# Anti-Austerity Party Wins in Greece: Will Greece Leave the Euro? **URL:** \ **Category:** Great Debates\ **Created:** [January 26, 2015, 5:14am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909 "2015-01-26T05:14:48Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![doorhinge](https://avatars.discourse-cdn.com/v4/letter/d/a5b964/32.png) [@doorhinge](https://boards.straightdope.com/u/doorhinge)\ **Post date:** [January 26, 2015, 8:04pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/41 "2015-01-26T20:04:31Z")
> [@PastTense](#): > > Consider the situation with Iceland. Following your line of reasoning Iceland should be a basket case because of the economic policies it followed. Instead: > > [http://www.globalcapital.com/article/nb9k34rc1yl3/iceland-enters-new-era](http://www.globalcapital.com/article/nb9k34rc1yl3/iceland-enters-new-era) Iceland ain’t Greece. Iceland wasn’t as financially screwed as Greece had become and it appears that Iceland has made more of an effort to get itself back on a sound financial footing. Following your line of reasoning, people shouldn’t talk about the situation in Greece. ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [January 26, 2015, 8:23pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/42 "2015-01-26T20:23:11Z")
> [@XT](#): > > Personally, I think what Germany is doing is not working and if they want to make it work they need to lighten up in the short term, but thinking they are doing it for fun is just ridiculous…your usual over the top load of crap and foam. They are doing it out of the idea that Greece needs to suffer for its economic sins. Austerity has no \*rational \*basis. It’s the latest round of the idea that poverty is a sign of moral failure that needs to be punished. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [January 26, 2015, 8:53pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/43 "2015-01-26T20:53:01Z")
> [@Stringbean](#): > > Greece allowed corruption and Euro-liberal over-generosity to destroy its fiscal credibility. > > Whether we want to whine about austerity or not, Greece was on the brink of bankruptcy, and it takes a long time for your economy to recover after flirtation with the hooded man in black. > > Liberals like Krugman want us to believe that, beyond saving them from default, Greece’s Euro partners should give them even more money as a stimulus. Somewhere down the line, (ill-defined, of course, in typical liberal fashion), the Greeks will find the time to correct the structural deficiencies that led them to the brink. > > Us conservatives see a broken system that needs fundamental changes. The liberals just want a band-aid. Krugman is careful to note that Greece is the example of where the government, not the banks, caused the problem. The banks helped, but the fault was with the government. In any case EU-wide austerity is causing EU-wide problems. If we cut Greece out of the picture entirely, the situation doesn’t look much better. The Greek economy is not that big. But it is clear that the austerity forced upon them so far hasn’t helped. Not to improve the economy, not to get the structural reforms required implemented. ---
**Author:** ![robert\_columbia](https://avatars.discourse-cdn.com/v4/letter/r/e79b87/32.png) [@robert\_columbia](https://boards.straightdope.com/u/robert_columbia)\ **Post date:** [January 26, 2015, 9:06pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/44 "2015-01-26T21:06:25Z")
> [@RTFirefly](#): > > ‘Austerity’ is an economic cult largely run by non-economists. And a national economy is nothing like a household’s budget. In a household, 99.99% of the economy is outside; if you spend less, it simply means you have more money or less debt, but your chances of being able to work are unchanged. > > In a national economy, if everybody spends less, then there are fewer jobs, and now everyone _has_ to spend less. You’re worse off than you were before. One person’s spending is someone else’s income, and if nobody’s spending, then everybody’s screwed… Good point. Suppose Greece decides to implement austerity by laying off schoolteachers and increasing class sizes to compensate, eager to save the money that they would have paid in salary. Now, you have a bunch of out-of-work schoolteachers who are no longer paying taxes but are now costing the government in welfare payouts. Due to the increasing costs of welfare, the government decides to mothball a few navy destroyers and send the sailors home. Now, you have a bunch of unemployed sailors collecting welfare. With welfare costs rising and tax revenue dropping, the government decides to ramp up austerity by cutting back on road repair. Now you have a few hundred or maybe even thousand road workers who get socked in their paycheck due to reduced hours and maybe even layoffs. They go on welfare. The government doesn’t know why their country is so messed up. Why can’t all these lazy people go get jobs? Maybe we need some more austerity. ---
