>Chorafa said if the Yes vote won, she would be so disappointed she would think about leaving Greece with her two small children and moving abroad.
That reminds me of the spate of Americanslwho, upon the Supreme Court striking down gay marriage bans, said they were moving to Canada. I feel like some sentiment is wildly out of whack here
This is not the same at all. Greece has seen several years of economic depression on the order of America's experience during the Great Depression. Many people are leaving already to find work. A Greek threat to emigrate is not empty.
Uh, no - this is a completely different situation. Whereas gay marriage has little to no effect on most Americans' lives, the results of this vote will affect each and every Greek citizen for years (decades?) to come.
Moving abroad (assuming that option is available to you) might simply be the rational thing to do in such a case.
True I should have been more specific about what I saw as the connection. This woman, and I presume many other people, seem to want credit for giving up. I'm not really speaking as to the rationality of the sentiment, just noting that giving up doesn't impress me much.
The original commenter already responded to this post, but I'm pretty sure he was making fun of the fact that someone was pissed about the United States allowing gay marriages, and so the solution for them was somehow moving to Canada -where they've allowed gay marriages for much longer.
Basically, I don't like what they're doing here so I'm gonna move to someplace where they're doing it worse (a little backasswards in thinking, maybe even ignorance). This woman would likely move to elsewhere in the Eurozone, or another country with similar banking/economics strategies.
Greece is in bad shape but might actually do better from having more independent control while sorting out its finances as the direction from Europe at the moment suffers from severe conflicts of interest. Either a yes or no vote could have bad consequences as Greece is between a rock and a hard place right now, but the reputation of the Eurozone leaders is what really took a hit here, not Greece.
What does "sorting out finances" even mean in the context of a country that does not actually produce/export anything[1]? Will they somehow make money appear without outside investments?
Irrespective of snark, it means sorting out finances.
As a percentage of their GDP, Greece has a larger industrial sector than the UK, and they also have the world's largest merchant navy. Greece should have no problem in having a functioning economy, this current crisis is all structural, not fundamental.
edited to add, I would also not be hasty to write off the Greeks, of all people, as unable to construct innovative economic and political solutions in a crisis. They have form.
That seems unlikely I'm afraid. Their banking sector is insolvent and without ECB support it will not revive without a return to the drachma and a devaluation. ECB support seems unlikely unless Greece is within an approved bailout programme and that in turns looks unlikely as it took 5 months of negoatiations to come close to the last agreement and that was only to complete an existing programme, not start a new one.
The process of issuing a new currency takes, from what I've read, months, during which the Greek economy will be in limbo, which will do a large amount of damage.
Sure in the long term they would get increased competitiveness from being a cheaper source of goods as the drachma devalues, but that'll be after an extremely painful banking event.
They do produce and export things (note: tourism is a kind of export). Some of the news stories have anecdotes from manufacturers complaining they cannot import the raw materials they need.
The problem is they import a lot more. Including things like food, fuel and electricity.
Sorting out Greece's finances mean a very sharp and severe recession that makes what they went through so far look like a stroll through a grassy meadow. Eviction from the EU is not entirely unthinkable, especially if the collapse triggers a refugee crisis with a lot of internal migration.
Doesn't that depend on where the current results come from? If you watch the results of a US Presidential election on the county level, you can see much wider swings; the cities, which vote D, often turn in their results much later than the rural counties.
(Or maybe in this case, the results really are representative. I know nothing about Greek politics.)
The map on the Guardian page that this HN submission points to suggests otherwise re: it being a representative sample. The districts appear to be relatively large, and most districts are reporting 0% counted while others are at e.g. 50%. The districts with any votes reported at all are also strongly clustered.
I think we're working from different definitions of "representative" The sense I mean it in is, "the election centers that have reported results are demographically representative, and therefore predictive, of countrywide results".
That might be the case, but you didn't provide any evidence to suggest it is, so the more likely explanation is that you thought I meant something else by the word.
The results are from all voting centers. Once a voting center finishes counting, it sends it to the data center. So the data are sent more or less randomly to the data center. You are right that this does not mean that are truly representative. But for the sake of simplicity we can call it "representative".
The UK is a pretty extreme example of that (the other way round; urban areas tend to report first), so May saw Labour-party members discussing the unexpected scale of their defeat even whilst the actually announced results and counted votes put them some way ahead.
