Follow by Email

Thursday, February 9, 2017

The Bitch Is Back!

Suddenly, the Greek crisis is back. Or so all the media have reported in recent days. In actual fact, the Greek crisis is neither back nor has it ever been gone - it's just there!

The question is only whether the crisis is dormant or coming back to life. It is dormant when there are no 'decision points' (no major payments due, no major deadlines to be kept, etc.). When a new tranche has just been disbursed with a new review date set in 6 months, one can rest assured that there will be no Greek crisis until 6 months later. When there are decision points all the time, there will be a Greek crisis all the time. We are now, once again, approaching decision points. And the bitch is back.


As always, the Greek Analyst nails it above. I think even if all of Greece's debt were forgiven, the problems would continue. They wouldn't be felt for a number of years because, starting from zero, Greece could again start borrowing heavily. But that wouldn't change the process: as soon as a decision point comes up, the crisis returns.

Marcus Walker of the WSJ put together a coherent thread about the timeline of the Greek crisis where he traces Greece's problems to the fiscal mismanagement from 2002-09. Not quite! I believe that today's Greek crisis has its origins back in the early 1980s when two tectonic movements reinforced each other: the spendthrift policies of the PASOK/Papandreou (father) government and the financial benefits of having joined the EU. This is not to blame PASOK alone. On the contrary, PASOK started it and when ND came to power, they tried to be a cheap copy of PASOK.

Until there is a general acceptance of this development on the part of the Greek government and the Greek people, Greece will be in crisis for the simple reason that one only changes behavior if one realizes that one has done wrong.

As long as those who uncover and correct scandals are sued by the Greek government while those who caused the scandals walk free, the Greek crisis will not be 'owned' by Greeks.

Footnote: Interestingly, in most of the private conversations I have with Greek friends there is agreement on the above.

105 comments:

  1. Need to ask V how he came to see the light. And make sure other citizen meet the same stimuli on their road to Damascus

    ReplyDelete
    Replies
    1. Hi Jerome,

      Aside from being frugal all my life, while moving and now living in Greece, i see our problems of everyday. Likewise I know our character because I found myself. I was brainwashed a bit by the socialists ideology i must say, in moving to Greece. (This more out of care for my countrymen/neighbor and lesser for the ideologies.)

      On personal level, i have stopped blaming others for what is in my personal orbit of responsibility. Meanwhile this mentality helps the general mentality in Greece.

      I believe another big problem is we still have yet to find who we are/were. Greeks were never the irresponsible. We as characters are quite the opposite. I believe we were brainwashed into becoming irresponsible. On many levels. And it takes decades to create this brainwash. Local and Foreign but regardless, we are to blame for allowing ourselves to be brainwashed. I believe our modern history of suffrage also helped a great deal to be allowed to be brainwashed easier.

      That brings us today or the de brainwashing. Indeed we have some serious structural issues. I do in part agree with Mr. Kastner's comment that if we were relieved of all debt we would be in a mess in an x amount of time. I say "x" because it depends on what would be done after the relief. Knowing our current political system, our public system mentality (not all of them though), our selfish and vengeful selves, most probably Mr. Kastner statement would hold true, regardless of the well minded private work mannerism we have today, which outperforms even Germany in my POV. I even believe that with the memorandums for another 5 years and all issue implemented (the infrastructure ones) which would provide a solid base of a new beginning, we would need to be closely watched, as to maintain our good behavior. Thereafter maybe the mentality would change or brainwashed in the right direction, we would be ok and find ourselves again.

      Aside from who we are though there is a great deal of foul play on our creditors both eu and imf institutions. Likewise the foreign media and especially the mainstream media. I really can't get into this right now. I am sure you all see the foul play yourselves. The lies, the manufactured promises and the leverage of big vs small. Truth be said, the lot of them are to blame. Greek Political system, Eu institutions, IMF, ECB. All of them have done quite a crappy job with the revamping of Greece. And I say all of them, because they are a management conglomerate of the problem, "Greece". They are all one entity doing a really bad job and simply blaming each other. Maybe if they all lead by example as a whole and stopped with all the non papers, statements with out names given and finger pointing, Greek Citizens themselves would stop the finger pointing as well? Um, lead by example? Even Schuable, who i respect and detest simultaneously, should seriously think about how bad he looks having a failed Greek program on his resume.

      As for the scandals for example, do you believe the non extradition of Christoforacos to Greece is in the Greeks hands or the German Siemens Hands?

      Why can't Siemens do as Duestch bank did and apologize for there bad behavior. Make the necessary proceedings with this historical foul play, which helped Greece over spend, give kick backs all while helping the brainwash game of the Greeks keep going? This is honorable. This is noble. Regardless of the foul play. This would be respected.

      All that said and done, i try my best to survive in a hostile environment while trying to help in as many ways i can. I must be hopeful not for me but for my children and the future of our nation. We have been through worse so i am hopeful that we will 1st overcome our bad selves and then our foes.

      Good Day To You,

      Sincerely,
      V

      Delete
    2. V is a very blind man. Ignorant and blind.

      Delete
    3. How easy is it for you to judge, without elaboration and hide behind your anominity.

      Indeed i am ignorant and was born blind. Being so allows me to have the yearning strength to search and learn as best i can with an open mind.

      That which i know i am is honest and certainly not a hypocrit, or try hard not to be. This is the righteous pathway and will pave prosperity for my future, whether be in poverty or in wealth. I am sure you can correlate to what that means, because your pouring out with wisdom.

      Good luck for you.

      Sincerely
      V

      Delete
  2. All the Greek Analyst is nailing is his own coffin. It is idiots like him who have no clue about economics that they think they are entitled to their malinformed opinions.

    The IMF is clear: Greek debt needs a generous haircut right here and now. If not the Greece should leave the eurozone and declare 100% of debt unpayable and up Schauble arse. Is this clear?

    ReplyDelete
    Replies
    1. Good try Cowboy!

      Declaring the debt "unpayable" will keep the country in suspended animation, legal limbo for decades. Our debt is controlled by:
      1/ English Law (the publicly traded Bonds) or
      2/ Bilateral Treaties with the EU countries (the EMS loans), or
      3/ are with supranational institutions, such as IMF, EBRD, etc.