**Author:** ![Sitnam](https://avatars.discourse-cdn.com/v4/letter/s/6a8cbe/32.png) [@Sitnam](https://boards.straightdope.com/u/Sitnam)\ **Post date:** [January 26, 2015, 9:14pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/45 "2015-01-26T21:14:50Z")
> [@Voyager](#): > > Krugman is careful to note that Greece is the example of where the government, not the banks, caused the problem. The banks helped, but the fault was with the government. Massive banks in Germany and France loaned Greece far more than they had any reason to because they would never have to fear Greece devaluing it’s currency and instead would get their money back with interest when bailed out by wealthier governments avoiding a default on the loan. I’d say that’s a little farther in than ‘helping’. They helped like a Gettaway Driver helps. This wasn’t an accident, this was a glaringly large loophole in the entire economic system. This wasn’t a failure of government, this was invested interests letting the powerful steal with both hands. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 26, 2015, 9:21pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/46 "2015-01-26T21:21:45Z")
> [@Der\_Trihs](#): > > They are doing it out of the idea that Greece needs to suffer for its economic sins. Austerity has no \*rational \*basis. It’s the latest round of the idea that poverty is a sign of moral failure that needs to be punished. Again, bullshit. Austerity, defined as cutting spending and increasing revenue absolutely has utility in some instances. It’s simply not a silver bullet that is good for every situation…just like increasing spending by the government to spur a flagging economy is good in some situations but not in all situations. Your absurd idea that this is all about purposely causing pain to the Greeks and has no other basis is, as with most of your views on politics, simply ridiculous. Grow up…there is a broader world out there than your narrow little black and white view. ---
**Author:** ![lisiate](https://avatars.discourse-cdn.com/v4/letter/l/f05b48/32.png) [@lisiate](https://boards.straightdope.com/u/lisiate)\ **Post date:** [January 26, 2015, 9:31pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/47 "2015-01-26T21:31:10Z")
Well Tsipras has started out strongly - he won’t wear a tie until the [Greek debt](http://www.theguardian.com/world/2015/jan/26/greece-anti-austerity-government-alexis-tsipras)is renegotiated! And his first official act as Prime Minister was to lay a wreath at the site of a German massacre from WWII. ---
**Author:** ![doorhinge](https://avatars.discourse-cdn.com/v4/letter/d/a5b964/32.png) [@doorhinge](https://boards.straightdope.com/u/doorhinge)\ **Post date:** [January 26, 2015, 9:31pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/48 "2015-01-26T21:31:55Z")
> [@Der\_Trihs](#): > > They are doing it out of the idea that Greece needs to suffer for its economic sins. Austerity has no \*rational \*basis. It’s the latest round of the idea that poverty is a sign of moral failure that needs to be punished. Hahahaha. You’re a hoot. Neither Germany, or any other nation, owes Greece a functional government, or a working tax system. Greece can chose to work with governments that have proven that they know how to get the job done, or Greece can go back to doing whatever they were doing when their financial roof caved-in on their heads. ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [January 26, 2015, 9:41pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/49 "2015-01-26T21:41:01Z")
> [@Fuzzy\_wuzzy](#): > > The Greeks all but defaulted last time. The powers that be simply gave it another name - a haircut. It’s not just “another name”. A sovereign haircut is a default. By definition. They’re not fulfilling their obligations, so it’s a default. People call it a “haircut” to indicate that the default is not a 100% repudiation of the debt, which is actually rare. The word emphasizes that some cuts are steeper than others. According to [at least some research](http://www.voxeu.org/article/bad-haircut-not-forgotten-quickly), sovereign defaults with higher haircuts can cause more long-term damage. > [@](#): > > What are the financial costs of a sovereign default? This column presents new data on investor losses – haircuts – in all sovereign debt restructurings between 1970 and 2010. Countries imposing high haircuts take significantly longer to reaccess capital markets after the event and subsequently pay higher interest rates. This isn’t the only definition of “haircut” in finance, but