Greece Throws in the Towel
[guest post by JVW]
Reuters reports that the EU has held a hard line with Greece and that Greek Prime Minister Alexis Tsipras has acceded to German demands that will once again impose austerity upon the Greek budget and will give EU authorities final say over any budgetary deviations the Greeks may request. This is a humiliating defeat for the cocky young Marxist prime minister who urged his people to reject a much more favorable proposal from the EU in a public referendum one week ago. Tsipras now faces the unenviable position of having to expel the most radical members of his governing coalition in order to convince his parliament to accept these terms, after which time he will likely be forced to resign himself. In the end, the EU concluded they could do without Greece, but the Greeks realized they cannot do without the EU.
Not only should this serve as a valuable lesson on the vulnerability of the European Union, but it should certainly serve as a warning for the Democrat Party here in the U.S. which seems to be deferring to the Sanders/de Blasio/Warren wing on all matters economic. Earlier today, Hillary! Rodham Clinton, the once and future shoo-in for the Presidency, took a swipe at her long-time Wall Street buddies in order to bring her economic agenda more in line with that of the Occupy crowd. It promises to get even more interesting from here.
– JVW
I get a perverse satisfaction out of linking to an opinion piece from the loony leftist Harold Myerson which argues that Hillary! is a corporate stooge.
JVW (8278a3) — 7/13/2015 @ 12:14 pmi wonder if china will be as patient and kind with us when the time comes
happyfeet (a037ad) — 7/13/2015 @ 12:28 pmUnfortunately European-style “austerity” isn’t really all that austere, and it includes tax increases that will only make things worse.
Milhouse (7d5ad7) — 7/13/2015 @ 12:30 pmAgreed, Milhouse, but the one thing I like about the proposal is that it requires Greece to sell off a number of assets and privatize a number of services that had been previously been delivered by the government. If Greece shows that they are willing to swallow this medicine, then perhaps the EU might be willing to provide more generous terms.
And apparently Apple is providing one month free of iCloud usage for all Greek citizens. Because that will get Greece back on track in no time flat.
JVW (8278a3) — 7/13/2015 @ 12:40 pmre #2: China holds a lot less US debt than the media and pundits would have you believe.
both in total dollars and as a percentage of ‘bond holders’.
Also, China is having its own severe economic problems at the moment.
seeRpea (181740) — 7/13/2015 @ 12:55 pmGreece went “all in” with a busted straight.
seeRpea (181740) — 7/13/2015 @ 12:57 pmThat is so very true, seeRpea. A charismatic young leader convinced his devoted followers that wishful thinking can overcome economic realities. Fortunately that could never happen here, right?
JVW (8278a3) — 7/13/2015 @ 1:06 pmDang it, no Putin intervention.
mg (31009b) — 7/13/2015 @ 1:07 pmI have popcorn every other night.
Hey! Naming rights for the Parthenon a la Minute Maid Park! Maybe some international Greek Yogurt company will bite?
elissa (1fa22f) — 7/13/2015 @ 1:10 pmPerhaps the Virgin conglomerate?
Milhouse (7d5ad7) — 7/13/2015 @ 1:20 pmChina holds a lot less US debt than the media and pundits would have you believe.
My understanding is that they have been divesting themselves of it for several years, Most recent US Treasuries have been “bought” by printing money.
However, the biggest owner is actually the Social Security Trust Fund, aka your retirement money. How does that work, and what does it mean?
Foreign owned debt is Foreign – $6.013 trillion That’s about one third.
In February 2015, Japan beat China as the largest holder, at $1.224 trillion. China decreased its holdings to $1.224 trillion from its November 2013 peak of $1.317 trillion.
China is not a major holder anymore.
Mike K (90dfdc) — 7/13/2015 @ 1:31 pmGreetings:
I don’t know how this would go in Greek, but in Bronx English it went:
You ate the ice cream,
and then some cake.
And now it’s time,
For your bellyache.
(With pre-apologies to Col Haiku)
11B40 (6abb5c) — 7/13/2015 @ 1:49 pmGreetings:
And in regard to your “cocky young Marxist” designation, they should have left in the anteroom the first time he showed up without a proper tie.
11B40 (6abb5c) — 7/13/2015 @ 1:52 pmI have to laugh at Tsipras. This is like walking out of a car dealership in a huff, only to return an hour later with your car visibly broken down. You KNOW you’re not getting as good a deal NOW.