      1/ and 2/ could be restructured, but not declared "unpayable". 3/ cannot be even restructured.

      So watch what you wish for.

      KK

      Delete
    2. No sovereign debt has ever been repaid. It only gets recycled and extended.

      Greece is a rare case where the entire debt is unpayable and non-recyclable. So in Greece's case, English law or not, you can kiss the debt goodbye. It's a joke to insist on something that will never happen.

      Delete
  3. The Greek crisis needs to be owned by the germans since they caused it to begin with. It is they (the germans) who loaned money so that members of the eurozone could buy german exports. So if you are a lender and loan money in a scheme for someone else to buy your products then you would be a fool to expect that such money will ever be returned. This money is gone, germany must face up to this undisputed fact and erase the Greek debt which is not payable under any circumstances. Pretending to engineer solutions based on NPV is not going to fly.

    And here is some news for Schauble: the eurozone only exists by name since in reality it has ceased to exist. German trade will diminsh in 2017 and soon germany would be in severe crisis which will make the Greek crisis look like a child's toy.

    Time for germans and their followers to own up to the fact of the impending cataclysm which will earse their country from the face of this earth and render it irrelevant and poor.

    ReplyDelete
    Replies
    1. @ Anonymous at 2:01 PM
      Quote: "So if you are a lender and loan money in a scheme for someone else to buy your products then you would be a fool to expect that such money will ever be returned."

      LOL is this how business is done in Greece? No wonder that this country is in such a mess.
      Urs

      Delete
    2. What is more laughable is that whatever mess Greece is in you have no skills whatsoever in fixing it.

      Now go eat one of your Toblerone chocolate bars and wait to be called for your non-opinions.

      We have thousands like you in the euro toilet. Enough, I say.

      Delete
    3. @Urs: as usual, you do not read or think accurately. What Anonymous was referring to is the Ponzi scheme whereby an exporting country lends money to a badly managed poor country in order to sell its exported goods. And also rip the country off when it gets into unsustainable debt -- by trying to seize its assets and starve its population to death.

      This is not notmal commercial practice as you are trying to suggest: this is actually economic sabotage by a state, akin to economic warfare. The fact that the Greek political elite was corrupt and foolish enough to be bought off by the Germans in the first place is analogous to a warring country bribing traitors of a foreign power, prior to military invasion. Your ridiculous claim that this is part of capitalism indicates your inept grasp of classical economics.

      Delete
    4. Some confusing comments are being made here.

      1) When a producer lends money to a buyer so that the buyer can buy the producer's products, it's called a "buyers' credit". Look up Wikipedia for details. Nothing to do with a Ponzi scheme.

      2) In cases like Greece, it's not the producer lending to the buyer (except for large projects typically of a military nature). There is not one producer. There are thousands and thousand of producers in foreign countries and there are hundreds and hundreds of banks in foreign countries each making their individual decisions on their respective merits. In Greece, for example, the largest portion of the debt was lent by banks domiciled in France.

      3) Anonymous at 1.26 now claims that Greece was a badly managed poor country in the 2000s. Such an attack of self-recognition about having been poorly managed I see for the first time. The point about Greece's being poor in the 2000s is far from reality. The private wealth that was accumulated by a large part of Greek society (much of which sent offshore) was absolutely incredible.

      Delete
    5. Klaus: it may be called a buyer's credit in your jargon: in this case it was a Ponzi scheme. There is no confusion here, other than your denial of the intentions of the Germans.

      I do not care how many producers there are : the benefits went to Germany. Stop trying to confuse with details that cloud the overall reality.

      And I have never said in publications or in public that Greece was anything other than poorly managed and a weak economy in the 2000s. It was the germans and others who claimed that Greece was ready to enter the eurozone, and bribed the Greek politicians and bankers to agree. You can stop trying to blame Greece for the malicious intent of German politicians and their connivance with bankers.

      Delete
    6. And as an aside: the wealth collected by a small part of the Greek population was the wealth accummulated through corruption that was actively promoted by Germany, France and the rest of the EU. Everyone in Europe knew that Greek politicians were as dirty as anywhere you could compare with, but as long as the money was flowing the EU was very happy to engage with this corruption. Suddenly, after 2009 all of northern Europe claimed to be whiter than white, and it was all the fault of the dirty Greeks. NOT SO. You are promoting propaganda from the depths of power and money, and show no compassion for the common greek people.

      Delete
    7. @ Kleingut 11/02 9:08am

      Yes, at the start of the crisis, French banks were the biggest foreign holders of GGBs (less than Greek banks but more than German banks).
      But whenever I hear that French&German banks forced debt onto poor Greece I think of this chart:
      http://www.pdma.gr/en/debt-instruments-greek-government-bonds/allocation-2005-2010

      Unsurprisingly, the biggest financial center in EU was also not shy at introducing Greek debt to their customers: UK(/Ireland) took 23% of GGBs on the primary market allocated in 2005-2010, more than France + Germany

      Delete
  4. Simple explanation:
    The crisis is back in the _headlines_

    H.Trickler

    ReplyDelete
  5. You nailed it too but when you say once debt is forgiven Greece will start borrowing heavily you are wrong. No one will want to lend us money especially for consumption or to pay the salaries of retirees and public sector employees.

    ReplyDelete
    Replies
    1. Only the IMF hasn't nailed it. They will say anything to avoid to do what they have signed. Jerry Rice said it yesterday quite clear, that they have withheld debt relief twice. It is entertaining to say the least, the lenghts to which honorable creditors would go, to avoid the "pacta sunt servanda". It also illustrates why the Greeks need some other goverment that will respect their will for a change.

      Delete
    2. And what other government that would be? Nea Tromokratia which is nothing more than Troika of the Interior?

      Delete
  6. The German government’s efforts to crush Greece and force it to abandon the single currency have destabilized the monetary union. As long as German Chancellor Angela Merkel’s administration continues to abuse its dominant position as creditor-in-chief to advance its narrow interests, the eurozone cannot thrive – and may not survive.
    Germany’s immense current-account surplus – the excess savings generated by suppressing wages to subsidize exports – has been both a cause of the eurozone crisis and an obstacle to resolving it. Before the crisis, it fueled German banks’ bad lending to southern Europe and Ireland. Now that Germany’s annual surplus – which has grown to €233 billion ($255 billion), approaching 8% of GDP – is no longer being recycled in southern Europe, the country’s depressed domestic demand is exporting deflation, deepening the eurozone’s debt woes.
    Germany’s external surplus clearly falls afoul of eurozone rules on dangerous imbalances. But, by leaning on the European Commission, Merkel’s government has obtained a free pass. This makes a mockery of its claim to champion the eurozone as a rules-based club. In fact, Germany breaks rules with impunity, changes them to suit its needs, or even invents them at will.