Of course, in this case the analysts had plenty of past data to work with in being confident that narrow successes in urban areas and defeats in marginal areas meant little hope of any gains anywhere else.
Not really .... their rationale isn't very good. Krugman disappoints, as is often the case. His logic is, "an elected government made unreasonable demands on other nations and when they refused, this was those countries attempting to replace the Greek government".
Well, no. It's just them refusing a bum deal. If the result of that is Syriza falls, that'll be the Greek's doing, not the EU.
Heck, the Eurozone FinMin's have been incredibly patient with Greece. It cannot be easy to negotiate professionally with people who are constantly calling you Nazis and terrorists for simply attaching some conditions to yet another loan.
Krugman could have done a better job explaining his argument, but I think it's solid at the core: there is nothing to gain for the Greek from more austerity, that will only lead to further contraction of the economy. Greece needs inflation, not deflation.
Yep it is amazing they've been this measured, however that is the European way.
Unfortunately I think that reserve causes them to come off worse in the media war, as the other side are very quick to make bombastic statements and there's not a lot of people on the other side pointing out the, rather obvious, logical issues with them.
> the Eurozone FinMin's have been incredibly patient with Greece
I'm not sure they have. It's just rhetoric to offer obviously unacceptable terms and blame the other party for not accepting them, and it's old-fashioned cruelty to starve a debtor who obviously cannot pay.
I'll add that it's less than persuasive to dismiss Piketty, Stiglitz and Krugman so easily. Their credentials don't make them right, but it takes more than that to write them off persuasively.
If you believe the various European governments, contagion risk is small, so it's not likely to hit Spain, Portugal et al.
As the ECB can provide liquidity to European banks that are not insolvent (as it has been for Greece) they can stop bank runs from causing an issue in the short term at least.
What Greece's future is, from what I can see, far less certain. The Greeks state that they will now get a quick agreement, but that seems unlikely.
Any new bailout agreement would need to be ratified in 18 parliaments (the Eurozone) and in several of those the mood to accept the kind of deal Greece wants seems lacking.
As such it seems there will be an extended negotiation, which wouldn't be a huge issue except for the fact that Greece's banks are currently insolvent and without ECB funding don't appear to have any route back to solvency without leaving the Euro.
There may be some kind of political solution to that quandry but I have a feeling it will not be as certain and easy a path as the Greek government have currently stated.
Not necessarily, Greece in itself is a very interesting situation. Almost half of their entire countries' GDP was generated by a single city before 2011. [1][2]second link is a decent read about individual municipalities going down slowly within Attica
I claim that the steady decline of economics in that city, which might have had something to do with the Fascism rise with the Golden Dawn political party, destroyed their overall economy. [3]
Many foreign workers who made up a decent amount of the manual labor jobs in that city left in fear, meanwhile Greeks couldn't fit these jobs because of the lackluster pay and poisonous political/economic climate at that time.
To what extent does Spain's political system manage its civil service as a spoils system for the benefit of party supporters? Greece apparently invented entire departments to pay party members.
To what extent do Spain's entitlement obligations (health care, retirement, &c) track its economy? Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues.
To what extent was Spain's accession to the EU exploited as a bonanza for foreign banks? Greece's debt is apparently the product of a ratings arbitrage scheme that occurred when its speculator-grade sovereign debt suddenly became backstopped by the ECB.
To what extent do Spain's citizens buy into the financial philosophy of the EU? Greece has massive self-employment, a thriving undocumented market, and pitiful revenue collection. For decades, Greece has "financed" itself with stated revenue preferences (high tax rates) that do not meaningfully track revealed revenue preferences (low tax collection and enforcement).
> To what extent do Spain's entitlement obligations (health care, retirement, &c) track its economy? Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues.
The situation about Greece is mired with propaganda and media tells us that Greeks just want to lay on beach, never work and retire when they are 50. I've heard so many parrot that because they read it in a magazine and it is not true. Greeks work the most hours in the EU and their retirement age is higher: http://www.newstatesman.com/blogs/world-affairs/2012/05/expl...
So there is no reason to believe that "Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues" is true if it is not backed up by stats proving it to be true.
You've refuted a statistic I didn't provide. The full retirement age in the US in 66 (soon to be 67). The average retirement age in Greece is 61. 17.5% of Greece's GDP goes to retirement spending. US public retirement insurance is 5% of GDP.
