# 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:** 8
**Author:** ![camille](https://avatars.discourse-cdn.com/v4/letter/c/22d042/32.png) [@camille](https://boards.straightdope.com/u/camille)\ **Post date:** [January 31, 2015, 11:54pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/141 "2015-01-31T23:54:15Z")
> [@Zakalwe](#): > > And the bankers who did it have been punished with a couple of haircuts already. > > Here’s the thing you can’t get away from: > > Nobody _has_ to lend to Greece in the future. If they fuck this up, they’re in serious, serious trouble. They will become a country with few, if any, options. I’m not disagreeing with that, but I wouldn’t say the banks were “punished”. Risk is the cost of doing business, and they knew that going in. Did they forfeit their origination fees? Weren’t they mostly bailed out already by EU governments? ---
**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 31, 2015, 11:58pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/142 "2015-01-31T23:58:42Z")
> [@camille](#): > > But it wasn’t “sound banking strategy” to loan Greece the money in the first place, was it? > > (And they are still being offered more, which the new government is supposedly refusing) A lot of the loans Greece got prior to their melt down and prior to the EU giving them bailouts with a lot of strings attached were gotten under [false pretenses](http://en.wikipedia.org/wiki/Greek_Financial_Audit,_2004), so to speak. Since then, as well as certain strings being attached they are paying a lot more interest on their loans due to the risky nature of loaning them money…and they are getting those loans mostly because of their willingness to at least nominally go along with the restructuring the EU is pushing on them. So, it sort of IS ‘sound banking strategy’, unless of course they end up leaving the EU/EZ and the Euro and going to their own currency. ---
**Author:** ![camille](https://avatars.discourse-cdn.com/v4/letter/c/22d042/32.png) [@camille](https://boards.straightdope.com/u/camille)\ **Post date:** [February 1, 2015, 12:07am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/143 "2015-02-01T00:07:39Z")
> [@XT](#): > > A lot of the loans Greece got prior to their melt down and prior to the EU giving them bailouts with a lot of strings attached were gotten under [false pretenses](http://en.wikipedia.org/wiki/Greek_Financial_Audit,_2004), so to speak. Since then, as well as certain strings being attached they are paying a lot more interest on their loans due to the risky nature of loaning them money…and they are getting those loans mostly because of their willingness to at least nominally go along with the restructuring the EU is pushing on them. So, it sort of IS ‘sound banking strategy’, unless of course they end up leaving the EU/EZ and the Euro and going to their own currency. I am familiar with all that. And who helped them cook the books, too. They never should have been accepted by EU/EZ in the first place. But here we are. Will they stay? Should they stay? (to get back to the questions in the OP) ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 1, 2015, 1:06am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/144 "2015-02-01T01:06:53Z")
Politically Tsipras is walking a very fine line. The sum total of his campaign promises make staying in the Eurozone (and possibly by extension the EU) impossible. However, if those are just a strong bargaining position and he’s willing to agree to keeping Greece’s spending under some level of Eurozone standard (right now Greece is doing good at this, but Tsipras’ proposed economic policies would change that very quickly), and to improve tax collections in exchange for a repudiation of debt I think that’d be a good deal for the Eurozone to take. Or my expected outcome: a further restructuring to make the debt-servicing payments even less. Greece actually pays less as a % of GDP on debt servicing now (with debt at 170% of GDP) than it did with debt at 100% of GDP, so the restructuring has already been generous–but if it were even more generous then the practical difference between restructuring and debt forgiveness is minor and I think that’d be a good deal for Greece to take. With hindsight being 20/20, it’s absolutely true that Greece should not have been brought into the Eurozone, and frankly except for fraud they didn’t meet the criteria the Eurozone was supposed to be using when it assessed potential new members. But that ship has sailed, I think as long as the Greeks can budge from “repudiate debts and let us spend away as much as we want”, then compromise can be found. For Tsipras personally, some 3/4ths of his electorate wants to stay in the Eurozone, so politically I think it would be a significant gamble for him to recklessly refuse to negotiate but instead try to bargain from an absolutist position. Right now we really don’t know what he will do, but we’ll find out quickly I suspect. FWIW I cannot blame the Greeks for voting for Syriza. Their choices were between Stalinists, Nazis, and two parties that were hopelessly corrupt, and newcomer Syriza. Even for someone with widely different economic positions than Syriza I would’ve had a hard time voting for any of the other major parties as well. ---