    ReplyDelete
  7. Dear future potential lenders to Greece.
    I enclose an anonymous contribution (Feb 9, at 2:01 PM)to a popular blog on Greece (Observing Greece)for your information. The opinions expressed are not unanimous in the population but they are shared by the majority. Another majority opinion is that they are not responsible for loans taken out by previously democratic elected governments.
    Lennard

    ReplyDelete
  8. Funny you should say so, all my Greek friends also agree with it, provided Greece is forgiven all her debt. In the language of politicians it sound something like "I take full responsibility for my actions and omissions, I will even say Mea Culpa, provided it has no consequences for me".
    And then we start the boom-bust cycle, you so aptly describe,again. Nobody has yet said what Greece is going to live from in the future, how they are going to, productively, employ the population, what they are going to produce. I am afraid the last boom was so long that Greece has forgotten (verlernt ist besser) another of your dogmas, that you cannot continuously consume more than you produce.
    Lennard

    ReplyDelete
    Replies
    1. Lennard,

      You state some truths but remember how this started.

      An irresponsible lender loaned to an irresponsible debtor. This with no back checks and no credit history. There was no such thing as credit grading till now. Let me ask you, we had to run full speed into the wall before such systems, stress test etc. were implemented? I am not mentioning the foul play of our government giving money away to their cronies voters but the general public. Banks overly financing us, through loans from foreign banks to ours. Did it make any sense? Absolutely not.

      The blame is on both and should viewed as such. Now as we are in the position we are in and this is a different matter and different form of negotiation.

      Sincerely,
      V

      Delete
  9. @ kleingut
    Has the bitch ever left the room? I don’t know. But I have a strong feeling what we will be witnessing further down the year:
    - Schäuble will kick the Greek Gvmt in the a.. (as usual)
    - The Greek Gvmt be stubbornly reject further reforms (as usual)
    - In July we will have a nail-biting showdown (as usual)
    - Chaos in Greece (as usual)
    - The Greek Gvmt will back down (as usual) and in return will get the money they need (as usual) and then do nothing (as usual).
    Urs

    ReplyDelete
    Replies
    1. Hi Urs,

      I doubt it will go that long. Our government will cave by Easter and sign off on everything.

      The problem is, is that measures that will be implemented. Your tax euros, to bail us for a program that only strangles us (all kinds of taxes) and doesn't fix (revamp of our public works, investments etc.) us will lead to this continuous cycle.

      Sincerely,
      V

      Delete
    2. It's not about Greece any longer you superfluous moron.

      It's about the IMF and the euro idiots and the euro idiots lose.

      Get it?

      Delete
  10. @ Urs.
    Short, sweet and to the point.

    ReplyDelete
  11. The bitch is not back because this time the lenders have little leverage to speak of.

    If we all agree that Greece has about 5 Billion of surplus and also access to its domestic bank market where Greek banks could easily raise another 2-3 Bil, euros in short term paper, this means that Greece can easily cover the 7 Bil. bill due in the summer 2017.

    The bitch is entirely on the shoulders of Schauble and his disgusting collaborators who will be exposed this time as lacking leverage and substance. If Schauble and his party think that they could be relected as tortures-in-chief of Greece then I have news for you that this time the entire leverage is w/ Greece.

    ReplyDelete
  12. Whatever is back it's mainly because German elections are coming and Grexit touches all those sensibilities so particular and cherished by German (although not exclusively) conservatism -nationalism.

    All the rest nebulous talk of "Greece will be in crisis for the simple reason that one only changes behavior if one realizes that one has done wrong" of the the-crisis- is- inside- us variety is political talk serving as after sales service of a program so unrealistic, irresponsible and disingenuously conceived that even its proponents admit it loud and clear only for their co-proponents to 'fess up that it is what it is but it will have to do until their proper affairs have been taken care of and then kick the can down the road and then, please, don't pester us with this tired old story and "Greece will be in crisis for the simple reason that one only changes behavior if one realizes that one has done wrong".

    See, Klaus, it simply isn't true that "one only changes behavior if one realizes that one has done wrong" because not everyone cares or has to own up to it and much more suffer the consequences.

    PS. Don't worry Tsipras will sign everything and then when things get worse he maz even parrot that "Greece will be in crisis for the simple reason that one only changes behavior if one realizes that one has done wrong", as our politicians have done repeatedly in the past.

    Lykinos

    ReplyDelete
    Replies
    1. Those who want to chase Greece out of the euro zone today will end up on the trash heap of history.

      Delete
  13. Greece's woes actually started in the 70's, when the oil crisis and the collapse of Bretton Woods led to high interest rates internationally. That's when the first wave of Greek deindustrialization occurred. The governments's response? Nationalizing the failing private companies. The trend was amplified in the 80's, when PASOK's policies led to stagflation, lax labor laws etc. The one industry that was salvaged was that of construction materials, whose chains supplied the real-estate boom that started in the 90's and peaked in the 00's, before it's monumental collapse that still plagues the Greek economy.

    ReplyDelete
    Replies
    1. This is mostly correct (with a few caveats) but the turning point is when such a country enters into a monetary union with a highly industralised exporting economy functioning as the pillar of that union. Moreover, if that union has no explicit capital transfer guarantee, and its central bank is not lender of last resort, then the outcome is more or less guaranteed to be what it is now. This is standard monetary union theory -- which means that there is no way the Germans were not told this in advance. They are just lying their guts out, because they are concerned only with Germany and its power within the eurozone.

      Delete
    2. When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.
      …after the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece… Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.

      Delete
    3. @Anonymous at 1:31 AM
      Quote: "This is standard monetary union theory -- which means that there is no way the Germans were not told this in advance. They are just lying their guts out, because they are concerned only with Germany and its power within the eurozone."

