Cyprus-Forum.com

[Robin Hood]

The Greek people are getting screwed again! Their only way out is to dump the Euro and exit the EU …… only then will the Greeks regain control of their country.

Greece is Committing “Financial Suicide”

Thursday late night, 18 May 2017, the Greek Parliament voted to accept another round of devastating troika (EC, IMF, ECB) conditions for an additional debt package of close to 5 billion euros. All of the 153 delegates of Alexis Tsipras’ Syriza-Anel coalition voted ‘en bloc’ for the suicide package, all 128 opposition members against. Nineteen didn’t show up. Perhaps they were too afraid to vote for the opposition. Just as a reminder, PM Tsipras, a socialist, is leading Syriza, Greece’s prominent left-wing party, that for reasons of majority decided to align with the extreme right-wing party ‘Anel’ which currently holds a mere 10 seats in Parliament.

And another reminder- Alexis Tsipras, for the last two and a half years, since 26 January 2015, to be precise, has been selling his soul (if he has one), and more importantly, the country that trusted him, to the western crime oligarchs, i.e. the IMF, the European Commission, akin to the European (non-) Union and the Goldman Sachs-run European Central Bank – and Germany. James Petras calls him the Traitor of the year. This may be an understatement.

http://www.globalresearch.ca/greece-is-committing-financial-suicide/5591189

[Londonrake]

Varoufakis's book "Adults in the room" is an excellent read.

He gives a comprehensive insight into how the EU Commission and the likes of Merkel, Sarkozy (then) Lagarde and Germany's Schauble go about destroying anything that threatens the EU and particularly the Euro. I would like to think that everyone involved in the Brexit negotiations can recall it, chapter and verse.

[Robin Hood]

Varoufakis's book "Adults in the room" is an excellent read.

He gives a comprehensive insight into how the EU Commission and the likes of Merkel, Sarkozy (then) Lagarde and Germany's Schauble go about destroying anything that threatens the EU and particularly the Euro. I would like to think that everyone involved in the Brexit negotiations can recall it, chapter and verse.

You surprise me! I have not read the book but there were several articles at the time related to Varoufakis’s dealings with the Troika. He related that when he finished his first speech to La Garde and Co. they just sat there with blank looks, as if he had just given a lecture on quantum-physics ..... in brief, they didn’t have a clue what he was talking about. He was an economist talking to bankers and accountants and they knew nothing about economics and the creation of money only about banking, which is essentially an accounting system, and accounting.

If Tsipras had backed Varoufakis and faced off against the Troika, Greece would not be in the trouble it is today. It would now be outside the EU, debts cancelled legally as being ‘odious’ and with its own sovereign currency. Was Tsipras threatened with ‘consequences’ if he didn’t get rid of Varoufakis?

Personally, I find Varoufakis heavy going. He tends to drift off the main topic into references to Greek history and it makes his explanations rather long winded. If you are interested you can get a detailed explanation from Prof. Dr. Richard Werner as to how the system works and a more down to earth simple explanation from Steve Keen, an Australian Professor who is currently at LSE.

[repulsewarrior]

...indeed it is Greece which has shown the rest of Europe the cost of Solidarity, if and when it comes to them.

Imagine, Greece independent in its Foreign Policy; that has its good side, and its bad side.

...what happens in Greece, is a bad reflection on Europe if after this much effort to submit to its will a European solution fails dismally.

[Cap]

So?

Venezuela is in deeper sh**.
Mexico is in dire straits.

[Robin Hood]

...indeed it is Greece which has shown the rest of Europe the cost of Solidarity, if and when it comes to them.

Imagine, Greece independent in its Foreign Policy; that has its good side, and its bad side.

...what happens in Greece, is a bad reflection on Europe if after this much effort to submit to its will a European solution fails dismally.

But there was no solidarity! The richer countries should have assisted those with less efficient non-industrialised economies on the lines of a subsidy. They didn't do that.

Greece would have an independent foreign policy but they would still be members of NATO and would therefore still act according to NATO policy which is directed by the US. So little would change.

It was being in the Eurozone that caused their collapse, not being part of Europe. You can see this if you look at Poland. They still have their own currency and an independent central bank ..... they are not a branch office of the ECB. Their economy is booming apparently but their internal economy is all trading in the Zloty. (I am not sure this is tied to the Euro at the moment?)

As Varoufakis pointed out to the deaf ears of the Troika, you cannot lend money when you know the recipient cannot repay. it is odious debt and there is no requirement to repay odious debt because the lender was aware at the time of making the loan, that the recipient would default.

But what did the Troika do? Lend them even more money, most of which went straight back to the very same banks that made the loan! What did the Greeks get ..... more debt on which they had to pay interest .... and to pay the interest the Government takes money OUT of their economy to pay the banks? How in hells name have these ECB/IMF loans been of any benefit to Greece or the Greek economy; the Greek people have seen none of it.

