8 ms·

The discussion over the last months was not about austerity - this was an 2014 topic - but about a plan for the future. The greek government did provide a plan

by holoto 11y ago

The discussion over the last months was not about austerity - this was an 2014 topic - but about a plan for the future. The greek government did provide a plan without much detail, one you would not get any money from your bank for a house or any money - this is HN - from a VC. Greece hopes to get billions of $ based on some napkin calculations. Reason is Greece does not want to commit to any foreign influence because it feels nationally threatened. The IMF enforces a way by which it hopes to a.) get the money back it puts in b.) no need to put money back in 5y in the future. You could make this about money or investment, or you can make this about right-wing/left-wing.

x0x0 11y ago
Well, it's created by relatively simple facts: a less productive periphery without the aid of a floating currency will require permanent subsidization by the more productive core or the end of the currency union. Now everyone has to pick.
- deleted 11y ago
  [deleted]
- holoto 11y ago
  Yes and hopefully Germany picks an Euro exit. As is clear to anyone interested in the topic and listening to French government officials, binding Germany in the Euro was the price for reunification.
  - euccastro 11y ago
    Euro exit is the nuclear option that Germany wants to keep in order to maintain its hegemony within the Eurozone, but never wants to exercise. The Euro served nobody better than Germany. The day Germany starts facing competitive devaluations all across Europe, recession will be brutal.
  - holoto 11y ago
    @euccastro Yes life was miserable with the Deutsche Mark. Oops it was much better for most Germans. China is in trouble because it controls it's own export destiny through it's currency? I think not.
    - euccastro 11y ago
      Economic policy is not designed for the benefit of "most Germans". I can assure you that life became much better for "some Germans" in the years since the Deutsche Mark, as cheap labor from Eastern Europe drove costs down and profits up, while less competitive countries within the EU couldn't devaluate their currency to rebalance trade flows. Actually, it became so much better that they didn't know what to do with all those euros. So they poured showers of them into said less competitive countries, fostering all kinds of bubbles. http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/ http://blog.mpettis.com/2015/02/syriza-and-the-french-indemn... When said bubbles exploded, those "some Germans" were bailed out, in great part by money from "most Germans", whatever little could be squeezed from "most Greeks", and "most" people from all countries rich and poor. "Most Greeks" never saw any of that bailout money. Alas, coming back to the Deutsche Mark will not bring back the good old times for "most Germans". Even if it did, it won't happen because "some Germans" are perfectly happy with the current situation and the power it gives them.
      - taliesinb 11y ago
        Exactly. More concisely put than I was able to!
    - twobits 11y ago
      Exactly. "For most germans". That's the truth. There is no germany, and no greece. You, a simple tax payers, me, a simple (greek) tax payer, all tax payers in europe, are paying for the german and french banks. Deutsche bank, for example, is not "most germans". Etc.
  - euccastro 11y ago
    Re: the French position wrt the Euro, you'd be surprised: http://yanisvaroufakis.eu/2014/12/26/6265/ http://yanisvaroufakis.eu/2014/12/26/6265/
taliesinb 11y ago
> The greek government did provide a plan without much detail, one you would not get any money from your bank for a house or any money You've got it completely backwards: Greece is the equivalent of a person who desperately needs to declare bankruptcy, but is prevented by his creditors from doing so. Instead he is forced to borrow ever more money to pay off his old debts. Eventually, no-one can pretend this is working anymore, so the creditor suggests he sell his house, his car, all his work implements. And if we take the analogy back a thousand years, even his children, himself. "Debt peonage", it was called, and it has been incredibly common through human history. Of course we abolished it in the developed world with things like bankruptcy laws, which acknowledge that no debt is absolute -- ability to pay matters, and the risk assumed by creditors has sometimes to result in losses. But there is no equivalent international law for entire countries. Instead, the winners are the usual suspects -- the IMF, rich countries, American hedge funds. And the losers get 'structural adjustment': their infrastructure and natural resources sold off, their local industries subject to ahistorical competition, and their social safety nets shredded -- people actually die -- but of course the predatory loans are repaid. Greece's Varoufakis proposed the only sane alternative: GDP-linked bonds, which ensure that the creditor and the debtor actually have their interests aligned, and Greece's payments can represent what they are actually humanly able to pay. That way it ends up mattering to Germany that Greece's economy has shrunk 25% -- how is that going to help them pay back? Of course, that was totally ignored. > Greece hopes to get billions of $ based on some napkin calculations. No, let's keep the emphasis in the right place, so it is clear who is being unreasonable here: Greece needs short-term loans to pay back existing loans, and it needs that time so that it can put forward more detailed proposals that challenge the neoliberal austerity doctrine, which is really a convenient facade for deeper political strategems. > Reason is Greece does not want to commit to any foreign influence because it feels nationally threatened. Foreign influence? Is that a euphemism for when your national infrastructure is privatized and sold off to foreign companies, for when your pensioners resort to begging, for when hospitals shut down, your young people have 40% unemployment, etc? I mean, the active destruction and plunder of your country? And the emphasis on foreign is misplaced: continued austerity will kindle yet more nationalistic, fascistic, racist, and xenophobic political movements across the continent. It stands to reason: inflict economic violence on entire nations and people within them become enraged and violent, although they direct their own violence against those even weaker and more disenfranchised. I feel like I shouldn't have to point out that the second world war followed the debt crisis of a nation that was put under a completely unrealistic, punitive repayment regime. > The IMF enforces a way by which it hopes to a.) get the money back it puts in b.) no need to put money back in 5y in the future. You could make this about money or investment, or you can make this about right-wing/left-wing. There's a moral dimension, independent of politics. Should an international bank, whose shareholders are the very richest countries, profit at the expense of the ruination of a small nation that happens to be the actual seat of democracy?