The comparison I made isn't "lazy" versus "industrious". It's "revenue vs. spending", using the USA and Scandinavia as anchors for comparison. Greek revenue is more like USA revenue than Swedish revenue. Greek spending is more like Swedish spending (Swedish retirement age: 65) than like USA spending.
I'm trying not to make value judgements. I don't believe that the Greeks are lazy and sitting on beaches. It does, however, appear that their fiscal policy is mismanaged.
I can't refute your statement "Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues" because it is very vague. In either case the onus is on the person making the statements to back them up not on other persons to refute them.
The reason I made the comparison with retirement age is because you can ask a random person on the street in Sweden or other country whether Greeks retire earlier than the EU average or not and (I'm sure) almost everyone people will say that they retire earlier even though that is false.
Bluntly, you made two statements 1) Greece apparently provides Scandinavian-grade benefits and 2) [has] Alabama-grade revenues. Back them up with evidence or else you are just parroting back what someone else told you.
First, we're all just "parroting back what someone else told us", unless one of us is secretly an economist specializing in the public sector of Greece.
That said: it's really not that vague. Go to the OECD stats site. Go to "Social Expenditure", isolate "old age" retirement benefits (which in Greece start at 61), go to the column on the table with the most recent full data, sort that column, note where Greece falls on it, note where Sweden falls on it, and note where the US falls on it.
Now, in another tab maybe, go to Public Sector/Taxation, to comparative tables for tax revenue, and do "total tax revenue per capita". Make the same comparisons. You will note that the US actually gets quite a bit more money per citizen than Greece does. My intuition was the same, which is why I chose Alabama for the comparison, not the US as a whole; Alabama is one of the least-taxed states in the union.
It is true that the intuition to make this comparison came from someone else (in my case: Matt Yglesias, though lord knows where he got the idea to make the comparison). What is also true is that the assertion is verifiable.
Thank you for checking. Do you mean the sheet "Public expenditure on old-age and survivors cash benefits, in % GDP"? What numbers are you comparing exactly? The stats I found end at 2011 and the Greeks pensions have been slashed since then so I wonder how reliable they are for their current pension benefits.
>The situation about Greece is mired with propaganda and media tells us that Greeks just want to lay on beach, never work and retire when they are 50. I've heard so many parrot that because they read it in a magazine and it is not true. Greeks work the most hours in the EU and their retirement age is higher: http://www.newstatesman.com/blogs/world-affairs/2012/05/expl....
This has nothing to do with what the commenter is arguing. What s/he is saying is that Greece was trying to provide top-tier medical advantages while their economy was running down the shitter. I don't really think we need "stats" to back this up. The economy is lackluster right now, how do you provide 'amazing' healthcare when there's no revenue?
In 2000 Greece was ranked 14th in overall healthcare systems, above Germany and the United States![1]
How do you provide that kind of medical industry without having a decent revenue stream or some way to fund it? Sure their economy might have been growing at that point. But when your economy shrinks and you have less revenue streams your public services need to shrink with it.
In Spain the Syriza friendly Podemus is already in the lead, but they
need to wait for the next elections, to re-evaluate their payment
terms. In Portugal the Syriza-friendly PS will win in October.
While the right wing extremists, Germany, but also the EU officials
Juncker, Draghi, Lagarde, Djiselbloem, Schulz, Schaeuble, Merkel and
their press corps are still violently trash talking and lying about
Syriza, effectively burying the EU. Everyone knows that they are wrong
and lost face. They were all caught lying and doing too much damage
with our economy and the EU project. Syriza is their best chance to
get Greece implement the necessary reforms in the next 10-20
years. The established Greek parties caused the situation and Syriza
is their best chance to turn it around. They are also the ones who
are not lying.
Germany got to backup the defaulting EMS fonds which will hurt them. A
lot. Why they are still not trying to save them is beyond my
understanding.
Greece could try to talk them to senses, because they have the
numbers, the morale and the people behind them, but it does not look
like so. So effectively all the next european elections will be won by
the left, and Goldmann-Sachs (Draghi) & IMF will have it much harder
than now.
Which is good. Even Germany is not following their own austerity
measures. They cheat over France by going on with their low-wage
policies and they cheated over the inflation caps.
I'm honestly puzzled by what the Greek Government's endgame is here. It looks like they've won their vote, but what's next?
They return to Europe tomorrow and demand a better settlement. Why do they think the other Eurozone governments will accede to that demand?