      Of course they are. That’s their bloody job, as they (german politicians that is) were voted into office not by the Greeks or Lithuanians but by their german electorate. Don’t tell me that Tsipras cares for Dutch or Czech critics of his policy. According to David March ("no other Brit knows more about the Euro") the germans never wanted the Euro (for very good reasons) but were forced by Mitterand into this debacle. And don’t tell me that the Greeks were not told about the shortcommings of the EZ too. So they are lying their guts out as well.
      Urs

      Delete
    4. Urs:

      What the hell are you talking about?

      Are you suggesting that the Greek people knew of the flawed euro architecture? How could they have possibly known such?

      The ill-engineered euro was only an instrument for good times in the EU. Once the first serious economic challenge arose the stupid currency was exposed and only trade junkie germany and her satellites derived a benefit from its use.

      If you think that the stupid euro is a good currency why then don't you start selling your pathetic cukoo clocks in euros in your depressing airport in Zurich?

      Delete
    5. Yes, the Euro was a currency for good times and who should know that better than Greece: 300 BEUR net inflow of foreign debt into Greece from 2001-10! That's a lot of money to be spent and to provide for good times!

      Delete
    6. Klaus:

      You are twisteing the facts again.

      Wasn't the 150 Billion euro PSI from Greek banks and social security funds?

      That the euro idiots replaced the haircut with their own debt so the debt of Greece is precisely at the same level as when we started, it is simply a mark of idiocy by the lenders.

      That's why this debt will never be repaid. Whatever skin in the game Greek institutions had has been replaced by your new debt. Therefore, Greece is indifferent to such new debt and never cares to repay it.

      If you think that Greece will begin to replace your already written off debt with market rollovers then I think you need to see urgently a doctor.

      Delete
    7. @Urs: apparently, you are as clueless about the European Union as you are about economics. The EU is a supranational structure which has chosen to invent the euro as its own currency. Nobody appointed Germany to run the EU: they appointed themselves in the aftermath of the banking crisis.

      Basically, you have just admitted that the Germans are deliberately fucking up Greece, because they German politicians choose to do so. That sounds little different from the Third Reich to me, and the rest of the world. So quit all your Germanophilic comments here, please: you need to deal with reality, instead of blaming Greeks for the mess that Germany has made (again) in Europe.

      Delete
    8. "...and who should know that better "
      The Germans.

      Delete
    9. @ Anonymous 12:33 AM
      Whatever your name is it is you who is absolutely clueless when it comes to economics in general and the history of the Euro in particular.
      Of the 28 EU member states only 19 have by now the Euro as their national currency and of the remaining 9 the UK and Denmark are de-jure free to choose as Sweden is de-facto. Greece never fullfilled the convergence criteria to join the Eurozone. It would have been very easy for Greece not to join - they just had to avoid to cook the books.
      Regarding the history of the Euro I point to:
      David Marsh The Euro: The Battle for the New Global Currency. You may extend your horizon and familiarize yourself with the persons and events that pushed the Euro from a pipedream to a reality.
      Nobody appointed Germany to run the EU - exactly. And nobody (including Germany) could appoint someone to run the EU. Don’t you remember: 18 countries called Tsipras bluff and showed him the door when he tried to blackmail the EZ. 18 that means all of them except Greece.

      Basically you are showing that you (as many but not all of your compatriots) chose to do what unfortunately so often led to misery in Greece: carrying on as usual, wait for help from somewhere else and blame others for your own mess.
      Urs

      Delete
    10. @ Anonymous at 5:11 PM
      Quote: "What the hell are you talking about?
      Are you suggesting that the Greek people knew of the flawed euro architecture? How could they have possibly known such?

      I am talking about the book cooking Greece government at the time when Greece tried desperately to join the EZ. Are you suggesting that Greeks are inherently more stupid when it comes to monetary policy than Germans?

      Quote: "If you think that the stupid euro is a good currency why then don't you start selling your pathetic cukoo clocks in euros in your depressing airport in Zurich?"

      Kloten is a very fine airport just a bit pricey as almost everything in Switzerland. But if you don’t like it just stay away. I guess nobody will miss you here.
      Oh and btw. there are no swiss cukoo clocks - in Switzerland we produce and sell overpriced mechanical wonders aka wristwatches.
      Urs

      Delete
    11. @Anonymous, Feb11, 10.51
      You are accusing me of twisting facts by making reference to a 150 BEUR PSI from Greek banks and social security funds. Ok, how can I respond to this one without embarrassing you? Let's see.

      I specifically talked about the period 2001-10. The PSI was 2012. I fail to see the connection.

      And if you research the PSI of 2012 a bit, you will find out that it caused write-downs totalling 100 BEUR of which 60 BEUR were held by foreign institutions and 40 BEUR by Greek institutions. Your 150 BEUR is out of the air.

      Delete
    12. @Urs: your arrogance and ignorance are only what we expect from corrupt bankers. You know nothing about the politics of the eurozone, yet think you do. You do not even know the content of the EU treaties - which state baldly "the currency of the EU is the euro", and affirming that all member states will strive to join it.

      The fact is that Germany engaged in abusive practices from the outset, pressuring weak economies to join the euro and turning a blind eye to all the failure to satisfy the convergence criteria. France and Germany also failed to satisfy the criteria, and chose to informally rewrite the rules to suit their political agenda.

      You see, the post-truth world is full of people like you -- not interested in facts or serious analysis. You are just posting pro-German and anti-Greek propaganda -- for reasons known best to yourself. Doubtless, you consider it to be in your own personal interests to do so. That does not mean we have even to be polite when dealing with your lies.

      Delete
    13. Klaus:

      I don't think you get it. So, let's start from the basics.

      The majority of sovereign debt is held and issued by the banks of the sovereign country. Most public debt of France is held and issued by French banks and so on.

      So when this incredible idiot Schauble gives a haicut to the Greek banks which held the majority of Greek debt he commits an act of uber stupidity. Because we get from a point that Greek institutions (such us banks and social security funds) had skin in the game (therefore leverage in the local society for change) and replaces exactly what he took out of the system with even more money owned now by the EU apparatus.

      If this not an act of stupidity, I don't know what is. At such stupid intersection there is no reason for Greece to own the problem since the entire rotten problem is now owned by the EU.

