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Why A Third Greek Bailout Is A Bad Idea
Submitted by Pieter Cleppe via VocalInternational.com,
Last Sunday, Eurozone countries submitted yet another ultimatum to Greece: implement a whole round of reforms, from eliminating early retirement over scrapping exemptions from sales tax to opening shops on Sunday, and we’ll start negotiations on providing a new bailout of possibly €86bn from the European Stability Mechanism (ESM), the Eurozone’s bailout scheme, which will carry yet another series of strings attached. Here are four reasons why this whole thing is just a bad idea.
- The previous two bailouts have failed. Why try more of the same?
Today, Greek debt to GDP has reached 180%, an all time high. It should come as no surprised that an overindebted country’s economy will shrink when it is being burdened with even more debt. This happened from 2010 on, when the country received “emergency loans” amounting to an estimated 240 billion euro, both from Eurozone countries and the IMF. At the instigation of former French IMF chief Dominique Strauss-Kahn, the IMF violated its own principles by not allowing Greece to default on major international banks before granting it a loan. It now is facing heavy losses, after Greece has already defaulted twice on an IMF payment now or is “in arrears”, in IMF-lingo. Also the “no-bailout rule” in the EU Treaty was violated.
It’s true that this therefore was a bailout of major international banks who had been lending to Greece, as we have pointed out back then with Open Europe. Still also Greece profited, as someone else really paid back part of the funds which they had been enjoying previously.
Greece hasn’t properly implemented all the measures it promised take. The IMF has stated that “only 5 of 12 planned IMF reviews under the current program were completed, and only one has been completed since mid-2013, because of the failure to implement reforms”. Greece did restore some competitiveness, but would probably have benefited more if it had reformed more. Still, many of the measures from these bailout programmes, including the newly proposed one, involve tax hikes. How this can drive economic growth in a country already crippled with debt is anyone’s guess.
- It’s toxic to intervene deeply into the political decisions of another country
Greece was never really forced to join the euro, given that it didn’t comply with the entry requirements in the first place. It is also free to leave the Eurozone, as the newly proposed deal for Greece looks like an invitation for the country to do so. Isn’t then all the criticism towards Germany and the other Eurozone states of having the temerity to attach some strings to providing another €86bn in taxpayers’ money a bit rich?
Yes it is, and we should also blame the Greek government for inviting foreign intervention by applying for yet another bailout, but that doesn’t take away the fact that this is the recipe for radicalizing public opinion. When a large majority of Greeks, 61%, rejects a set of conditions attached to a possible new bailout in a referendum, surely should rather be not to seek a new bailout, and seek Grexit, instead of seeking one with even more stringent proposals? Former Greek Finance Minister Yanis Varoufakis has warned that the Greek fascist “Golden Dawn” party could “inherit the mantle of the anti-austerity drive, tragically”, now that the hard left Syriza formation has basically backed down to foreign demands. We shouldn’t ignore this danger.
- More transfers and common Eurozone decision making leads to conflict
Whereas until now the Greek crisis mainly soured relations between Germany and Greece, luckily mostly between its politicians and media, it has now lead to an open split between Germany and France, with the latter pushing for more money for Greece and the former openly suggesting “Grexit”. A country like Belgium, infamous for its tensions between the Germanic and Francophone part of the country, which only four years ago led to the inability to form a new federal government for one and a half year, should be sufficient proof that a lack of common “public opinion”, “demos” or “culture” can hugely complicate and even toxify decision making.
Regardless of whether the more “ordoliberal” Germanics or the “socialist” Southern Europeans are right or wrong: given the intensity of the criticism of the conditions suggested by Germany for the new Greek bailout, one can only wonder how big the tensions would be in case the Eurozone would further centralize power and increase the size of the transfers. Still the so-called Five Presidents’ Report” written by the heads of the EU institutions is proposing just that. You wouldn’t expect them to suggest anything else, but does this make sense to anyone outside of the EU bubble?