Mitch (341ca0) — 7/13/2015 @ 2:02 pmA couple of things come to mind. First, I have friends that operate some animal shelters in Greece and they were terrified that Greece would exit the EU. They were already operating on a shoe-string and any money from foreign donations was disappearing into the banking system where they couldn’t get proper access to it. There was (and to a degree still is) a real fear their charges would go hungry and lose vet services. In addition, some of the improvements in government legislated animal care and anti-cruelty laws were directly attributable to requirements demanded by the EU for membership and could have been repealed or ignored if Greece lost it’s membership.
I also feel for the Greek people who have been going through this extreme austerity program for years now but would have been far worse off had they left the EU and EURO zone.
Having said all of that I wonder where the Bankers usual conservative lending policies were when previous Greek governments were borrowing massive sums to bankroll insanely generous social policies? Even an idiot could have seen the amounts being lent could only lead to fiscal and social ruin. The Brussels EU people could also see where this was going yet it seems that nobody was willing to step in until so much had been lent it threatened some of the banks and possibly some governments. I’m not saying for a moment that Greece is not responsible for getting itself into this mess but surely the idea of a EU includes stepping in when a member state is screwing up so bad as to end up giving up it’s sovereignty for the foreseeable future and having it’s population standard of living cut even more.
I do not think this problem is going away anytime soon.
scr_north (4ad0d2) — 7/13/2015 @ 2:11 pmAnd in regard to your “cocky young Marxist” designation, they should have left in the anteroom the first time he showed up without a proper tie.
That is so funny, 11B40. I am on record as being a fuddy-duddy about proper dress, and I had the exact same reaction when I saw him arrive to the meetings in an open collar. In my day at least the Marxists dressed like capitalists.
JVW (8278a3) — 7/13/2015 @ 2:15 pmHas there really been “extreme austerity” ?
JD (3b5483) — 7/13/2015 @ 2:49 pmOnly by EU standards
Milhouse (a04cc3) — 7/13/2015 @ 3:01 pmWell, their economy has shrunk by 25%, pensions have been reduced by something like 20%, the retirement age has been raised to 67, unemployment is at 26% and I suspect that a little research would show a lot more economic contractions so even by North American standards I think it qualifies as extreme austerity. Unless the “restructuring” that the EU promised to discuss gives a real haircut to the banks the Greeks will never get out of debt.
scr_north (4ad0d2) — 7/13/2015 @ 3:30 pm. . . even by North American standards I think it qualifies as extreme austerity.
Kind of depends on one’s definition of “extreme,” though your point about what Greece has gone through versus what we should be going through is entirely valid. And it’s true that real people (pensioners especially) are being affected by this. But Greece sounds like the guy who needs to lose 50 pounds to restore his health but bitches and moans so much while losing the first 15 that he convinces himself he can’t possibly go any further. Fortunately, his doctor (in this case the EU) isn’t buying it.
JVW (8278a3) — 7/13/2015 @ 3:41 pmSo for a dish of lentils did a dickless student sit-in organizer bend over for Merkel’s strap-on.
nk (dbc370) — 7/13/2015 @ 3:42 pmNo. See the article I linked. Austerity involves hardship, but hardship is not austerity. Increased spending is not austerity, and increased taxes is not only not austerity but counterproductive.
Milhouse (a04cc3) — 7/13/2015 @ 3:48 pmI think the moment is right for all of the Euroskeptics in the stupid EU parliament to demand that the EU create a mechanism for a nation formally leaving the EU. No more of this holding a gun to a country’s head. They can be vindictive and crappy all they want, but there should be a rational method for a citizen of a sovereign European nation to weigh the pros and cons of staying in the EU and make an informed decision. David Cameron has promised to hold a referendum on remaining in the EU for British voters within two years, and I think other nations might want to re-think whether a German-France-Belgian triumvirate is really where they want to cast their lot.
This whole kerfuffle with Greece ought to suggest to the Scots that they would be completely daft to leave Great Britain and throw their lot in as an independent EU member, but Scottish Independence advocates seem rather uninterested in acting rationally.
JVW (8278a3) — 7/13/2015 @ 3:53 pmScr – only a couple of your examples were of austerity, like reductions in pensions. The others are results of their failed economy, and none are extreme, especially considering what they did to their own economy.
JD (3b5483) — 7/13/2015 @ 3:56 pmThe EU definition of austerity is “Pay the bankers”. Of the “bailout”, 92% was going to go to the bankers under the *better* June 25 deal. The Nazis also wanted to increase the VAT on hotels from an effective rate of 7% to 23%. In other words, destroy Greece’s principal industry.