by holoto 11y ago

x0x0 11y ago

Well, it's created by relatively simple facts: a less productive periphery without the aid of a floating currency will require permanent subsidization by the more productive core or the end of the currency union. Now everyone has to pick.

deleted 11y ago
[deleted]
holoto 11y ago
Yes and hopefully Germany picks an Euro exit. As is clear to anyone interested in the topic and listening to French government officials, binding Germany in the Euro was the price for reunification.
- euccastro 11y ago
  Euro exit is the nuclear option that Germany wants to keep in order to maintain its hegemony within the Eurozone, but never wants to exercise. The Euro served nobody better than Germany. The day Germany starts facing competitive devaluations all across Europe, recession will be brutal.
- holoto 11y ago
  @euccastro Yes life was miserable with the Deutsche Mark. Oops it was much better for most Germans. China is in trouble because it controls it's own export destiny through it's currency? I think not.
  - euccastro 11y ago
    Economic policy is not designed for the benefit of "most Germans". I can assure you that life became much better for "some Germans" in the years since the Deutsche Mark, as cheap labor from Eastern Europe drove costs down and profits up, while less competitive countries within the EU couldn't devaluate their currency to rebalance trade flows. Actually, it became so much better that they didn't know what to do with all those euros. So they poured showers of them into said less competitive countries, fostering all kinds of bubbles. http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/ http://blog.mpettis.com/2015/02/syriza-and-the-french-indemn... When said bubbles exploded, those "some Germans" were bailed out, in great part by money from "most Germans", whatever little could be squeezed from "most Greeks", and "most" people from all countries rich and poor. "Most Greeks" never saw any of that bailout money. Alas, coming back to the Deutsche Mark will not bring back the good old times for "most Germans". Even if it did, it won't happen because "some Germans" are perfectly happy with the current situation and the power it gives them.
    - taliesinb 11y ago
      Exactly. More concisely put than I was able to!
  - twobits 11y ago
    Exactly. "For most germans". That's the truth. There is no germany, and no greece. You, a simple tax payers, me, a simple (greek) tax payer, all tax payers in europe, are paying for the german and french banks. Deutsche bank, for example, is not "most germans". Etc.
- euccastro 11y ago
  Re: the French position wrt the Euro, you'd be surprised: http://yanisvaroufakis.eu/2014/12/26/6265/ http://yanisvaroufakis.eu/2014/12/26/6265/

taliesinb 11y ago

> The greek government did provide a plan without much detail, one you would not get any money from your bank for a house or any money You've got it completely backwards: Greece is the equivalent of a person who desperately needs to declare bankruptcy, but is prevented by his creditors from doing so. Instead he is forced to borrow ever more money to pay off his old debts. Eventually, no-one can pretend this is working anymore, so the creditor suggests he sell his house, his car, all his work implements. And if we take the analogy back a thousand years, even his children, himself. "Debt peonage", it was called, and it has been incredibly common through human history. Of course we abolished it in the developed world with things like bankruptcy laws, which acknowledge that no debt is absolute -- ability to pay matters, and the risk assumed by creditors has sometimes to result in losses. But there is no equivalent international law for entire countries. Instead, the winners are the usual suspects -- the IMF, rich countries, American hedge funds. And the losers get 'structural adjustment': their infrastructure and natural resources sold off, their local industries subject to ahistorical competition, and their social safety nets shredded -- people actually die -- but of course the predatory loans are repaid. Greece's Varoufakis proposed the only sane alternative: GDP-linked bonds, which ensure that the creditor and the debtor actually have their interests aligned, and Greece's payments can represent what they are actually humanly able to pay. That way it ends up mattering to Germany that Greece's economy has shrunk 25% -- how is that going to help them pay back? Of course, that was totally ignored. > Greece hopes to get billions of $ based on some napkin calculations. No, let's keep the emphasis in the right place, so it is clear who is being unreasonable here: Greece needs short-term loans to pay back existing loans, and it needs that time so that it can put forward more detailed proposals that challenge the neoliberal austerity doctrine, which is really a convenient facade for deeper political strategems. > Reason is Greece does not want to commit to any foreign influence because it feels nationally threatened. Foreign influence? Is that a euphemism for when your national infrastructure is privatized and sold off to foreign companies, for when your pensioners resort to begging, for when hospitals shut down, your young people have 40% unemployment, etc? I mean, the active destruction and plunder of your country? And the emphasis on foreign is misplaced: continued austerity will kindle yet more nationalistic, fascistic, racist, and xenophobic political movements across the continent. It stands to reason: inflict economic violence on entire nations and people within them become enraged and violent, although they direct their own violence against those even weaker and more disenfranchised. I feel like I shouldn't have to point out that the second world war followed the debt crisis of a nation that was put under a completely unrealistic, punitive repayment regime. > The IMF enforces a way by which it hopes to a.) get the money back it puts in b.) no need to put money back in 5y in the future. You could make this about money or investment, or you can make this about right-wing/left-wing. There's a moral dimension, independent of politics. Should an international bank, whose shareholders are the very richest countries, profit at the expense of the ruination of a small nation that happens to be the actual seat of democracy?