- Propping up the Eurozone endangers the EU
The Franco-German tensions we’re witnessing are very problematic. The EU really is built on a grand diplomatic deal between these two countries and the core of the EU project really is about reducing trade barriers, thereby securing lasting peace through trade in Europe. Everything else the EU has undertaken depends on the legitimacy it has obtained due to the success of removing trade barriers: from good projects, as the passport- free zone Schengen or the free movement of people, to questionable projects, as the common currency, the ever growing set of burdensome regulations or the wasteful 1 trillion euro EU Budget, to vanity projects, as the invisible EU Diplomatic Service. Now the most unsuccessful side-project of the EU, the common currency, may one day trouble the EU. EU-critical protest parties managed to gain almost one third of the vote in least year’s EP elections, up from only one fifth in 2009. Apart from perhaps migration, the euro has without much doubt been the prominent factor in their success.
As Finland’s Foreign Minister Timo Soini said this week about the idea of a third Greek bailout round: “the Finnish public can’t understand that this is allowed to continue”.
Can anyone else?
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Dr Strangelove and His Reptilian Bride don't want to face a Deutschebanke meltdown at Home.
Better it take place in the Aegean for cheaper Mercedes employee vacations.
They can always wear wife beaters with Austrian flags.
The Cabalist dynasty families that own the central banks and dominate industry, culture, our relaitionships, movements and revolutions, and government just doing what they believe is their divine right to do - enslaving us all.
.
Now what?
Key words here are "Golden Dawn", they are going to push this country to open Fascism. And if those Fascist succeed in turning the country around watch it spread like wild fire.
Loudspeaker announcement:
Herr Tsipras, report for duty to the Bundestag’s janitor closet. ;-)
Schnell! (germ.- quickly)
Looney
That's it, I am going to become a contributor dammit.
First article:
'Why slamming your nuts in a drawer is a bad idea."
pods
"Why a third Greek bailout is a bad idea"
Uhhhh, the same reason the first two were a bad idea?
The same reason EVERY BAILOUT EVER has been a bad idea?
What do I win?
Does anyone know if ZeroHedge is hiring?
.
Where do i drop off my resume and covering letter?
They come to you not the other way around.
accepted and hired, now go get me a cup of coffee would ya?
Can we get one more article covering Greece? Please? Just one more...really................................
plenty of old European petty royalty and Anglo banksters in the mix too.
As Finland’s Foreign Minister Timo Soini said
Mr. 1.8% of the EU GDP, namely Finland's FM, should be granted 1.8% of the total words that all EU FM's say.
It couldn't be easier to understand: endless bailouts, more money-printing, doesn't matter if it succeeds or not. Ideology and political arrogance come first.
After calling neighbor ‘terrorist’, Hispanic man faces civil rights charges
http://tinyurl.com/qj9uhn5
this has nothing to do with greece. greece is just the conduit for bankers to transfer money from taxpayers to.....bankers holding greek debt.
Must be a White Hispanic as opposed to the other kind.
Politicians are the bane of the State.
Hang them all.
Throw in the bankers and lawyers while you're at it.
Tsipras is a traitor to his people and all democracies worldwide. He should be hung for treason.
Bankers should be shot for sport. Like fish in a barrel, the fat little fishies.
BLAM BLAM BLAM!
:)
Ya mas, mo fo's!
Can we talk about why the first bail out was a bad idea?
Yeah, we're in the territory of incredibly stupid now, but Euro crack is just sooo tasty......
Tsipras loves him some Merkle butt crack, that's for damn sure.
Put a little mustard on those buns and lap it up!
359 Billion Euros in Greek debt leveraged 100X by Germany and the ECB = 35.9 Trillion in Greek Exposure.
You can give my Noble Prize money to the childern.
#41
I'll take your 100X leverage and rehypothicate it 100 more times.
What's the figure now, laureate?
:)
Alfie will be welling up in his grave at your generous offer. Barry's holding on tightly to his well deserved/earned gong by cutting this calendar year's drone take-out by 10%.