      One has to be a non-tactician and a strategic amateur not to realize that Greece post 2012 has had an once in a lifetime opportunity to punt on this pseudo-debt because none of it makes any sense for Greece to own plus it's now stupidly (non-strategically) held by others.

      So what ownership of the Greek problem by Greeks are you talking about?

      The entire problem aka a mountain of debt is held by the eU now and greece needs to find better leadership (which I seriously doubt because of the very low quality politicians we have) to declare the obvious: the emperor has no clothes and Greece's strategic advantage is away from the eurozone. I don't agree with everything LePen says but I certainly agree when she says that the euro is not a currency but a political weapon. A weapon used to strip sovereignty from those countries unfortunate enough to belong to the meaningless euro club.

      Delete
    14. Urs:

      I don't know if the rest of the Swiss people living in your cantons are entertaining and thick headed like you.

      Wristwatches?

      You mean like Swatch which needed to be rescued by a Lebanese, Nickolas Hayek, because apparently you Swiss know how prevented form saving your own company?

      Let me give you a bit of news Mr. inhabitant of the marshes surrounding Zurick lake.

      Sophisticated people no longer carry the monstrosities you call Swiss wristwatches. What I have in my wrist - and very happy about it - is a device which keeps track of my daily 20000 steps target, tells me the mileage covered, tells me the calories spent, tells me my heart vitals and all sorts of other information which is actually of use rather than carrying around a pretentious piece of clothing which only euro playboys wear to impress their next female victim.

      Delete
    15. @ 6.29 pm
      I wish you wouldn't always shoot from the hip as though someone had attacked you and you needed to defend yourself because that would make it easier for you to see that oftentimes perhaps people are agreeing with you.

      I AGREE WITH YOU that the 2012 PSI wasn't the smartest decision in the history of sovereign finance! Most likely: our European political elite felt it was necessary to show the voters that they forced losses on the private sector. In actual fact, it was a bit of a self-goal for EVERYBODY involved.

      By the way, the days when sovereign debt was placed exclusively domestically and was thereby constrained by the the size of domestic capital markets are long gone. Of Greece's debt at the outset of the crisis of about 300 BEUR, just about 90 BEUR was held domestically in Greece.

      What "Greek ownership" of the problem am I talking about? Well, the first step would be to state that of all the problems Greece faces, its sovereign debt is by far not the greatest one. The second step would be to state that of all the problems Greece faces, the vast majority is homegrown since 1981. And the final step would be to accept the fact that when one is at the very bottom of Europe in terms of attractiveness for doing business (Doing Business Report) and at the peak of perceived corruption (Transparency International), one has the job pretty much carved out for oneself.

      And then one goes from there. All the energies which are currently devoted to playing and reinforcing the victim's role can then be applied towards turning the country around, into an attractive place to do business for everybody, Greeks as well as foreigners.

      Delete
    16. Klaus:

      You don't need a masters in finance to know that in an austerity environment no investments can be made for the simple reason that the investment will wait until the deflation cycle is over for maximum impact. If you live in an environment like Greece where the currency due to austerity is more valuable the next day (in other words the same currency buys more in the future) then no one will proceed to invest or start a new business until deflation is over. It's the opposite of inflation where buying today makes more sense than buying tomorrow due to higher future prices.

      If you think there was such an obvious thing that Greece would undertake to improve its situation don't you suppose that by now the Greeks would have figured it out and applied it already?

      Who cares about competitiveness in Greece and what for? We are not a supply chain country. In the two industries that move our economy merchant marine fleet and tourism we are plenty competitive.

      What is this talk about improving? Improving for your benefit or our benefit?

      Delete
    17. @Anonymous at 6:49 PM
      Quote: "You mean like Swatch which needed to be rescued by a Lebanese, Nickolas Hayek"

      His name was Nicolas Hayek (Nick is the name of his son) and Mr. Hayek was a libnese born swiss right winger who btw. made some remarks about Greece and Greeks I don’t dare to repeat here.

      "Sophisticated people no longer carry the monstrosities you call Swiss wristwatches."

      Well, sophisticated people abstain from making such generalizing statements. The usual buyers of this status symbols are people from the finance industry, Chinese businessmen, collectors and investors. I guess a euro playboy uses other means to impress his female victims.
      Urs

      Delete
    18. @Anonymous at 5:58 PM
      Quote: "You do not even know the content of the EU treaties - which state baldly "the currency of the EU is the euro", and affirming that all member states will strive to join it."

      I gave you all the facts about the Euro membership and it is obvious that you are not able to refute even one of them. How on earth can you expect to be taken seriously? Read one of the books on the Euro the former financial times journalist David March wrote and then come back.
      Urs

      Delete
    19. @ Urs,

      Just ignore him.

      Sincerely,
      V

      Delete
    20. Urs:

      I forgot for a secod that you know in depth the craft of a europlayboy.

      Btw, Greece carries a significant trade surplus with Lebanon which means that Greek products and Greece are very popular in that part of the Middle East.

      It is also worth noting that Hayek's brother had expresed personally to me great willingness to finance real estate projects in Greece. In fact the Hayek provided capital was 2.5% which is not bad, but Hayek's other terms were not attractive to me.=

      Delete
    21. @Urs; your arrogance and ignorance are truly Germanic. I do not need to read any more than I already know about the origins of the eurozone, as I lived through the events on the margins of academic and political actions.

      There is nothing to refute in your superficial and trite remarks. They are simply a misreading of the situation, because you are a semi-educated banker who thinks he's really smart because he knows how to read.

      Some of us here actually write the books that morons like you read. Of course, we don't expect you to grasp much -- given your arrogance and tunnel vision. Keep on posting your complacent and foolish comments, and those who actually know what has been happening will keep on laughing at you.

      Delete
  14. Klaus:

    You claim that the problem in Greece started in 1981. So what are the logical choices today?

    Obviously we can not reward neither ND nor PASOK for the total failure they produced. Potami is a very weak something, the communist party of Greece a relic of past times and Golden Dawn are basically junta sympathizers and monarchy idiots.

    This leaves only Tsipras with clean hands to do the job. Granted he is inexperienced and makes rookie mistakes but what do you expect; he and his party have no prior governance experience.

    So the only way for the Greeks to own the problem is to never allow ND and Pasok to regroup and return to power.