Yep the greek government now have a clear democractic mandate to demand a better settlement, but that doesn't mean the other Eurozone governements have to agree to one.
The bit that I've not seen mentioned prominently in many articles on this is that every billion Euros that is forgiven from Greek debt or that is provided in aid, is a billion Euros that must come from the other Eurozone economies, and by extension their taxpayers.
From a political perspective what national parliament are going to pass a bill that costs them that money, at a time when their own economies, in many cases, are already suffering.
Also AFAIK a new bailout deal needs to be passed in all 18 other Eurozone nations, unanimously...
It was all a bluff. The government got elected on bs promises, knew they couldn't keep them, diverted the decision to the citizens knowing perfectly well that whatever they choose will be painful, at the same time urging the citizens for the more painful (NO) option.
EU called their bluff and now they are royally screwed. Instead of slowly paying their debt, they will very likely print their own money, which is guaranteed to be very inflational.
I assume that Varoufakis gambled that the EU/Troika would never allow a Greek default and ultimately succumb to Greece's demands. However a Greek default (at least on parts of its debt) has been very likely for quite some time now. The burden of this default would be mostly carried by the ESFS and as a consequence EU countries (because they provide the guarantees). In a worst case scenario most countries could probably cover the losses on Greek debt by issuing new government bonds themselves, which would in turn be bought by the ECB, which just further inflates their balance sheet. This is not an improbable outcome because inflation rates are still very low.
I think financially you could be right, and perhaps if this had occurred 6 months ago, it could have flown politically.
The challenge with that approach would seem to be that politically in several Eurozone nation there's been a hardening of sentiment around this and so even if the leaders of those nations want to do that kind of deal, they may have a tough time convincing their own parlaiments..
>I'm honestly puzzled by what the Greek Government's endgame is here. It looks like they've won their vote, but what's next?
They return to Europe tomorrow and demand a better settlement. Why do they think the other Eurozone governments will accede to that demand?
They don't (assume it). They just know, from the results, that a worse settlement is not acceptable.
They can always default, and let the chips fall when they may.
> The bit that I've not seen mentioned prominently in many articles on this is that every billion Euros that is forgiven from Greek debt or that is provided in aid, is a billion Euros that must come from the other Eurozone economies, and by extension their taxpayers.
It's not at all a zero sum game. The other nations benefit significantly:
1) They gain political and economic stability for the institutions involved (the EU, the Euro, etc.) and for Europe in general.
2) They avoid an economic and political meltdown in a European country. Such situations spawn other problems (crime, refugees, political extremism, etc.) and those problems tend to spread across borders.
3) They gain a more prosperous and stable trading partner, which helps everyone.
4) They gain the precedent that when they are in trouble, for whatever reason, other nations will help them. Germany might recall the forgiveness of their massive crimes (and war debts) by their neighbors, enabling them to become the largest economy in Europe today. (EDIT: And all the creditor nations are depending on another country to defend them in case of war.)
5) They avoid Greece forming stronger bonds with other powers, such as Russia and China.
6) There also is the simple moral gain, that the impoverished in Greece won't be driven to further misery.
The perspective that all that matters is money, and that it's every nation for itself is unrealistic.
You're point are all at a high level valid, but in raw Euros, countries who are already financially stretched will be asked to write-off tens of billions of Euros, which they will have to finance through increased debt.
That's tens of billions removed from their taxpayers.
If you're a national of another country who is currently undergoing painful austerity and Greece gets significant debt forgiveness, wouldn't you want the same for yourself?
Ireland, Spain, Portugal have all taken significant pain to their economies, do you thinnk their leaders can easily ask their tax payers to take more to bail the Greeks out?
And then if they do, would they not want their own debt forgiveness? The rest of Europe can't sustain a large number of countries seeking debt write-downs...
I don't see Europe as so economically fragile. If it were a nation, the EU would be the wealthiest in the history of the world (with the possibly exception of the U.S.; I'm too lazy to look it up).
This is hardly a novel or outlandish situation. The nature of bankruptcy is that creditors get a haircut; many nations have had their debts reduced (including Germany). The nature of civilization is that those with resources help those without.
> would they not want their own debt forgiveness?
It's theoretically possible, but the same could be said of any bankruptcy (my neighbor had his/her debts forgiven; do I want to go bankrupt too?) or for any program that benefits one region/state/industry more than another, yet these programs persist.
Also, maybe the EU or Eurozone does need a program to help all struggling states.
