Greece...

westernpromise

worldtraveller wrote: »

The IMF wants eurozone countries to accept long delays in the repayment of Greece’s bailout loans, which would fall due in the period from 2040 to 2080 under the proposal, according to officials familiar with the talks.

Amusingly, under the Versailles Treaty of 1919. German reparations for WW1 were scheduled to run until 1988. Germany ultimately did not, er, keep up the repayments.

Here we are again, 100 years on, with another 5hitload of debt scheduled to take until the 80s to pay off. But this time Germany is the payee, not the payer! If the Greeks decide to pay nothing then welsh on the whole lot in a few years' time, what could the Germans say, really?!

If Greece starts raising panzer divisions soon we will know that history may not repeat but it sure does rhyme...

Generali

Apropos of nothing they interviewed that nice Mr Varafoukis on the radio over here today (he works in Sydney). It was very interesting.

The most interesting part was when he was asked about the difference between being an economics professor, his job in Sydney, and a co-opted minister holding the levers of power.

1. "Never underestimate the mendacity of politicians. Whatever you believe they are almost certainly worse".
2. "It was amazing. There were a large group of people that for the most part meant well and who were rational however the decisions that came out of that group were wholly irrational and that has had a devastating impact on millions".

mwpt

I'd like to listen to that to understand the context. Is point 2 a general point or is he referring to a specific group, eg. Syriza?

For me I become very fascinated with the Greek situation when they elected Syriza with a mandate to end austerity. I believe I posted my views here at the time, which were something like "you can't just end austerity by demanding the market gives you what you want".

I wanted to see how it played out and if this view was correct (it was).

The Greek situation I think illustrates very well what I consider a major problem in the world. Debt, which as a concept is great, a way of allowing savers to meet borrowers to the mutual benefit of both through increased productivity, has become something else. I don't even know how or what to call it but it is a monster.

We have left wing Keynesian politics framed around the original good concept of debt to spark growth but following that ideal in a truly religious fundamentalist manner. I've seen left wing armchair economists often posting that we don't need austerity because we have our own central bank. As if there is this free lunch available to every nation with their own central bank, just waiting to be used, but somehow governments are just fundamentally nasty and prefer their people to suffer.

kabayiri

There are more billionaires in the world now than at any time, so we are told.

How much would a sell off of a few Greek islands raise? I'm referring to the ones which still have value, not migrant hopping points like Lesbos.

Give the Greek government an option to buy these places back at a good market rate in 50 or a 100 years time.

michaels

mwpt wrote: »

I'd like to listen to that to understand the context. Is point 2 a general point or is he referring to a specific group, eg. Syriza?

For me I become very fascinated with the Greek situation when they elected Syriza with a mandate to end austerity. I believe I posted my views here at the time, which were something like "you can't just end austerity by demanding the market gives you what you want".

I wanted to see how it played out and if this view was correct (it was).

The Greek situation I think illustrates very well what I consider a major problem in the world. Debt, which as a concept is great, a way of allowing savers to meet borrowers to the mutual benefit of both through increased productivity, has become something else. I don't even know how or what to call it but it is a monster.

We have left wing Keynesian politics framed around the original good concept of debt to spark growth but following that ideal in a truly religious fundamentalist manner. I've seen left wing armchair economists often posting that we don't need austerity because we have our own central bank. As if there is this free lunch available to every nation with their own central bank, just waiting to be used, but somehow governments are just fundamentally nasty and prefer their people to suffer.

Doesn't classical economics have a desire to save and a desire to invest brought into equilibrium by a price (rate of interest). Note this does not really cover borrowing to spend. Borrowing to invest in theory the investment makes positve returns large enough to repay the principal and interest. Borrowing to spend does not include the same thing, instead the money borrowed is spent on consumption and their is no capital good that could be sold to repay the loan notr income stream to repay the interest.

CLAPTON

Generali wrote: »

Apropos of nothing they interviewed that nice Mr Varafoukis on the radio over here today (he works in Sydney). It was very interesting.

The most interesting part was when he was asked about the difference between being an economics professor, his job in Sydney, and a co-opted minister holding the levers of power.

1. "Never underestimate the mendacity of politicians. Whatever you believe they are almost certainly worse".
2. "It was amazing. There were a large group of people that for the most part meant well and who were rational however the decisions that came out of that group were wholly irrational and that has had a devastating impact on millions".

did he actually say what he would have done?

worldtraveller

Greece will receive its second injection of rescue money under its €86bn bailout programme after European creditors signed off on a €7.5bn disbursement on Friday.

Passing its final hurdle to secure the cash, the board of directors of the European Stability Mechanism approved the loan release, which will be the country’s first injection of bailout money since late 2015.

The funds will ensure the country does not default on its creditors when €3.35bn of debt matures in July and can stay solvent until the end of the year. A further €2.8bn will be granted to Athens if it passes its next stage of reforms by the autumn.

The cash will be used to pay off creditors and pay Athens’ domestic arrears, which have hit €6.7bn this year.

In total, the eurozone’s rescue funds have disbursed €170.7bn to the country.

FT

Next!

vivatifosi

Today is the day that the EU and IMF creditors meet in Greece to review the 3rd bailout.

Meanwhile, the Bruegel institute is saying that the Greek economy will need a fourth bailout in 2018 as it won't be able to raise funds from the markets when the current bailout expires:

https://www.theguardian.com/world/2016/oct/16/eu-and-imf-auditors-to-visit-athens-as-greeces-agony-continues

worldtraveller

vivatifosi wrote: »

Meanwhile, the Bruegel institute is saying that the Greek economy will need a fourth bailout in 2018...

Surely not?! :rotfl:

Froggitt

http://www.telegraph.co.uk/business/2016/10/16/euro-house-of-cards-to-collapse-warns-ecb-prophet/