    What else do you want us to do? Greek politicians are neither known for their intelligence nor their skills. They just like to talk and are deficient in actually doing what needs to be done.

    Didn't Berlin know all of this when they put their miserable play in action?

    Of course they did. So this is what you get. There is nothing more to give by the Greeks or Greece. That's it. If you don't like it then tough luck because there are not any other political forces found in Greece to do otherwise.

    ReplyDelete
  15. For those not understanding the Greek character this is a list of the 10 attributes from antiquity to today exhibited by the Greeks as compiled by Pr. Edith Hall of King's College.

    The qualities she assigns are:

    1. seagoing
    2. suspicious of authority
    3. individualistic
    4. inquiring
    5. open to new ideas
    6. witty
    7. competitive
    8. admiring excellence in talented people
    9. elaborately articulate
    10. addicted to pleasure

    Even a cursory review of the above shows you why the Troika program is doomed for failure and it's about time that Berlin gets the news of its eventual defeat.

    ReplyDelete
  16. With these 10 qualities it is no wonder that Greece prosper and her citizens are happy. Only the quality honesty could add to the prosperity and happiness.

    ReplyDelete
    Replies
    1. We agree then that the dishonest eurozone is a poor fit for Greece. The euro will not exist by the end of this year and all we hear are kies from Brussels.

      Delete
  17. To the gent who predict the demise of the EZ this year.
    I think you are preaching to the choir when you say that Greece does not fit in the EZ, most Greeks, and other readers of this blog, agree with you. I hope that your prediction of the EZ's demise this year is wrong, it would be a tragedy for Greece. Isolated countries from the EZ would not support Greece with money, the only country to do so would be Germany. German economic support would only amplify the latent impotence and hate in Greece. While Klaus is right when he says that external common potential enemies (USA v, Europe) create unity, it is an unhealthy one, hiding internal differences.
    Lennard

    ReplyDelete
    Replies
    1. Lennard:

      1. The euro will impode soon of not this year then the next. The actual timing does not matter.

      2. Germany has never supported Greece. Not even a penny.

      Delete
    2. Lennard:

      All you have to do is listen to Heiner Flassbeck to understand why the eurozone is doomed:

      https://www.youtube.com/watch?v=sJnSzhJHfUE

      Delete
  18. I don't need Heiner Flassbeck to tell me the Eurozone, in its present form, is doomed. I don't think a major restructuring of it will take place in 2017, but we shall see when. Heiner Flassbeck is a well meaning man, but an economist, his reasons are therefore complex economic ones. Had he been a philatelist he would have found his reasons in the type and ways that stamps are designed and issued in the various countries.
    May I offer a more simple reason? Our values and cultures, formed by our history, upbringing and personal experiences, are different.
    Lennard

    ReplyDelete
    Replies
    1. Greece has a fiduciary duty to its citizens and to the world to do whatever it can towards a painful eurozone demise. This is not because our cultures are different (since your culture has a foundation on our culture) but because as people we dislike idiocy and lies which is precisely what this unholy construct called the eurozone is. Marine Le Pen most likely will deliver the death blow to the german occupation of Europe and we will be here to applaud it. Patriots are the same everywhere. They like and support their country and dislike its enemies. Germany is a clear enemy of Greece and will be dealt with accordingly.

      Delete
    2. If Greeks dislike idiocy and lies so much, why have they elected the politicians they have elected in recent decades?

      Delete
    3. Klaus:

      There is a very simple answer to your question. Clearly to irritate the Germans.

      Delete
  19. Because voters vote for politicians who have their opinions and intellect.

    ReplyDelete
    Replies
    1. So according to you all Greeks are stupid and incompetent then. That's racism squared.

      Delete
    2. At Anonymous on February 18, 2017 at 4:26 AM

      Careful now... Don`t go offending our German friends...

      Delete
  20. Despite the dramatic heading of this blog entry the author fails to answer some key questions (and we have to assume his avoidance has to do with the damaging nature of the obvious answers to such questions).

    1. We now know that the euro was not designed for crises of any kind, let alone a crisis festering for almost a decade (since 2008). So what would be the purpose of Greece to facilitate the euro currency in any way knowing that the euro is a totally ineffective tool?

    2. The eurozone is already in fragmentation mode and the only question that remains is how fast such fragmentation will occur. If either Italy or France put a referendum forward for leaving the euro then the currency will experience an immediate meltdown. So why is it beneficial for Greece to accept guidance from a group that is already failing and in severe (and by all accounts non-reversible) decline?

    3. This is not the first attempt of turning Greece into a country of german administration. Following the liberation of Greece in the 1830s the Powers (Britain, France, Russia) appointed Otto of Bavaria (thought to be a disinterested third party) proved to be an unmitigated disaster for both the Greeks and Otto himself who died in exile and disgrace. It was during the Otto period that the Greeks learned clientellism with the court since Otto's administrators were unable to connect with the governed so that powerful Greek factions decided to have a permanent presence close to the court and thus the period of the state treating citizens like clients officially began. So why would the Greeks now ignore the lessons of history and accept administration by Berlin through puppet Greek goverments which are both powerless and totally ineffective? Didn't Einstein say that a sure sign of madness is to keep using the same approach expecting different results? So give me a good reason why Greece should not revolt against the tyranny of Berlin. Are Greeks naturally the obedient type? Are Greeks naturally of low IQ so that they could obey authority? Which part of Greeks being uber suspicious of authority don't you understand?

    ReplyDelete
    Replies
    1. @Anonymous on February 18, 2017 at 1:50 PM
      Quotes: "So what would be the purpose...?" "So why is it beneficial...?" "Which part of...?"

      The very short answer is: Because you have no choice. You are broke and you are in dire need of the money from the ECB. Nobody else will finance you at such a low interest rate. Remember what your banks did the last time Alexis told you you are free to choose?
      Urs

      Delete
    2. urs

      Why do we need money that will never be repaid? Don't you think that this theater of compliance is more for your benefit and totally against our best interests?

      Why follow the wishes of a losing group which is under disintegration such as the eurozone? Do you know people eager to cooperate with losers with clay feet?

      Delete
    3. Urs:

      When we are talking about money that go from one of Troika's pocket to the other, even the most unsophisticated observer realizes that such has nothing to do with benefit to Greece rather a benefit to Troika.