TLDR: Greek debt is used as collateral for loans by European banks. When Greek debt takes a haircut, most (nearly all) European banks have to choose one of two options : either they can raise capital equivalent to the net Euro value of the haircut OR they have to reduce the amount they're loaning out by the net Euro value of the haircut times 100 (it was times 50 in the last crisis). In practice for most banks that will mean raising 3-4% capital (which will still seriously impact their share price of course), but apparently in a few cases it's near-distressed banks that'd need 20%.
Most banks will use a combination of both, so this will mean that effectively money loaned out across Europe by banks will have to reduce by 5%-10%.
52 comments
[ 3.7 ms ] story [ 115 ms ] threadThat reminds me of the spate of Americanslwho, upon the Supreme Court striking down gay marriage bans, said they were moving to Canada. I feel like some sentiment is wildly out of whack here
Moving abroad (assuming that option is available to you) might simply be the rational thing to do in such a case.
Basically, I don't like what they're doing here so I'm gonna move to someplace where they're doing it worse (a little backasswards in thinking, maybe even ignorance). This woman would likely move to elsewhere in the Eurozone, or another country with similar banking/economics strategies.
In contrast, the outcome of this referendum will have significant effects on the lives of ordinary Greeks for many years to come.
[1] compared to UK, France, Germany
As a percentage of their GDP, Greece has a larger industrial sector than the UK, and they also have the world's largest merchant navy. Greece should have no problem in having a functioning economy, this current crisis is all structural, not fundamental.
edited to add, I would also not be hasty to write off the Greeks, of all people, as unable to construct innovative economic and political solutions in a crisis. They have form.
The process of issuing a new currency takes, from what I've read, months, during which the Greek economy will be in limbo, which will do a large amount of damage.
Sure in the long term they would get increased competitiveness from being a cheaper source of goods as the drachma devalues, but that'll be after an extremely painful banking event.
The problem is they import a lot more. Including things like food, fuel and electricity.
Sorting out Greece's finances mean a very sharp and severe recession that makes what they went through so far look like a stroll through a grassy meadow. Eviction from the EU is not entirely unthinkable, especially if the collapse triggers a refugee crisis with a lot of internal migration.
Live results available at http://ekloges.ypes.gr/current/e/public/index.html#{%22cls%2...} (click on GB flag on bottom left to change to English)
(Or maybe in this case, the results really are representative. I know nothing about Greek politics.)
That might be the case, but you didn't provide any evidence to suggest it is, so the more likely explanation is that you thought I meant something else by the word.
EDIT- Now 62%, still essentially unchanged. Remarkable consistency so far.
http://www.theguardian.com/world/2015/jul/03/greek-referendu...
Well, no. It's just them refusing a bum deal. If the result of that is Syriza falls, that'll be the Greek's doing, not the EU.
Heck, the Eurozone FinMin's have been incredibly patient with Greece. It cannot be easy to negotiate professionally with people who are constantly calling you Nazis and terrorists for simply attaching some conditions to yet another loan.
Unfortunately I think that reserve causes them to come off worse in the media war, as the other side are very quick to make bombastic statements and there's not a lot of people on the other side pointing out the, rather obvious, logical issues with them.
I'm not sure they have. It's just rhetoric to offer obviously unacceptable terms and blame the other party for not accepting them, and it's old-fashioned cruelty to starve a debtor who obviously cannot pay.
I'll add that it's less than persuasive to dismiss Piketty, Stiglitz and Krugman so easily. Their credentials don't make them right, but it takes more than that to write them off persuasively.
As the ECB can provide liquidity to European banks that are not insolvent (as it has been for Greece) they can stop bank runs from causing an issue in the short term at least.
What Greece's future is, from what I can see, far less certain. The Greeks state that they will now get a quick agreement, but that seems unlikely.
Any new bailout agreement would need to be ratified in 18 parliaments (the Eurozone) and in several of those the mood to accept the kind of deal Greece wants seems lacking.
As such it seems there will be an extended negotiation, which wouldn't be a huge issue except for the fact that Greece's banks are currently insolvent and without ECB funding don't appear to have any route back to solvency without leaving the Euro.
There may be some kind of political solution to that quandry but I have a feeling it will not be as certain and easy a path as the Greek government have currently stated.