Like any loan, when the borrower defaults the lender forecloses on the borrowers assets (collateral) ...... that is everything that is Greek, from the Acropolis to the Aegean Islands ..... what belonged to Greece now belongs to foreigners who bought the assets from the banks. Varoufakis found a way out of the problem but when Tsipras should have supported him ..... he did what he was told to do by the Troika and got rid of their problem for them. Just like Brexit the idea would have caught on and the German and French banks would be in the firing line. The EU/IMF/ECB could not possibly allow such a situation to arise.

[Londonrake]

You surprise me! I have not read the book but there were several articles at the time related to Varoufakis’s dealings with the Troika. He related that when he finished his first speech to La Garde and Co. they just sat there with blank looks, as if he had just given a lecture on quantum-physics ..... in brief, they didn’t have a clue what he was talking about. He was an economist talking to bankers and accountants and they knew nothing about economics and the creation of money only about banking, which is essentially an accounting system, and accounting.

I read that differently to you. It seemed clear to me that Varoufakis is very narcissistic. Witness the way he cultivated his "rock star" image at the time.

To be in a meeting of that sort of importance and waste the opportunity by pleading your case at an inappropriate level, whist it might be self-serving to his ego, seems a complete waste. Lagarde for instance is neither a banker nor accountant, she's a lawyer that moved into politics (now, there's a novelty! ). TBH, I think it makes Varoufakis look more the fool than his audience.

My interest is in his explanation of the tactics and methodology of high-level EU negotiators. FWIW his "advice" to HMG was simple - don't negotiate. Whilst that seems unrealistically extreme he makes a valid point on what you can expect.

[supporttheunderdog]

Greece Committed financial suicide years ago: now she is on a life support machine of bail-outs and possible debt relief, though at least one analyst writing in the Greek Press indicated that debt relief is not the answer - see http://www.ekathimerini.com/218604/opinion/ekathimerini/comment/debt-relief-is-not-the-solution-for-greece

On the cause of the Crises this is one analysis which meets the test of Occam's razor that (in my view) many conspiracy theories about a deliberate plot to bankrupt Greece do not.

http://www.educationworld.com/a_lesson/explaining-the-greek-economic-crisis-with-students.shtml

The Greek financial trouble started decades ago when government after government increased the size of the country’s payroll. A “you scratch my back…” system rewarded supporters of the two biggest political parties with government jobs. This practice eventually led to a Greece where one in five citizens of working age held a government job.

At one point politicians stopped offering so many government jobs and instead began handing out raises to those already working for the government. This, coupled with notoriously poor tax collection enforcement, had Greece scrambling to keep the money flowing.

The country turned to its neighbors and began to borrow. The lenders offered money with little question, because as a member of the European Union, Greece was required to adhere to strict financial restrictions including not allowing its national budget deficit to exceed 3 percent of its economic output. Greece’s debt soared, but no one was concerned because the Greek government continued to report a national deficit of 3.4 percent.

The final blow was struck with the election of a new government that discovered the country’s financial books had been “cooked” for years. The 3.4 percent deficit was a lie, and Greece was really operating on a national deficit of just over 15 percent. This revelation, coupled with the demise of Lehman Brothers Holdings—a New York City-based investment bank—in 2008 and the worldwide economic crisis that followed, led Greece’s lenders to enact stricter borrowing rules. The country’s borrowing costs skyrocketed, and in an instant, it became impossible for Greece to repay its debt without taking further loans.

That is however only a part of the story - It does not help that
(1) there is widespread tax evasion - people simply not paying (as opposed to avoidance which is exploiting the rules to minimise payments) - by some estimates the black economy is 25% of the economy meaning 25% of income possibly subject to tax is just not reported, and unassessed tax amounts to Eur 20 Billion per year, or so.
In addition of taxes assessed as due, figures from Jan 2017 show that 4.3 million taxpayers (about 50%) have accrued debts in excess of 94 billion euros, on taxes actually levied. Currently only 40% of tax is being collected.
Collecting even some of that money would help solve the Government debt crisis.
(2) there is a balance of payments crises - see http://www.tradingeconomics.com/greece/balance-of-trade

Greece's trade deficit widened sharply to €2.14 billion in March 2017 from €1.57 billion in the same month a year earlier. Imports jumped 30.2 percent to €4.78 billion, as purchases went up 55.8 percent from countries outside the EU and 12.3 percent from EU countries. Meanwhile, exports rose at slower rate of 25.7 percent to €2.63 billion as sales to countries outside the EU advanced 37.2 percent and those to the EU grew 17.7 percent. In the first quarter of the year, the trade gap widened to €6.48 billion from €4.47 billion in the same period of 2016, as imports increased by 31 percent and exports by 20.3 percent.

