corrupt criminals who caused all of this and finding out where they have hidden the money they stole. So far, only Iceland has done this.

[dmallind]

28. apples and ...gyroscopes

Iceland did fuck all with sovereign debt, merely refused to nationalize the debts of Iceland's banks.

Greece will default on their loans, not Greek banks, without help. And sovereign debt default means no further loans means no way to meet government payroll, public assistance, infrastructure spending etc beyond the abysmal ability of the Greek government to collect taxes. The only two ways to handle that are a) drop the Euro and print Weimar-level amounts of drachmae, which means you end up selling anything of value to foreigners who have more credible currency while internal inflation robs everybody not rich enough to have oodles of foreign money of their real income or b) become an insular tyranny closed off from the rest of the world. I'm sure North Korea has some nice beaches and old ruins too, but nobody goes there bringing real money for a reason.

[sabrina 1]

30. Got anything to back up your opinion? Most credible financial analysts do not agree with you.

Provide some links to show that 'Iceland did fuck-all' to help themselves. Funny they are the only country in Europe whose economy is on the rebound, the only one who refused to be 'taken over' by Goldman Sachs 'technocrats'. So, whose decisions were more successful again? Iceland's or Brussel's? Show me one country that has acted according to the Bankers' Austerity program that is on the rebound and that is not still facing disaster??

[Berlin Expat]

31. Maybe the Greeks can

just sell their country, lock stock and barrel, back to the Turks.

The way things are going in Greece, I'd say in a year to eighteen months, if Erdogan shows up in Athens, and says, "Nice country; I'll take it! Here's, let's see..........100,000 Euro, some pocket lint, and I'll even throw in a donkey", a lot of Greeks at that point would raise their eyes to the heavens and say, "Thank you, God!" Yes, they may be patriotic, and some are even ultra-nationalistic, but let's face it.....you can't eat patriotic sentiment.

Many Turks I know wistfully dream of the halcyon days of the Ottoman Empire; I say, now's their chance.

[fasttense]

3. Sound like threats to me.

You Greek people better follow our poverty for Greece plan or else.

Since when did the EU and Germany decide it was their duty to get in the middle of the democratic process in Greece?

I hope the Greek people vote out every last Technocrat. Then Germany will have to go back to starting wars in order to pillage other countries.

[HotRodTuna]

4. As soon as they started paying their bills

"Since when did the EU and Germany decide it was their duty to get in the middle of the democratic process in Greece? "

And, incidentally, they're not involved in Greec's democratic process, since they obviously just changed their leadership. If Greece wants to get Germany's money however, then they have to play by the conditions agreed to.

If they don't, well, then they can nullify the deal I suppose and go it alone. They've done such a great job so far.

[Odin2005]

8. The EU is the German Empire without the Kaiser.

[Jack Rabbit]

13. Frau Merkel is not the Empress?

She tries to solve Germany's problems in the backyards of Greece, Italy and Spain. That sounds like something an Empress or a Kaiser would do.

[4th law of robotics]

34. How are the germans in the wrong here?

They paid their taxes and had a rational government.

Greece didn't. Now Greece is expecting endless money from Germany with no conditions. Doesn't work like that in the real world.

[librechik]

20. Revolt against the pirate looting of the banks!

Paying off those thieves is what makes austerity necessary. Get a government back that protects you against organized crime.

We have to do this everywhere. I'm looking at you, Germany.

[Nye Bevan]

24. If my deadbeat brother-in-law, who already owes me thousands, wants to keep borrowing more money

from me, is it unreasonable of me to attach certain conditions if he wants the checks to keep coming? Like to organize his finances and not continue to spend way more than he earns?

[David__77]

33. No. Which is why Greece should leave EU and build new financial bridges.

There are other countries in the global south and east that would be happy to help Greece.

[hack89]

35. Why do you think that "help" won't come with equally onerous strings attached?

those countries won't help Greece out of the goodness of their hearts. Greece needs money but the chances of never being repaid is pretty high.

And how do those other countries make up for the economic advantages of being part of the EU? Greek products would be subject to EU tariffs. Their people could not work at will within the EU. The cost of doing business in Europe would soar. The more likely result would be that Greek companies would simply relocate to neighboring EU countries.

[T_i_B]

36. How about Greece leaves the Euro rather then the EU?

Not a painless option by any stretch but might possibly be the least worst option.

Of course Eurozone rules say that countries that leave the Euro leave the EU but if they've got common sense you would hope for some proper negotiation on this point.

[hack89]

37. They are still broke regardless of what currency they are broke in. nt

[T_i_B]

38. But at least they would have control over their own currency

As opposed to having the ECB running monetary policy for them.

[hack89]

40. Judging from the massive currency outflows from Greek banks

there may not be much wealth left in Greece to have control over.

[T_i_B]

41. But then you could also ask...

If staying in the Euro is going to bring that money back anyway?

You could say that Greece should never have been allowed to join the Eurozone in the first place, but then I suppose that hindsight is a wonderful thing. I'm glad the UK never joined the Euro.

[hack89]

42. I don't know if the illusion of control really means much at the moment.

The Greeks need a shit ton of money real soon - they should be concentrating on the alligator closer to the boat before things get out of hand.

[T_i_B]

43. The obvious reply to that....

....is that as long as the Euro is about "control" will be an illusion.

[sti08dem]

39. Pain either way, feel bad for the good folks of Greece

Doesnt Greece have a primary deficit? As in, even if they told the banks to stick it they cant cover their monthly bills? If so, they need loans or they need to cut expenditures. Since the conditions of the loans will also hurt the economy and lead to fewer expenditures, I dont see the happy outcome.

The Greek people absolutely have the right to take control of their country and focus efforts, energy, and resources towards fixing their country as they choose. It is going to involve, unfortunately, a lot of pain for a lot of good people as the country simply cannot keep the promises already made to their people.

If people voted the way they did in order to build a better Greek society for all in the long-term, I applaud them.

If people voted the way they did because they wanted to keep their pensions and salaries and other immediate benefits the state has promised them I feel sad for them. It may be unfair and wrong, but those promises were broken long ago. Elections, alas, will not restore them.