      So you thesis that Greece will capitulate because Troika needs the money fails the test of reason.

      Delete
    4. Anonymous at 12:21 PM
      Quote: "Why do we need money that will never be repaid?"
      Actually the question is: Why should others lend you money that will never be repaid.

      Quote:"Don't you think that this theater of compliance is more for your benefit and totally against our best interests?"
      I as a Swiss have no dog in this fight but no I don’t think that it is against the best interests of the Greek.
      Quote:"Why follow the wishes of a losing group which is under disintegration such as the eurozone?"
      Because they are funding you only if you follow their wishes. And there is no one else who is willing to fund you. Easy.
      Urs
      Urs

      Delete
    5. @ Anonymous at 2:08 PM:
      Quote: "When we are talking about money that go from one of Troika's pocket to the other, even the most unsophisticated observer realizes that such has nothing to do with benefit to Greece rather a benefit to Troika."

      Well, only the most unsophisticated observer realizes that. There is some money going to Greece but far more important is that Greece does not have to officially default on it’s sovereign debt. When they do that the ECB is not allowed to buy any debt from Greece or its banks. This would lead to the rapid financial melltdown of Greece. Come on, you know that quite well, don’t you?

      Quote: "So you thesis that Greece will capitulate because Troika needs the money fails the test of reason."

      Apart from the fact that this nonsense that you made up was never my thesis, you are right.
      Urs

      Delete
    6. Urs:

      As a Swiss with "no dog in the fight" you certainly have some persistent misconceptions about the fight that you - apparently - are not part of.

      1. The lenders are not saving Greece, they are trying to save the euro which by the way is doomed as a currency.

      2. Financial terrorism against Greece does not constitute a logical argument for compliance. If so, black mailing would be no crime and it would be perfectly legal to threaten people with illegal activities.

      3. To paint as nonsense terms and constructs which obviously you don't understand (because maybe you are a Swiss who lost his dog somewhere in Zurich lake due to intellectual fog) shows lack of depth on your part.

      Delete
    7. Anonymous at 1:28 PM:

      1 It is of no importance why the lenders do not drop Greece and let her go bancrupt as long as they are willing to finance her with a currency the majority of Greeks are eager to keep.
      2. Nobody blackmails Greece. Greece is free to chose: Complience or Grexit and default. Following your reasoning a Grexit is rather beneficial for Greece so accusation is pure nonsense.
      3. Your childish ad personams are rediculous and telling at the same time.

      Urs

      Delete
    8. So in your learned opinion every time Greece is deprived of liquidity unless it obeys is not blackmailing.

      May I ask politely wthat precisely you people are smoking in the Land of Urs?

      Delete
    9. @Anonymous at 11:52 PM

      Quote:"So in your learned opinion every time Greece is deprived of liquidity unless it obeys is not blackmailing."

      Deprived of liquidity? What on earth are you talking about and how dare you to undermine your very own myth of a beneficial Grexit? Don’t you know that you are held hostage by this miserable Eurozone? Leave it and you are free to print as many New Drachmas as you like. Or in the words of your namesake:
      "The prosand cons of Grexit are well known and as follows:

      Pros 99.999%
      Cons 00.001%"

      He’s a Genius, isn’t he? You have so much to learn from him.
      Urs

      Delete
    10. Urs:

      It seems that you are not aware of the undisputed fact that the ECB (Draghi) turned off liquidity to the Greek banking system in the summer of 2015 until Greece accepted the imposed terms.

      This is surely blackmailing.

      Delete
    11. @Anonymous at 1.00 PM
      I think you are reading too much Varoufakis. Draghi - or rather the ECB - had no other choice but do that unless they wanted to violate their statutes and rules. One of the reasons most governments don't behave as madly as the Greek government did then is that they don' t want to trigger a situation where a Central Bank has no choice but to turn off liquidity.

      Delete
    12. Put differently: most governments know that actions have consequences and they think their actions through before they get hit with the consequences.

      Delete
    13. Klaus:

      I have no idea what you are talking about.

      Did the ECB imposed ELA on Greek banks and refused to provide liquidity yes or no?

      What does Varoufakis has anything to do with this. I was there and I experienced it.

      Delete
    14. What you experienced, whether you were there or not, was what happens when the ECB provides ELA under certain rules and/or conditions and then stops providing it when the rules and/or conditions are no longer complied with. What is so difficult about understanding that? Under any lending arrangement you have certain conditions. When those conditions are no longer fulfilled, the commitment to lend ceases. Only that in the case of the ECB it was not conditions under a lending agreement but, instead, rules and statutes of the ECB. That adds a different flavor to it. Do you think the Fed would act any differently?

      Delete
    15. The FED is not an instrument for political manipulation.

      And please stop referring to yourselves as "lenders". You are not lenders. You are desperate people trying to save your wortless currency by pretending to provide funds which will never be repaid because it's much cheaper for you to do so rather than having the false currency evaporate into thin air.

      Delete
  21. @ Anon. Feb 17, 1417 hours.
    Our cultures may share a certain common base, that does not mean they have developed to the same degree, and in the same direction.
    Your proposed policy of "rather your donkey die than mine thrive" is a negative sum game. Inevitably the weakest party is going to lose the most, or all.
    Lennard

    ReplyDelete
    Replies
    1. It's perhaps my false impression but are you putting forward the pathetic argument that your culture is more advanced than the Greek culture?

      You would be laughed out of civilization with such obviously false statements indicative of a deep inferiority complex. All such statements designate is that you do not know thyself which by the way requires an immediate Greek education.

      Delete
  22. This speaks of the German hypocrisy. Five years ago Spiegel was saying that it's time to declare defeat and let Greece exit the eurozone. So after 5 additional yeras of failure how could Berlin noedeny the obvious which is that Greece must be alowed to leave and stick the incompetent EU with a 100% unpaid debt bill?

    http://www.spiegel.de/international/europe/why-greece-needs-to-leave-the-euro-zone-a-832968-3.html

    ReplyDelete
  23. No, not all Greeks are stupid and incompetent. Greek voters have, in the time Greece was a democracy, elected their politicians, based on who they thought would serve their interests best. That does not make them innocent bystanders. Lincoln comes to my mind "You can fool all of the people some of the time, and some of the people all the time, but you cannot fool all the people all the time". So, for once, live up to your responsibilities, don't blame it on the politicians, the oligarchs or external forces.
    Lennard

    ReplyDelete
    Replies
    1. Lennard:

      If you have taken a little bit of your precious time to read the list of 10 Greek traits from antiquity to today, you would perhaps have noticed a Greek tendancy to admire and reward those with oratory and public debating skills.