Democracy vs neo-feudal order. State and balance of private vs public based on elected vs Oligarchy private domination based on the hyper rich of private sector; aka divine rights and vertical society where the serfs have NO rights like in Greece today. We've been here before and this is called civilization REGRESSION.
That's the choice. If Finland is for neo-feudal reversion then pull the plug on democracy and solidarity. As for causality, aka why we are here; its ALL about the private financial sector of NWO OLigarchy of USA imposing their vision on the whole world.
Europe goes back to feudal times. The Finns should know what that means; as they are surrounded by bigger nations than themselves.
Nationalism is what destroyed Europe since beginning of 20th century. And before that is was : to the victors the spoils!
This regression is destroying not only the two revolutions that liberated the west, the US and the French, its destroying the value systems that inspired those revolutions : The Enlightenment.
Jesus sufferin' Christ.
The only thing the French Revolution liberated was a whole lot of heads from their bodies.
If there was ever a revolution that was a total failure it was that one.
Then they double down with Stumpy the Corsican.
I'd rank Somalia with a higher success ratio than France.
Well as an American, you don't know the history of your own country and what the French did to contribute to it; including BONEY who sold you the Louisiana territory for a song...
The french cut off much fewer heads during the revolution than the Americans cut off Indian heads to cleanse their nation...just saying.
Sheridan's ride down south then went West and "the only Injun was a dead Injun".
I don't defend the Terror I just contextualise it. It was not a TOTAL failure far from it. It got rid of divine rights.
But it took a hundred years too long. And it unfortunately got caught into the Colonial song to do to "those pesky natives" what those natives NEVER did to the Colonials. Some expression of double values, that tainted all european nations and laid the foundations of WW1 : nobody wanted to share lebensraum with the gorilla of Bismarckian Germany!
Spot on, nail on the head. Greets from Belgium :-)
These guys should read Stefan Zweig's poignant autobiography of that 19/20th century about turn : The World of Yesterday.
It should be a good pointer for whats up ahead; when Pax Americana morphs just as Pax Britannica world (the Congress of Vienna balance of power) morphed in Zweig's youth. History rhymes.
I'm surprised fickle Finland can't understand. Troika creditors want paying.
SoL.
Normal recovery in a fire sale is 10%.
????? ???? ????? ??? ??????? , ???? ?? ?????????? ??? ?? ????????? ?? ????? ??? ??? ????? ???? !
tríti? forá eínai mia goi?teía , ó?ste na procho?rí?sei kai na klo?tsí?sei to koutí gia mia akómi? forá !
According to GOOGLE, this means:
[third time is a charm, so go ahead and kick the can one more time!]
But, then there's this:
?? ?????? ??? ???????????? ????? ?? ???? ?????? ???? ??? ?? ?????????? ??????????? ???????????? .
To si?mádi ti?s parafrosýni?s eínai to ídio prágma xaná kai na periméneis diaforetiká apotelésmata .
[The sign of insanity is to to the same thing over and expect different results.]
I suppose I would've been shocked ... SHOCKED if that Greek font actually came out properly.
Please, can you stop asking questions? ha-ha.
Can't pay your bills or budget your finances?
Obviously more DEBT will fix that.
I don't care what the big brains at the Fed claim, these universal debt-slaver problems will cascade.
Cyprus, Greece, ...., ...., America.
It doesn't matter.
These characters at these "enlightened" institutions will only capitalize on more mayhem, more chaos, more extra-legal fun and games to insulate themselves from malfeasance and other criminal problems.
If there would be any justice in this mess it would end with these banksters and their families at the bottom of the oceans.
This was understood some time ago:
http://41.media.tumblr.com/6fb3b3ead6f1a988b5d9a168a94c996a/tumblr_nrjli...
Reality is Greece doesn't get all the money at once. It will be drip fed to them providing they continue to meet the conditions.
Likelihood of Greece continuing to meet the conditions for more than a year? Near zero?
They should have made it like this from the very beginning.