I claim that the steady decline of economics in that city, which might have had something to do with the Fascism rise with the Golden Dawn political party, destroyed their overall economy. [3]
Many foreign workers who made up a decent amount of the manual labor jobs in that city left in fear, meanwhile Greeks couldn't fit these jobs because of the lackluster pay and poisonous political/economic climate at that time.
[1]http://www.ansamed.info/ansamed/en/news/sections/economics/2... [2]http://www.keeptalkinggreece.com/2012/09/21/greek-municipali...
[3]http://blogs.aljazeera.com/blog/europe/high-police-support-g...
To what extent do Spain's entitlement obligations (health care, retirement, &c) track its economy? Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues.
To what extent was Spain's accession to the EU exploited as a bonanza for foreign banks? Greece's debt is apparently the product of a ratings arbitrage scheme that occurred when its speculator-grade sovereign debt suddenly became backstopped by the ECB.
To what extent do Spain's citizens buy into the financial philosophy of the EU? Greece has massive self-employment, a thriving undocumented market, and pitiful revenue collection. For decades, Greece has "financed" itself with stated revenue preferences (high tax rates) that do not meaningfully track revealed revenue preferences (low tax collection and enforcement).
The situation about Greece is mired with propaganda and media tells us that Greeks just want to lay on beach, never work and retire when they are 50. I've heard so many parrot that because they read it in a magazine and it is not true. Greeks work the most hours in the EU and their retirement age is higher: http://www.newstatesman.com/blogs/world-affairs/2012/05/expl...
So there is no reason to believe that "Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues" is true if it is not backed up by stats proving it to be true.
The comparison I made isn't "lazy" versus "industrious". It's "revenue vs. spending", using the USA and Scandinavia as anchors for comparison. Greek revenue is more like USA revenue than Swedish revenue. Greek spending is more like Swedish spending (Swedish retirement age: 65) than like USA spending.
I'm trying not to make value judgements. I don't believe that the Greeks are lazy and sitting on beaches. It does, however, appear that their fiscal policy is mismanaged.
The reason I made the comparison with retirement age is because you can ask a random person on the street in Sweden or other country whether Greeks retire earlier than the EU average or not and (I'm sure) almost everyone people will say that they retire earlier even though that is false.
Bluntly, you made two statements 1) Greece apparently provides Scandinavian-grade benefits and 2) [has] Alabama-grade revenues. Back them up with evidence or else you are just parroting back what someone else told you.
That said: it's really not that vague. Go to the OECD stats site. Go to "Social Expenditure", isolate "old age" retirement benefits (which in Greece start at 61), go to the column on the table with the most recent full data, sort that column, note where Greece falls on it, note where Sweden falls on it, and note where the US falls on it.
Now, in another tab maybe, go to Public Sector/Taxation, to comparative tables for tax revenue, and do "total tax revenue per capita". Make the same comparisons. You will note that the US actually gets quite a bit more money per citizen than Greece does. My intuition was the same, which is why I chose Alabama for the comparison, not the US as a whole; Alabama is one of the least-taxed states in the union.
It is true that the intuition to make this comparison came from someone else (in my case: Matt Yglesias, though lord knows where he got the idea to make the comparison). What is also true is that the assertion is verifiable.
Anyway I found stats for Finland (the only Scandinavian country using the Euro) for 2015 here: http://www.etk.fi/en/service/average_pensions/1453/average_p... and for Greece for 2015 here: http://www.macropolis.gr/?i=portal.en.the-agora.2622 If the numbers on those pages are true, then the average pensions per month are 1588 and 884 for Finland and Greece respectively.
This has nothing to do with what the commenter is arguing. What s/he is saying is that Greece was trying to provide top-tier medical advantages while their economy was running down the shitter. I don't really think we need "stats" to back this up. The economy is lackluster right now, how do you provide 'amazing' healthcare when there's no revenue?
In 2000 Greece was ranked 14th in overall healthcare systems, above Germany and the United States![1]
How do you provide that kind of medical industry without having a decent revenue stream or some way to fund it? Sure their economy might have been growing at that point. But when your economy shrinks and you have less revenue streams your public services need to shrink with it.
[1]http://www.who.int/whr/2000/en/whr00_en.pdf
While the right wing extremists, Germany, but also the EU officials Juncker, Draghi, Lagarde, Djiselbloem, Schulz, Schaeuble, Merkel and their press corps are still violently trash talking and lying about Syriza, effectively burying the EU. Everyone knows that they are wrong and lost face. They were all caught lying and doing too much damage with our economy and the EU project. Syriza is their best chance to get Greece implement the necessary reforms in the next 10-20 years. The established Greek parties caused the situation and Syriza is their best chance to turn it around. They are also the ones who are not lying.
