Open Letter from Syriza Leader to German People

Generali

stator wrote: »

He's lying though. Renegotiating your debts requires the consent of the creditor. In the end he will be left with the option to default or not. I guess he will default and Greece will be thrown out of the Eurozone and he will blame the Germans.

There's no mechanism to allow that to happen.

As Bank of Greece is one of the companies that can print Euro, kicking them out would be implausible.

Thrugelmir

Generali wrote: »

As Bank of Greece is one of the companies that can print Euro, kicking them out would be implausible.

There's no provision in the Treaties to kick any member state out. The Greeks know that. Hence the tactic of making their problem someone elses as well.

wotsthat

Total Greek debt is just a few months of EU QE - peanuts.

This is politics rather than economics. If Germany and the rest have a problem with this maybe they should've studied a successful single currency to see how they work. Money like this is transferred through the Sterling zone and no one bats an eyelid or expects it to be repaid.

Not that I've much sympathy for the Greeks either.

LydiaJ

Thrugelmir wrote: »

The plan has to be fiscal unity. Standardised retirement ages, VAT rates, minimum wage etc etc. National Governments doing their own thing will never work. Both France and Italy require structural reforms of the labour markets.

Imposing standardised retirement ages, VAT rates, minimum wages etc would be a huge loss of sovereignty for a collection of theoretically democratic nations whose peoples don't appear to want it and have given no mandate for such political and fiscal union to take place, however much the unelected "elite" may think it desirable.

Look at Scotland. We share a common language, centuries of history of political union, vast numbers of intermarriages and interbreeding over generations, and STILL nearly half of them are so unhappy with having fiscal policy decided a few hundred miles away that they voted Yes just a few months ago. I don't see how anyone can really believe that there's any realistic prospect of the peoples of the EZ being happy with increasing the fiscal and political union among a group of countries with so very much less in common with each other than the English and Scots have.

Masomnia wrote: »

I think the problem is still that they see themselves as Greeks first and Europeans second, likewise the Germans see themselves as Germans first. As long as that's the case it just won't work, because the convergence of policy that is necessary either won't happen, or will face too much opposition and be stalled if implemented.

I agree that the question of how people perceive their identity is key to this. I think most people in Europe are a very long way from feeling European first and German or Greek or whatever second, whereas the federal union thing does work in the US because they DO think of themselves as American first and Texan or whatever second.

But the political "elite" have the cart before the horse. They are effectively saying "we want monetary union for economic purposes, so to make that work we need fiscal union, and for that we need political union, and that's only going to work if people perceive themselves as Europeans, so it's a problem that they don't see themselves that way." I think the problem is that the "elite" unrealistically expect the people to adapt to a change of identity that has been imposed on them from the outside.

stator

Graham_Devon wrote: »

What choice did the greek people actually have?

It's a bit like suggesting its the choice of the UK people to be in the EU.

How do we know though? We haven't had a say for nearly 40 years.

I don't believe Greek people got a say on any of the bailout loans or the terms of them.

That's democracy for you, you elect your politicians and they make your decisions. You can't just elect some different ones and expect to get out of all the contarcts the last lot signed though. If nation states weren't liable for any agreements they signed before the last election they would all be worthless and no-one would ever deal with a national government again.

Generali

stator wrote: »

That's democracy for you, you elect your politicians and they make your decisions. You can't just elect some different ones and expect to get out of all the contarcts the last lot signed though. If nation states weren't liable for any agreements they signed before the last election they would all be worthless and no-one would ever deal with a national government again.

Well actually you can. People vote in Governments to revoke the decisions of the last lot all the time.

Furthermore, the Greek Government now runs a primary surplus. The difference is that if it continues doing what the Troika demands, they will pay out 4-5% of GDP every year over the next 30 years. If they don't, then there is no problem to the Government at all. It doesn't need to borrow money any more.

Where the problem lies for the Government is that the ECB can, at the flick of a switch, destroy the Greek banking system. Greek banks, as banks do everywhere, rely on their Central Bank for short term funding. The Bank of Greece provides funding for Greek Banks and the ECB provides funding for the Bank of Greece. What doesn't help matters is that the Greek banking system is probably completely insolvent and being propped up by the ECB.

This is why the ECB hasn't included the Greek banks in their QE program. There is a chance that with QE driving up (fixed income) asset prices that the Greek Banking system becomes solvent again at which point the ECB loses its hold over Greece.

StevieJ

Thrugelmir wrote: »

Ingrained into culture. Parents to children. The after effects of the war also lasted many years.

Is that like their ingrained paranoid fear of inflation that has put the brakes on QE until now?

When Walter Baltes was five, he thought money always came in bundles of bank notes like those his grandmother hauled to the bakery to buy bread. It was 1923, in the town of Witten in Germany’s industrial heartland, and the Reichsbank was printing marks nonstop to pay reparations from World War I. “I am very careful with money, which probably has something to do with my experience,” says Baltes, 95. His frugality notwithstanding, he says these days he sees “absolutely no risk of inflation.”

http://www.bloomberg.com/bw/articles/2014-01-09/german-inflation-fears-fade-after-90-years

C_Mababejive

N1AK wrote: »

It's a good job you don't make use of any services provided, or funded, by government like roads, benefits, healthcare, rail travel etc because if you did then you'd look completely deluded...

Well we digress but i do indeed pay via my taxes and NI. I also pay for those who dont and indeed i suspect i overpay more than i use/consume.

That is not the same as being held responsible for national debt. That isnt my debt.

Thats why they set inflation targets. To ensure the continuance of profligacy, theft from the people and devaluation of debt in real terms.

TheBlueHorse

eventually there will be USE. In a year or five they will make everyone vote - and keep voting until they get a "yes" and then we'll never get a vote again.

Get out ASAP in my opinion. If we have to align with anyone, become the 51st state of the USA rather than be governed by these unelected, useless, corrupt, unaccountable faceless Brussels eurocrats ie Neil Kinnock.

God help us all.

C_Mababejive

Greece may well have a wobbly position in terms of domestic budget but even if they didnt have a penny to their name, they would still have sun,sea,wonderful beaches and mostly really nice, friendly people who still generally favour family values.