      Hence the vast majority of Greek politicians perfected such skills to win the public's admiration. The fact that more than 90% of them were and continue to be of the legal profession did not/does not add to the administrative Greek talent pool in any significant way.

      A prime example of this "empty shell" type of politician is Venizelos whose rhetoric is remarkable but he completely lacks an understanding of management and finance. He is a typical constitutional lawyer and he has committed the grave PSI error because he has no clue what he was doing except in his mind "saving Greece". The "saving Greece" thing is an automatic label which when detected in Greek politicians means in plain language "I am an idiot and I don't know what I am doing".That's why we are where we are today. Because the political class in Greece sought to cultivate appearances at the expense of substance.

      Delete
    2. @ Anon. Feb. 18, 2008 hours.
      Do I understand it right that you conclude that the Greek electorate vote for idiotic politicians without substance because of their eloquence? What does that make Greek voters?
      I did take the time to look at Edith Halls 10 "commmandments" and thought no country could object to being described in that way. I also took the time to look up the author and her new book that is structured around these 10 dogmas, from the press releases it appears she ascribe them to the ancient Hellenes. The media is in conflict over her, as all her 20 books, this one is coined by the literary critics as being witty and easy to read, and by her fellow scientists as being shallow and scant on scientific fact. That she is an associate and friend of Boris Johnson and Jeffrey Archer, and an honorary doctor of the University of Athens did it, I ordered the book. I look forward to read it, as I would any book from one of her 2 associates, I would never vote for them, neither would I vouch for their integrity, but they are damned good reads.
      Meanwhile I would welcome your opinions on the book.
      Lennard.

      Delete
    3. Lennard:

      I kind of disagree with you. Boris Johnson is a brilliant and gifted politician who correctly steered the UK away from the EU mess.

      As far as your thesis that the 10 traits of E. Hall aplly to the ancients and not the modern, you are missing the whole point because the modern Greeks are nothing more than a natural progression of their ancient brethren. Despite the propaganda to the contrary, for some reasons the Greeks maintained cohesion and continuity preventing admixture with others and therefore they are genetically more than 90%+ similar to the ancients. The Greeks, the Thracians and the ancient Italians are of the same genetic branch and their disposition and upbringing has a remarkable and unbroken continuity.

      Delete
    4. I see we are now getting into the genetics of modern Greeks. That ought to become an interesting exchange, no doubt!

      Delete
    5. Klaus, I just wonder what benefit you see in this kind of comments?

      Come on and please write a new blog entry. May I suggest "pro & cons of Grexit" which seems again be discussed by CSU?

      H.Trickler

      Delete
    6. The prosand cons of Grexit are well known and as follows:

      Pros 99.999%
      Cons 00.001%

      Delete
    7. You could get a taste of Edith Hall here:

      https://www.youtube.com/watch?v=uJDz00BQV8I

      Delete
  24. @ Anon. Feb. 18, 1543 hours.
    If you are Greek, and above the age of 18 years, and, subscribe to the idea that Greece is the innocent victim, and/or, think she can threaten herself out of her current position.
    Then!
    I think you have a culture inferior to that of developed countries, and/or a mental disorder.
    Lennard

    ReplyDelete
    Replies
    1. That's not an opinion but pure terrorism.

      Delete
  25. The defense of Greek voting habits based on Edith halls 10 commandments is feeble. You cannot have it that they vote for articulate, stupid politicians and "admire excellence in talented people". It has been a good advertisement for her book, I have also, ordered it, I should like to see what she says herself, I have a feeling the 10 commandments have been promoted by her publisher.
    I have yet to hear a Greek publicly admire a talented person without the qualifying "but". That Greeks are elaborately articulate it true, unfortunately they are, with the words of Nikos Dimou, all transmitters and no receivers, so much for the (self)admiration of eloquence.

    ReplyDelete
    Replies
    1. Why did you have to mention that miserable serpant Nikos Dimou who is precisely a non-Greek with a Greek name. Being a non-Greek is not a crime but in Nikos Dimou's case due to his inferirity complex is quite unfortunate fo both him and those who read him. He is an empty shell.

      Delete
    2. That the Greeks admire talented people is beyond dispute. However less sophisticated people equte talent with appearances and not substance. And if you know anything about modern Greek politics they are basically beauty contests on appearance.

      Delete
  26. Anon. Feb 20, 1245 hours.
    What does that make Greek voters?
    What is your opinion of her book?
    I have not voiced any thesis about her 10 commandments, I may do so when I have read her book, I quoted the press and stated so.
    As for your genetic and racial crutches, I consider them irrelevant. You may be the son of Einstein, that does not make you a genius, I have very simple views on that.
    I can take pride in, and responsibility for, people I have had the possibility to influence in their upbringing and teachings, particular in their formative years.
    (Sorry Klaus, but I don't suppose you expected me to supply the entertainment on this issue),
    Lennard

    ReplyDelete
    Replies
    1. Yes, but we have DNA science which proves the genetic continuity of the Greeks. So this part is beyond your personal beliefs because it is supported and proven through modern science.

      Your personal stance on this issue does not or could not change the facts.

      Delete
  27. You poor sons of Pythagoras and Plato. You still don't understand why your math is so lousy and your perception of dialog and eloquence is to let your mouth run unbridled.
    Lennard

    ReplyDelete
    Replies
    1. Hey, don't let this conversation get out of hand!

      Delete
  28. Klaus.
    With all respect.
    Should you consider my answers or comments to this contributor wrong, or find my remarks straying of the issue, as defined by this gent, I should appreciate your critics.
    meanwhile, I see your remarks as that of the frustrated teacher saying "keep quiet children" when asked uncomfortable questions by the students.
    Are we getting too close for comfort?
    Lennard

    ReplyDelete
    Replies
    1. Oh no, just keep going. I am responsible for my actions and everyone else for his or hers.

      Delete