**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:** [February 1, 2015, 1:27am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/145 "2015-02-01T01:27:20Z")
> [@Martin\_Hyde](#): > > Politically Tsipras is walking a very fine line. The sum total of his campaign promises make staying in the Eurozone (and possibly by extension the EU) impossible. However, if those are just a strong bargaining position and he’s willing to agree to keeping Greece’s spending under some level of Eurozone standard (right now Greece is doing good at this, but Tsipras’ proposed economic policies would change that very quickly), and to improve tax collections in exchange for a repudiation of debt I think that’d be a good deal for the Eurozone to take. Or my expected outcome: a further restructuring to make the debt-servicing payments even less. Greece actually pays less as a % of GDP on debt servicing now (with debt at 170% of GDP) than it did with debt at 100% of GDP, so the restructuring has already been generous–but if it were even more generous then the practical difference between restructuring and debt forgiveness is minor and I think that’d be a good deal for Greece to take. > > With hindsight being 20/20, it’s absolutely true that Greece should not have been brought into the Eurozone, and frankly except for fraud they didn’t meet the criteria the Eurozone was supposed to be using when it assessed potential new members. But that ship has sailed, I think as long as the Greeks can budge from “repudiate debts and let us spend away as much as we want”, then compromise can be found. > > For Tsipras personally, some 3/4ths of his electorate wants to stay in the Eurozone, so politically I think it would be a significant gamble for him to recklessly refuse to negotiate but instead try to bargain from an absolutist position. Right now we really don’t know what he will do, but we’ll find out quickly I suspect. > > FWIW I cannot blame the Greeks for voting for Syriza. Their choices were between Stalinists, Nazis, and two parties that were hopelessly corrupt, and newcomer Syriza. Even for someone with widely different economic positions than Syriza I would’ve had a hard time voting for any of the other major parties as well. Isn’t the problem with this though that if Greece receives greater financial assistance then Portugal, Spain etc will look for the same sort of deal. If voters in Spain and Portugal see Greece vote in an anti austerity party that successfully plays hardball and “wins” against the EU then these countries will be tempted to do the same. It’s why I don’t see Merkel playing tough with Greece just for the hell of it(these accusations were made earlier in this thread). She’s playing hardball for very practical political reasons. If only the financial “crisis” were limited to Greece then this whole thing would be a lot easier to solve. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 1, 2015, 1:41am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/146 "2015-02-01T01:41:33Z")
Austerity as Merkel pushes it really doesn’t make a lot of sense for most Eurozone countries, for one, and countries like Spain and Portugal can afford to to spend more without it being a real problem. Greece is really the only country like Greece atm in the Eurozone, Portugal/Italy/Spain are all much more robust. ---
**Author:** ![SciFiSam](https://avatars.discourse-cdn.com/v4/letter/s/47e85d/32.png) [@SciFiSam](https://boards.straightdope.com/u/SciFiSam)\ **Post date:** [February 2, 2015, 12:15pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/147 "2015-02-02T12:15:56Z")
I’ve been trying to go on holiday to Greece (from England) for the past couple of years and it’s always been ridicuously expensive compared to the rest of the Med, and the explanation I was given was the Euro. Does anyone know if that’s true? > [@ISiddiqui](#): > > To be fair, austerity HAS led to an increase in Greek children (at least) starving: > > [http://www.nytimes.com/2013/04/18/world/europe/more-children-in-greece-start-to-go-hungry.html?hp&\_r=1&](http://www.nytimes.com/2013/04/18/world/europe/more-children-in-greece-start-to-go-hungry.html?hp&_r=1&) That article mentions some organisations that fund school lunches in some areas of Greece. So wouldn’t it help Greece to give some similar specific stimuli? Free school lunches across the whole country, extra access to an EU fund for adult training for skilled jobs (mechanics, etc), with basic living grants as well as paying the fees, money paid to Greece but only for education, same for healthcare. Basically, grants, but targetted, to enable the country to keep some of its essential people in jobs, and train more people, targetted on jobs which are annually payrolled so can’t avoid tax. A lot of the Greek economy is self-employed, hence the tax evasion, but if you can at least make sure that the actual taxpayers are earning money (and paying tax) then they will spend money at some of those self-employed businesses. > [@Shodan](#): > > One of the many economic problems Greece faces is that [Greeks don’t pay their taxes](http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&ved=0CCUQFjAB&url=http%3A%2F%2Fwww.washingtonpost.com%2Fblogs%2Fwonkblog%2Fwp%2F2012%2F07%2F09%2Fhow-greek-tax-evasion-sunk-the-global-economy%2F&ei=-_7IVIHpBcOgNoL-gZgI&usg=AFQjCNEqO2oKadj0lG6qA0fxBSBXHRqkBA&sig2=ncVbFpPpNsa04GG0p2OjbQ&bvm=bv.84607526,d.eXY). One cannot really refund something that was not paid in the first place. > > And I am not sure (still) what you mean by redirecting the money to the people instead of the bankers. One of the earlier attempts to restructure the Greek debt was to impose a [53.5% haircut on private holders of Greek bonds](http://en.wikipedia.org/wiki/Greek_government-debt_crisis). IOW there was no money to redirect - the Greek government simply did not repay the money they had been loaned. How does one redirect something like that? > > Regards, > Shodan A tax refund to all those who paid, perhaps, what was he was thinking of? Granted, lots of Greeks didn’t. They will lose out from this, which is fine. They will benefit indirectly. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [February 2, 2015, 2:07pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/148 "2015-02-02T14:07:23Z")