Germany got to backup the defaulting EMS fonds which will hurt them. A lot. Why they are still not trying to save them is beyond my understanding.
Greece could try to talk them to senses, because they have the numbers, the morale and the people behind them, but it does not look like so. So effectively all the next european elections will be won by the left, and Goldmann-Sachs (Draghi) & IMF will have it much harder than now.
Which is good. Even Germany is not following their own austerity measures. They cheat over France by going on with their low-wage policies and they cheated over the inflation caps.
They return to Europe tomorrow and demand a better settlement. Why do they think the other Eurozone governments will accede to that demand?
Yep the greek government now have a clear democractic mandate to demand a better settlement, but that doesn't mean the other Eurozone governements have to agree to one.
The bit that I've not seen mentioned prominently in many articles on this is that every billion Euros that is forgiven from Greek debt or that is provided in aid, is a billion Euros that must come from the other Eurozone economies, and by extension their taxpayers.
From a political perspective what national parliament are going to pass a bill that costs them that money, at a time when their own economies, in many cases, are already suffering.
Also AFAIK a new bailout deal needs to be passed in all 18 other Eurozone nations, unanimously...
EU called their bluff and now they are royally screwed. Instead of slowly paying their debt, they will very likely print their own money, which is guaranteed to be very inflational.
The challenge with that approach would seem to be that politically in several Eurozone nation there's been a hardening of sentiment around this and so even if the leaders of those nations want to do that kind of deal, they may have a tough time convincing their own parlaiments..
They don't (assume it). They just know, from the results, that a worse settlement is not acceptable.
They can always default, and let the chips fall when they may.
It's not at all a zero sum game. The other nations benefit significantly:
1) They gain political and economic stability for the institutions involved (the EU, the Euro, etc.) and for Europe in general.
2) They avoid an economic and political meltdown in a European country. Such situations spawn other problems (crime, refugees, political extremism, etc.) and those problems tend to spread across borders.
3) They gain a more prosperous and stable trading partner, which helps everyone.
4) They gain the precedent that when they are in trouble, for whatever reason, other nations will help them. Germany might recall the forgiveness of their massive crimes (and war debts) by their neighbors, enabling them to become the largest economy in Europe today. (EDIT: And all the creditor nations are depending on another country to defend them in case of war.)
5) They avoid Greece forming stronger bonds with other powers, such as Russia and China.
6) There also is the simple moral gain, that the impoverished in Greece won't be driven to further misery.
The perspective that all that matters is money, and that it's every nation for itself is unrealistic.
That's tens of billions removed from their taxpayers.
If you're a national of another country who is currently undergoing painful austerity and Greece gets significant debt forgiveness, wouldn't you want the same for yourself?
Ireland, Spain, Portugal have all taken significant pain to their economies, do you thinnk their leaders can easily ask their tax payers to take more to bail the Greeks out?
And then if they do, would they not want their own debt forgiveness? The rest of Europe can't sustain a large number of countries seeking debt write-downs...
This is hardly a novel or outlandish situation. The nature of bankruptcy is that creditors get a haircut; many nations have had their debts reduced (including Germany). The nature of civilization is that those with resources help those without.
> would they not want their own debt forgiveness?
It's theoretically possible, but the same could be said of any bankruptcy (my neighbor had his/her debts forgiven; do I want to go bankrupt too?) or for any program that benefits one region/state/industry more than another, yet these programs persist.
Also, maybe the EU or Eurozone does need a program to help all struggling states.
TLDR: Greek debt is used as collateral for loans by European banks. When Greek debt takes a haircut, most (nearly all) European banks have to choose one of two options : either they can raise capital equivalent to the net Euro value of the haircut OR they have to reduce the amount they're loaning out by the net Euro value of the haircut times 100 (it was times 50 in the last crisis). In practice for most banks that will mean raising 3-4% capital (which will still seriously impact their share price of course), but apparently in a few cases it's near-distressed banks that'd need 20%.
Most banks will use a combination of both, so this will mean that effectively money loaned out across Europe by banks will have to reduce by 5%-10%.
[1] https://www.ecb.europa.eu/mopo/implement/mr/html/calc.en.htm...