Tsipras is not a Marxist. Marxists have guts. He’s a French-style liberal quasi-socialist leech.
nk (dbc370) — 7/13/2015 @ 3:56 pmThere is, more than ever, no end to this crisis in Greece, Cyprus,
DNF (208255) — 7/13/2015 @ 4:35 pm… Total war is the certain outcome and this time the Germans did it without firing a shot.
DNF (208255) — 7/13/2015 @ 4:37 pmBut the animal shelters will stay open, DNF.
nk (dbc370) — 7/13/2015 @ 4:39 pm28. I believe you’ve cornered the nub of the matter in there.
Sheeple nibbling there way far a field are torn to shreds at the end.
DNF (208255) — 7/13/2015 @ 4:58 pmpoor sheeples
happyfeet (831175) — 7/13/2015 @ 5:02 pmIt’s astonishing to me that a country one-third the size of California would get a $96 billion bailout! Of course there is more debt than that paltry amount.
But Jerry Brown and his ilk are probably thinking, oh, we have lots of time left to spend then!
Patricia (5fc097) — 7/13/2015 @ 6:45 pmThey’re going to wish they had voted YES last week.
askeptic (efcf22) — 7/13/2015 @ 7:22 pm32., what wold have been the point of a ‘yes’ vote? That deal was already expired.
Soronel Haetir (86a46e) — 7/13/2015 @ 8:59 pmThe nuns will still be making the best honey in the world near Kalambaka.
mg (31009b) — 7/13/2015 @ 11:10 pmIf the banksters have been stupid and reckless enough to lend money to Greece, and, in turn, the Greeks have been stupid and reckless enough to admire and embrace leftist-socialist policies and politicians, the two sides both deserve to go down with the ship. Glub, glub.
Mark (2857e5) — 7/13/2015 @ 11:37 pmMark, it’s only roughly $100 BILLION. Maybe Greece could BORROW it from SOLYNDRA.
Gus (7cc192) — 7/13/2015 @ 11:40 pmI wasn’t so sure about this agreement, kind of seemed to leave no way for Greece to get its huge debt problem down to a major debt problem.
Then I saw that Krugman wrote that this agreement was ‘madness’. That is enough for me.
seeRpea (187ee2) — 7/14/2015 @ 12:17 amGood deal – Greece deal with it. don’t blame the banks for lending you money on very good terms that you squandered on non-essentials. It would be more than fitting if you in fact did have to sell naming rights for the Parthenon , Oracle, etc
Vote for the most conservative in the primary, said Buckley. So sad that this line is never heard anymore. republicans do one thing well – they fall in line with the establishment GOP… and lose.
mg (31009b) — 7/14/2015 @ 2:40 am38. oops, i is tarded. wrong thread.
mg (31009b) — 7/14/2015 @ 2:51 amThe nose on your face:
http://www.zerohedge.com/news/2015-07-13/germany-just-killed-its-golden-goose
If you’ve been putting off that Italian vacay for a better exchange rate, this fall is probably too late, chump.
DNF (208255) — 7/14/2015 @ 3:59 amSeriously, the average Amerikkkan is an ignoramus. Who gives a sh!t what you think, it’s just been dictated to you by your pimp.
Tell me what you know.
DNF (208255) — 7/14/2015 @ 4:10 amCarpet bomb Germany every fifty years. If you don’t know why, they do.
nk (dbc370) — 7/14/2015 @ 4:49 amMr K asked:
It means a few things:
We are, in effect, making part of the Social Security payments from the general fund.
The Dana now eligible for Social Security (f6a568) — 7/14/2015 @ 5:02 amSo the IMF itself says the new plan raises Greek nolonger sovereign debt to 200% by 2020 and 350% by 2025.
IOW, they will not take part, propose immediate haircuts or multidecade moratorium.
DNF (208255) — 7/15/2015 @ 9:22 amTsipras never had a chance. The bureaucracy, put in by ND and PASOK, was not going to let him dry up their tit even if it means selling every inch of Greek land to the Germans. The kleptocrats also wanted breathing room to get their stolen cash out of Greece. They acted as agents and spies of the EU and helped the Troika ambush Tsipras every step of the way. The doof probably still doesn’t know what hit him.
nk (dbc370) — 7/15/2015 @ 5:27 pm{sigh} , the towel was soaked with gasoline.
seeRpea (5a0c4b) — 7/15/2015 @ 10:35 pm