in the context of default, the meaning is clear. A sovereign haircut is a default. The question is the size of the default. > [@RickJay](#): > > Iceland is not Greece and had completely different problems (and have different strengths; Icelanders actually pay their taxes.) Suggesting Greece follow Iceland’s solutions is akin to saying that since antibiotics work really well for strep throat, you should take them for a broken arm. It’s worth pointing out, too, that Iceland has its own currency. Although really, the Greek economic problems are so bad, having their own currency might not have helped. “Massive inflation” is nearly always a good prediction for a country so poorly governed. > [@XT](#): > > They care because if Greece leaves the Euro they will basically default on their current debt, which is pretty sizable. In addition, if the current austerity is bad, the austerity they will get by going to their own currency (presumably the Dracuma or something like that) will be worse. Drachma. I have to admit, I’m intensely curious to see what would happen if Greece got bounced from the eurozone. I speak purely in the interest of science. ---
**Author:** ![Fuzzy\_wuzzy](https://avatars.discourse-cdn.com/v4/letter/f/a8b319/32.png) [@Fuzzy\_wuzzy](https://boards.straightdope.com/u/Fuzzy_wuzzy)\ **Post date:** [January 26, 2015, 9:47pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/50 "2015-01-26T21:47:54Z")
> [@robert\_columbia](#): > > Good point. Suppose Greece decides to implement austerity by laying off schoolteachers and increasing class sizes to compensate, eager to save the money that they would have paid in salary. Now, you have a bunch of out-of-work schoolteachers who are no longer paying taxes but are now costing the government in welfare payouts. Due to the increasing costs of welfare, the government decides to mothball a few navy destroyers and send the sailors home. Now, you have a bunch of unemployed sailors collecting welfare. With welfare costs rising and tax revenue dropping, the government decides to ramp up austerity by cutting back on road repair. Now you have a few hundred or maybe even thousand road workers who get socked in their paycheck due to reduced hours and maybe even layoffs. They go on welfare. The government doesn’t know why their country is so messed up. Why can’t all these lazy people go get jobs? Maybe we need some more austerity. Except some of these schoolteachers, sailors and road workers emmigrate abroad; some take jobs as road sweepers; all eventually die off. There is never a good time to implement austerity. If I thought for a second that austerity would be implemented during the good times then I would be more inclined to call for less of it today. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [January 26, 2015, 9:48pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/51 "2015-01-26T21:48:41Z")
> [@Der\_Trihs](#): > > What? You are the one arguing in favor of killing massive numbers of Greeks, not me. Then why are you trying to shout down their best chance for saving more lives? Let’s say, for example, that you are dealing with a deadbeat dad. You can either argue that he should go to jail, or that he should stay free. If he goes to jail, the mom will have to work and the five children will be cramped into a single room, with poor light, insufficient nourishment, and they’ll grow up stunted, with poor health, and a shortened lifespan. If the dad stays with the family, he will spend all the money he can, gambling, getting drunk, etc. He won’t let the wife work, and when he catches her saving money so that she can keep the family alive, he beats her. He molests his own children, and will probably end up killing at least one (if not more) of them. The children who survive will grow up stunted, with poor health, a shortened lifespan, unable to do much physical labor due to poorly healed bone fractures, and suffering PTSD. Now you could make the argument that dad is a larger earner than mom, so he’s doing a better job of growing the economy. But since the size and growth of the economy isn’t relevant to the situation, making that argument is just being obtuse and making a bad situation worse. Yes, in a fantasy, Authoritarian god-emperor sort of world, you could go in and cast a spell on dad, changing his personality into that of a benevolent, caring sort. Or in a non-fantasy, Authoritarian god-emperor sort of world, you could hire people to watch dad all day and make him behave well. But that’s not a solution that’s anywhere on the horizon. Delusions of a perfect world, ruled by you, aside, the only options that are on the table are “dad in jail” or “dad blowing his stash and beating his kids”. Neither is good, but arguing that Keynesian economics dictates that we should let dad stay with his family is not just stupid, it’s cruel. