It was so shortsighted and precocious to put the bailout terms to a referendum. It left them only the option to betray their people. If Greece was playing Poker, they had a 2-7 off suit and tried to bluff with it. Except that everyone knew they had a bad hand. Greece votes to play the hand they're given and they don't seem to realize that they have no play until they get home broke. What would you expect Tsipras to do (and how bad is it that the title of the article spells his name wrong) when his people are going to face economic collapse? He got home, sobered up, and realized he had made a really stupid mistake and that even though he doesn't like the terms that he has no better option. It's democracy. The Greeks put him in office. The Greeks voted to reject the bailout offer last week, and this is a different, although very similar, offer. Democracy fails all the time. Having the mass uninformed electorate making decisions and expecting that they vote to support themselves in the long-run at the cost of their short-run selves is a huge gamble. Tsipras thought he could get away with it, but they have a bad hand and Germany didn't even blink. Not even a week later and they're doing exactly what they should have last week. You don't get to buy and buy and buy and then skip out on the bill.
Agreed. I don't know why people see Greece as a victim. It is clear that austerity was too tough and the conditions of the bail-out should have been very different, but they still got bailed out when they were in deep trouble. Greece is better off that the IMF & ECB stepped in.
I knew someone deeply entrenched in financial logic would eventually show up and declare the coming sellout of the Greek people well justified. Bonus points for comparing someone who "buys buys buys" and eventually has to pay to the entirely different realm of state finance. Surprise, the banks are getting saved and public infrastructure is going to be sold to profiteers. Also, the people will bleed. Another fine day in Neolib-land.
So nice to always be able to rely on upright citizens explaining how it couldn't possibly be any other way! Well, thanks for pointing out the typo, I guess. I'm curious, since you asked. How bad was it? On a scale of 1 to 10, where 1 is "banks saved, poor eat dirt" (everything okay) and 10 is "Investors making less return on their investments" (Red alert, end of the world is imminent)?
In my view, being "deeply entrenched in financial logic" (as you put it) simply means having a basic understanding of how our financial system works. Whether we feel the current crisis is a "sellout" or take the stance that Greece is getting exactly what they deserve is beside the point. Markets are indifferent to such opinions - the trick is to learn how to navigate and make the most of the (admittedly) broken system we have. In that respect, I feel yellowoftops post is spot on. Tsipras never really had a choice. Is it fair that Greece is at the mercy of creditors today? Well, about as unfair as the cheap credit Greece received for no reason other than their initially joining the Euro. Is it fair that the current government is burdened by the past administration? Of course it is - government debt carries over, no matter which party is in power. That's just the way it works. So, yes - I can sympathise with the flood of news that's surely to continue coming about ordinary Greeks suffering. But blaming the "system", instead of the Greeks themselves, seems to me at least like blaming predatory lending for one's own poverty. The fact that no one forced Greece into the Euro makes this an issue of ignorance more than malice, and such ignorance is not wont to go unpunished.
So, yes - I can sympathise with the flood of news that's surely to continue coming about ordinary Greeks suffering. But blaming the "system", instead of the Greeks themselves, seems to me at least like blaming predatory lending for one's own poverty.
"Greeks" as in greek people not part of the elite had about as much say in what kind of debt their government took on as I have about which countries Germany sells its tanks to. It approaches zero. Strangely enough, I don't see any of those decision makers in any imminent danger of starvation or death by inavailability of medication. Is it fair that Greece is at the mercy of creditors today? Well, about as unfair as the cheap credit Greece received for no reason other than their initially joining the Euro.
Which was still a wildly profitable business for the financial entities involved. The same entities now having their losses socialized for a change. How utterly surprising a development that was. Markets are indifferent to such opinions - the trick is to learn how to navigate and make the most of the (admittedly) broken system we have.
In my opinion (which the markets are indeed indifferent to, as are their believers), the trick is not allowing markets and the broken system they represent to set the boundaries of reasonable discourse and appropriate action. Simply learning to "play the system" is a pretty conformist, if not reactionary proposal. one's own poverty.
Given the distribution of wealth and opportunity, the one-sidedness of public policy and the indeed predatorious business practices prevalent in today's markets, I can only be mystified by the continued insistence on variants of "Every man is the architect of his own fortune".
Hmm, you do have a valid point. Guess I was too caught up in defending "how the financial system works is logical" that I ignored your main point - that it is still far from being transparent or fair to the many, many regular folk caught by those decisions. I guess the financial and political elite in my country are doing a (reasonably) good job managing our system, which is why your argument didn't immediately appeal or make sense to me. Thanks for clarifying!
Greeks don't have a such thing as state finance. That's the whole fault of the Euro to begin with. It's absolutely absurd to have a monetary, but no political or fiscal, union. The ordinary rules of money printing don't work when the state isn't controlling their own money supply. I think if nothing else, this saga has really highlighted the shortcomings of the Euro, and shown it to be what it really was designed to be in the first place: a way for the strong economies of Europe to sell exports easier.Bonus points for comparing someone who "buys buys buys" and eventually has to pay to the entirely different realm of state finance.
It's not really like there's a lot of room for sovereign decisions left, is it? What can you do if you're handed control of the train in the middle of the trainwreck, long after the chance to change tracks or hit the breaks has passed? I'd simply expect everyone else to stop making things worse for profit and think about how casualties could be minimized. I can't believe how Merkel and Schäuble are acting (Except I can, really, because they are obviously acting in the interest of financial elites). We Germans, of all people, should realize that mistakes can be made. Germany would never have recovered if it wasn't for extensive debt forgiveness. One might argue that the sins of my country included slightly more serious transgressions than fiscal irrsponsibility. The Greek should work towards an orderly exit of the Euro zone and establishment of a national currency. Make it non-fiat while you're at it. All the "weak" countries should get out. In the interest of German people, as well. As long as the exports are rolling, I suspect our elites will continue to not give a crap about domestic demand. Wages and social policies reflect that.
You can be entrenched in in financial logic (which I don't think it is an insult to be logical) and still agree that making a monetary union without making a political one is a dangerous game. This is a post in which we were discussing that same idea the other day. However, fixed currencies don't work. They cause deflation when supply of one product constricts supply of money. If you were to work to offset that change and re-value money in new terms of gold, then you're not really bound to a standard anyway and you're working as a central bank. It was abandoned a long time ago because it doesn't work. Any standard (not just gold) should work the same way.
>vote to support themselves in the long-run at the cost of their short-run I wonder what the average Oxi voter imagined would happen if Greece left the euro, I can't imagine they would have thought that things would increase in the short-term.
They were voting against austerity, which cost them pension and social welfare benefits. Many who were voting against austerity likely also expected that their economy was being held back by austerity measures and wanted growth. They were voting to get growth and benefits.