The Greeks all but defaulted last time. The powers that be simply gave it another name - a haircut. Germany and others have already taken a haircut on the Greek debt. Whether they are willing to once again is another matter. I have been reading some analysis that suggests Merkel will have to play tough with Greece. That if she doesn’t then austerity is dead throughout Europe.
Oh well, the fun and games of this single currency experiment continues. We in Britain should forever name and shame the shysters who advocated we ever join.
The problem is that austerity has NOT changed those underlying problems. Syriza was partially elected because they want the rich shipping magnates and football club owners to finally pay taxes. That is really the reason they have gained so much lately.
There is a big difference between leaving the Euro (the currency) and the EU (the European Union–the political-economic intergovernmental organization). There are a number of countries which are members of the EU but don’t use the Euro–The United Kingdom with its Pound is the biggest.
There are campaign promises and there are campaign promises. It seems that Alexis Tsipras wants to appeal to the largest number of disenfranchised voters. Once in power, he doesn’t actually have to dump the Euro or the EU. Like hope and change, it’s the thought that counts.
If Greece again attempts to make it on it’s own, Greece will go bankrupt. Which EU countries will allow Greece’s fiscally irresponsible policies to drag them down also?
Consider the situation with Iceland. Following your line of reasoning Iceland should be a basket case because of the economic policies it followed. Instead:
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.
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. Oh, they can print a ton of new Dracuma and inflate away some of their issues, but their economy would take a complete nose dive even over the current tail down they have…which means that Europe is going to have a politically and socially unstable country basically on their borders. And, of course, this could tip over several other countries in similar boats (though my guess is once they see Greece basically melt down the rest of the way by trying to go to their own currency they will be less inclined to consider that option).
The Europeans care of Greece stays for much the same reasons…the current austerity the Greeks have tried is obviously not working, their unemployment is sky high and GDP is still in free fall, and politically the Greeks have been against it from day one, and are probably at this point in a vicious cycle…they can’t cut spending, really, and can’t raise revenue either yet have to do both in order to keep the bailouts coming. They have so completely fucked themselves that I don’t see any good way out…all paths go from really bad to catastrophic meltdown afaict (I’m not an economist though so maybe someone else has better insights).
I agree with much of what Syriza wants to implement, including a substantial haircut on the debt. And clearly a throughout destruction of the old ways and self-serving corrupt oligarchy which misruled the country in the past many decades would be highly desirable. The problem with the term “austerity” is that it means different things to different people. In Greece many would say it means cutting down on public employees who are only there due to previous governments’ clientelism. Many Italians would say austerity is breaking up of various monopolies, unsustainable early retirement plans, etc. It’s not really possible to have a discussion on austerity without a precise definition.
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.
What? You are the one arguing in favor of killing massive numbers of Greeks, not me. Austerity is about cruelty, not “saving lives”; any Greek who dies is a victory for austerity, since it proves their suffering is genuine. Austerity is the economic equivalent of flagellation; blood proves devotion. And it has about as much rational basis.
And how do you intend to enforce it if the Greeks decide not to go along with their own deaths? Is the EU willing to send soldiers to conquer and occupy Greece, and force them to starve at gunpoint?
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What? You are the one arguing in favor of killing massive numbers of Greeks, not me. Austerity is about cruelty, not “saving lives”; any Greek who dies is a victory for austerity, since it proves their suffering is genuine. Austerity is the economic equivalent of flagellation; blood proves devotion. And it has about as much rational basis.
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What a complete load of horseshit. The sad thing is you actually believe this. :smack:
The Greeks are fucked, regardless of what they do. Their only real hope is bailouts from the EU and a long leash, which they aren’t likely to get because they fucked themselves by getting themselves into this cluster fuck in the first place. They have NO good options, only less bad ones. 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.