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [January 26, 2015, 10:44pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/52 "2015-01-26T22:44:56Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Maybe I’m missing something, but why should the other Eurozone states care if Greece stays? > [@Sage\_Rat](#): > > Why do you care whether Georgia stays part of the US? Why would I? It’d be a bit tricky for me to drive north if they leave, but frankly I couldn’t care less if Georgia remains part of the Union (with the possible exception of the NFL divisional realignment that might be required if the Falcons decide to stay in Atlanta.) In any case, Greece is a wholly sovereign and independent state. Georgia is not. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [January 26, 2015, 11:11pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/53 "2015-01-26T23:11:28Z")
It has been an ideal since the end of WW2 that Europe finally put their nationalist tendencies to rest and unify as a singular political entity. Greece leaving the EU would signal a failure of sorts for that dream to come to fruition. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [January 26, 2015, 11:16pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/54 "2015-01-26T23:16:06Z")
They’re talking about leaving the common currency, not the EU. ---
**Author:** ![Fuzzy\_wuzzy](https://avatars.discourse-cdn.com/v4/letter/f/a8b319/32.png) [@Fuzzy\_wuzzy](https://boards.straightdope.com/u/Fuzzy_wuzzy)\ **Post date:** [January 26, 2015, 11:54pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/55 "2015-01-26T23:54:07Z")
> [@Stringbean](#): > > It has been an ideal since the end of WW2 that Europe finally put their nationalist tendencies to rest and unify as a singular political entity. > > Greece leaving the EU would signal a failure of sorts for that dream to come to fruition. That’s the paradox of the single currency. So far it is responsible for increasing nationalist tendencies on the continent. ---
**Author:** ![JRDelirious](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jrdelirious/32/9531_2.png) [@JRDelirious](https://boards.straightdope.com/u/JRDelirious)\ **Post date:** [January 27, 2015, 12:31am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/56 "2015-01-27T00:31:25Z")
> [@Hellestal](#): > > It’s worth pointing out, too, that Iceland has its own currency. Right. They had that additional degree of freedom in what moves could be made. Plus IIRC, in the course of Iceland’s banking-sector meltdown (where a bunch of bankers went to jail, mind you), the legitimacy of the state itself was not put in question, and the general populace was in better economic and social shape to begin with so they could absorb the hit better. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [January 27, 2015, 1:04am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/57 "2015-01-27T01:04:58Z")
> [@Fuzzy\_wuzzy](#): > > That’s the paradox of the single currency. So far it is responsible for increasing nationalist tendencies on the continent. Score another victory for wide-eyed liberalism. ---
**Author:** ![Zakalwe](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/zakalwe/32/270_2.png) [@Zakalwe](https://boards.straightdope.com/u/Zakalwe)\ **Post date:** [January 27, 2015, 3:14am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/58 "2015-01-27T03:14:57Z")
> [@Stringbean](#): > > Score another victory for wide-eyed liberalism. Score another victory for jingoistic threadshits. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 27, 2015, 3:53am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/59 "2015-01-27T03:53:28Z")
> [@Zakalwe](#): > > Score another victory for jingoistic threadshits. Come see the irony inherent in the system…help, HELP! The thread is being digressed!!! ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [January 27, 2015, 4:36am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/60 "2015-01-27T04:36:10Z")
> [@Zakalwe](#): > > Score another victory for jingoistic threadshits. A lot of ideas sound great on paper. Except this piss-shit excuse for a rebuttal. You disagree that the unified currency is contributing to nationalist tensions? That the Germans are more than happy to fork over billions of Euro to the insolent Greeks? That the Greeks love the embarrassment of being their big brothers’ lapdog? All under the happy baby-boomer banner of “At last! A united Europe!” Please, enlighten us. Your contribution thus far has been…short and insufficient. [Previous page](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909.md?page=2) [Next page](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909.md?page=4)