> [@SciFiSam](#): > > A tax refund to all those who paid, perhaps, what was he was thinking of? Granted, lots of Greeks didn’t. They will lose out from this, which is fine. They will benefit indirectly. Where do the Greeks get the money to refund? And again - if increased spending will fix the Greek economy, then so far they have receive a half trillion or so to spend. It does not seem to have fixed it, and that includes about half the debt being written off instead of repaid. What is the evidence that more of the same will work better? Regards, Shodan ---
**Author:** ![camille](https://avatars.discourse-cdn.com/v4/letter/c/22d042/32.png) [@camille](https://boards.straightdope.com/u/camille)\ **Post date:** [February 2, 2015, 11:37pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/149 "2015-02-02T23:37:03Z")
> [@Shodan](#): > > Where do the Greeks get the money to refund? > > And again - if increased spending will fix the Greek economy, then so far they have receive a half trillion or so to spend. It does not seem to have fixed it, and that includes about half the debt being written off instead of repaid. What is the evidence that more of the same will work better? > > Regards, > Shodan I didn’t think he was talking about tax renevues being redirected. I assumed he was talking about how [all but about 11% of the bailout money went straight back to the holders of Greek debt by one route or another, rather than spent on the Greek people.](http://www.forbes.com/sites/francescoppola/2015/01/31/so-whose-problem-is-greek-debt-anyway/) ---
**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:** [February 3, 2015, 12:31am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/150 "2015-02-03T00:31:55Z")
You know, I’ve changed my mind here. The Greek debt should be completely forgiven - accompanied by an absolute moratorium on any EU country lending Greece another fucking dime that is backstopped by the EU. Let’s see how that works out for Greece. It’ll be a good object lesson. ECON101 students will have material for decades. ---
**Author:** ![Capt.Ridley\_s\_Shooting\_Party](https://avatars.discourse-cdn.com/v4/letter/c/cc9497/32.png) [@Capt.Ridley\_s\_Shooting\_Party](https://boards.straightdope.com/u/Capt.Ridley_s_Shooting_Party)\ **Post date:** [February 3, 2015, 9:37am UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/151 "2015-02-03T09:37:37Z")
> [@Stringbean](#): > > Well then, we agree completely. The EU was a well-intentioned liberal experiment and we are witnessing the strains that may break it apart. “Liberal” in the British sense, not the American one. The bedrock of the EU is free movement of goods, capital and labour. It’s essentially a mechanism for removing trade barriers. Further, the failure of the EZ is not the same as failure of the EU. The EZ may fall apart, but the EU will continue to exist. ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [February 3, 2015, 1:50pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/152 "2015-02-03T13:50:27Z")
> [@Zakalwe](#): > > You know, I’ve changed my mind here. The Greek debt should be completely forgiven - accompanied by an absolute moratorium on any EU country lending Greece another fucking dime that is backstopped by the EU. Let’s see how that works out for Greece. It’ll be a good object lesson. ECON101 students will have material for decades. ECON102. For every reckless borrower there’s a reckless lender. ---
**Author:** ![Hector\_St\_Clare](https://avatars.discourse-cdn.com/v4/letter/h/b5ac83/32.png) [@Hector\_St\_Clare](https://boards.straightdope.com/u/Hector_St_Clare)\ **Post date:** [February 3, 2015, 6:30pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/153 "2015-02-03T18:30:41Z")
> [@Martin\_Hyde](#): > > Politically Tsipras is walking a very fine line. The sum total of his campaign promises make staying in the Eurozone (and possibly by extension the EU) impossible. However, if those are just a strong bargaining position and he’s willing to agree to keeping Greece’s spending under some level of Eurozone standard (right now Greece is doing good at this, but Tsipras’ proposed economic policies would change that very quickly), and to improve tax collections in exchange for a repudiation of debt I think that’d be a good deal for the Eurozone to take. Or my expected outcome: a further restructuring to make the debt-servicing payments even less. Greece actually pays less as a % of GDP on debt servicing now (with debt at 170% of GDP) than it did with debt at 100% of GDP, so the restructuring has already been generous–but if it were even more generous then the practical difference between restructuring