Official recent information can be found here http://www.bankofgreece.gr/Pages/en/Bank/News/PressReleases/DispItem.aspx?Item_ID=5721&List_ID=1af869f3-57fb-4de6-b9ae-bdfd83c66c95&Filter_by=DT

Greece sadly does not have a wealth generating economy to sustain spending.

An older research paper here highlights the long term problems of trying to start and run a business
https://poseidon01.ssrn.com/mwg-internal/de5fs23hu73ds/progress?id=o29UWPWo9tLMnNJaNdlg1kIW7s6HUE_4uxc7o7rRTp4,&dl

In a research carried out by the World Bank on 2008, about the ease of starting a business, Greece was in the last position among 58 countries. On the same research for 2011, it was in the 101th position from 183 countries. This research evaluated the ease of starting a business based on the following aspects: Starting a Business,Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Investors, Paying Taxes, and Trading across Borders, Enforcing Contracts and Resolving Insolvency.

The OECD (2011) has carried out research on a relative topic, that of administrative burdens on start-ups. Administrative burdens on startups measure a country’s regulatory environment. They are calculated by using three main indicators: state control, barriers to entrepreneurship and barriers to trade and investment..... Greece, along with Hungary, were evaluated to be the countries with the most administrative burdens on startups, scoring 2.6 and 2.8 respectively.

As that document concludes, among other suggestions including balancing the government books and debt relief,

There is a need to create a completely new framework for business start up and operation. The current framework is suffocating for the market and for the economy is general.
There is a need to increase the production value of the primary sector of the economy.
There is an urgent need to strengthen domestic industrial production. This can be achieved in two ways: firstly by creating a hospitable environment for business
investments and secondly by proceeding in joint ventures with foreign industrial firms. These firms should be attracted with free allocation, low tax rates and low cost
electricity, gas and water supply.
Finally there is a need to balance the country’s imports and exports, and make the balance positive if possible.
The design and application of these policies can strengthen the country’s economy and allow it to grow through time.

Not sure any of this has yet been addressed.

[Robin Hood]

You surprise me! I have not read the book but there were several articles at the time related to Varoufakis’s dealings with the Troika. He related that when he finished his first speech to La Garde and Co. they just sat there with blank looks, as if he had just given a lecture on quantum-physics ..... in brief, they didn’t have a clue what he was talking about. He was an economist talking to bankers and accountants and they knew nothing about economics and the creation of money only about banking, which is essentially an accounting system, and accounting.

I read that differently to you. It seemed clear to me that Varoufakis is very narcissistic. Witness the way he cultivated his "rock star" image at the time.

To be in a meeting of that sort of importance and waste the opportunity by pleading your case at an inappropriate level, whist it might be self-serving to his ego, seems a complete waste. Lagarde for instance is neither a banker nor accountant, she's a lawyer that moved into politics (now, there's a novelty! ). TBH, I think it makes Varoufakis look more the fool than his audience.

My interest is in his explanation of the tactics and methodology of high-level EU negotiators. FWIW his "advice" to HMG was simple - don't negotiate. Whilst that seems unrealistically extreme he makes a valid point on what you can expect.

As you so frequently do with me, you are allowing your opinion of his personality to get in the way of his message. Yes ..... he is bloody arrogant but his advice is in the main sound. That is why the Troika needed to shut him up!

[Londonrake]

You surprise me! I have not read the book but there were several articles at the time related to Varoufakis’s dealings with the Troika. He related that when he finished his first speech to La Garde and Co. they just sat there with blank looks, as if he had just given a lecture on quantum-physics ..... in brief, they didn’t have a clue what he was talking about. He was an economist talking to bankers and accountants and they knew nothing about economics and the creation of money only about banking, which is essentially an accounting system, and accounting.

I read that differently to you. It seemed clear to me that Varoufakis is very narcissistic. Witness the way he cultivated his "rock star" image at the time.

To be in a meeting of that sort of importance and waste the opportunity by pleading your case at an inappropriate level, whist it might be self-serving to his ego, seems a complete waste. Lagarde for instance is neither a banker nor accountant, she's a lawyer that moved into politics (now, there's a novelty! ). TBH, I think it makes Varoufakis look more the fool than his audience.

My interest is in his explanation of the tactics and methodology of high-level EU negotiators. FWIW his "advice" to HMG was simple - don't negotiate. Whilst that seems unrealistically extreme he makes a valid point on what you can expect.

As you so frequently do with me, you are allowing your opinion of his personality to get in the way of his message. Yes ..... he is bloody arrogant but his advice is in the main sound. That is why the Troika needed to shut him up!

Not really. It seemed a regular thing. Varoufakis, dressed like Elton John, a bimbo on each arm, corner table in a very exclusive nightclub. Paparazzi fighting on the pavement outside at 2am. Varoufakis on chat shows. He's certainly no shy recluse