and debt forgiveness is minor and I think that’d be a good deal for Greece to take. > > With hindsight being 20/20, it’s absolutely true that Greece should not have been brought into the Eurozone, and frankly except for fraud they didn’t meet the criteria the Eurozone was supposed to be using when it assessed potential new members. But that ship has sailed, I think as long as the Greeks can budge from “repudiate debts and let us spend away as much as we want”, then compromise can be found. > > For Tsipras personally, some 3/4ths of his electorate wants to stay in the Eurozone, so politically I think it would be a significant gamble for him to recklessly refuse to negotiate but instead try to bargain from an absolutist position. Right now we really don’t know what he will do, but we’ll find out quickly I suspect. > > FWIW I cannot blame the Greeks for voting for Syriza. Their choices were between Stalinists, Nazis, and two parties that were hopelessly corrupt, and newcomer Syriza. Even for someone with widely different economic positions than Syriza I would’ve had a hard time voting for any of the other major parties as well. Do you have any evidence that the KKE were ‘Stalinist’? They seem like the most principled of all the parties on the Greek scene to me, and I’m hard pressed to see anything Stalinist about them. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [February 3, 2015, 7:27pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/154 "2015-02-03T19:27:29Z")
> [@tagos](#): > > ECON102. For every reckless borrower there’s a reckless lender. Not really. Lenders are typically far more cautious than borrowers. Thus we don’t see the failure rate among lenders that we see among, home-owners, to use an example. But I guess I see your point… ---
**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:** [February 3, 2015, 9:28pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/155 "2015-02-03T21:28:41Z")
> [@tagos](#): > > ECON102. For every reckless borrower there’s a reckless lender. Certainly when they know they’re “too big to fail” and can count on a bailout they get reckless, why not? Privatized profit and socialized risk is a wonderful thing if you’re the potential profiteer. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 3, 2015, 10:39pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/156 "2015-02-03T22:39:12Z")
> [@Rune](#): > > Syriza has moderated many of its views over the last months. It’s now in favour of keeping the euro, and will likely keep moderating and find a solution whereby it can fulfil some of its election promises within the ez. > > Also many of the people who voted Syriza didn’t so much do it for its policies, as a way to toss out the old corrupt bunch of politicians of the other parties. > > Greece was absurdly corrupt, had a bureaucracy of byzantine complexity, impossible taxation laws that (with the corrupt tax officials) would let anyone with money pass on paying, an overstaffed unproductive public sector, a democracy that could best be described as clientelism, an absurdly hostile business climate, etc. After years of working on it, some of those issues are now relatively better. If those changes are what you call austerity, then they need more. Why would they give the rich a pass on taxes? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 3, 2015, 10:48pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/157 "2015-02-03T22:48:17Z")
> [@XT](#): > > 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. “and increasing revenue” So if collecting taxes from the tax cheats isn’t enough, they should raise taxes right? ---
**Author:** ![YogSothoth](https://avatars.discourse-cdn.com/v4/letter/y/8edcca/32.png) [@YogSothoth](https://boards.straightdope.com/u/YogSothoth)\ **Post date:** [February 3, 2015, 10:50pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/158 "2015-02-03T22:50:24Z")
So has the new party taken office yet? What kind of a timeline are we to expect that these negotiations to leave or stay will start? ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [February 3, 2015, 10:52pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/159 "2015-02-03T22:52:32Z")
When one side says, “Keep the bread and circuses going,” and the other says, “Sorry, party’s over, time to tighten the belt,” it’s not surprising which side the voters choose. ---
**Author:** ![lisiate](https://avatars.discourse-cdn.com/v4/letter/l/f05b48/32.png) [@lisiate](https://boards.straightdope.com/u/lisiate)\ **Post date:** [February 3, 2015, 10:57pm UTC](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909/160 "2015-02-03T22:57:04Z")
They took office almost immediately and the new finance minister has been shuttling around European capitals all week. He was [in London on Monday](http://www.theguardian.com/politics/2015/feb/02/greece-debt-standoff-george-osborne-urges-athens-brussels-deal). The big meeting, with the ECB is set down for Wednesday. Varoufakis also seems to be backing off talks of a debt writedown, instead suggesting a rejigging of payment schedules to be [linked to growth rates](http://www.theguardian.com/business/2015/feb/03/greece-finance-minister-raises-hopes). [Previous page](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909.md?page=7) [Next page](https://boards.straightdope.com/t/anti-austerity-party-wins-in-greece-will-greece-leave-the-euro/710909.md?page=9)