IT DOESN'T HAVE TO MAKE SENSE!
WE'RE KEEPING THE EURO DREAM ALIVE!
You know you are in trouble when an ex eastern block country lambasts you for fiscal irresponsibility....
The patient (Greeks) is in ICU and wants to die. The doctor (Troika) keeps applying artificial life support. The patient is made to go in a (debt) coma rather than be allowed to die with dignity. The doctor ignores all vital (economic) signs and states to the family “..we can bring this patient back to being a productive citizen once the coma is lifted..” But the family (EU members) look at one another and one finally says “…how will they ever be productive again when their arms and legs have been severed...”…
Germany, of all countries, should know the consequences of failing to provide debt forgiveness where due. Of course it does, but it's a banker-controlled government that propped up major private banks by socializing the distressed Greek bonds they held at face value.
.
.
Well, of course it's a bad idea.
Why then, would the Greeks want it?!
Does a corrupt, addled addict know what's best for himself?
Somewhere in this whole mess is the seldom mentioned power and influence of the Greek Military.
No where have I seen cuts to the proportionally huge military budget, why???
An unpaid army who are used to being lavishly paid and enjoying all the perks wouldn't be too happy to have some junior politician interfere with their scam so perhaps it wasn't just the EU that was pointing a gun to Tsipras head
It's a bad idea cause it guarantees that there will be a FOURTH, FIFTH and SIXTH bailout.
"...61%, rejects a set of conditions attached to a possible new bailout in a referendum, surely should rather be not to seek a new bailout, and seek Grexit"
Yeahbut, the Greek people also do not wish to leave the Euro.
The two demands created a virtually impossible contradiction for the government to satisfy, hence Tsipras went ahead anyway with a new bail-out to avoid the risk of going down in history as the PM who crashed Greece.
I took a Tsipras this morning
Citation: "Greece was never really forced to join the euro, given that it didn’t comply with the entry requirements in the first place. It is also free to leave the Eurozone, as the newly proposed deal for Greece looks like an invitation for the country to do so. Isn’t then all the criticism towards Germany and the other Eurozone states of having the temerity to attach some strings to providing another €86bn in taxpayers’ money a bit rich?
Yes it is, and we should also blame the Greek government for inviting foreign intervention by applying for yet another bailout, but that doesn’t take away the fact that this is the recipe for radicalizing public opinion. When a large majority of Greeks, 61%, rejects a set of conditions attached to a possible new bailout in a referendum, surely should rather be not to seek a new bailout, and seek Grexit, instead of seeking one with even more stringent proposals?"
This is exactly the way German taxpayers think - they don't understand why they are attacked and insulted by the Greek for borrowing (...in reality giving...) far more than hundred billion Euro.
It's absolutely curios: Pleading for money like junkies and on the other hand condemning the Germans for posing some logical conditions, rejecting them. It's another mentality, a cleptocratic culture far away from Europe.
Somebody did not learn his lesson from the previous two bailouts.
To Pieter Cleppe,
Before you write anything you should get your facts straight, either you are very ignorant, or just another lying lawyer.
1 The previous two bailouts have failed. Why try more of the same?
Today, Greek debt to GDP has reached 180%, an all time high. It should come as no surprised that an overindebted country’s economy will shrink when it is being burdened with even more debt.
Cold-Pragmatism: What a load of rubbish. Take a look at Greeks GDP PER CAPITA, it is 40% of Germany's, and barely 50% of France's. If Greece bothered to develop their economy, their debt load would be less tjam 80% of GDP with their present amounts of debts. They wouldn't be in trouble at all. Greece's problem is that it squandered the money they borrowed on frivolous pensions that had no return value!
Greece hasn’t properly implemented all the measures it promised take. The IMF has stated that “only 5 of 12 planned IMF reviews under the current program were completed, and only one has been completed since mid-2013, because of the failure to implement reforms”. Greece did restore some competitiveness, but would probably have benefited more if it had reformed more. Still, many of the measures from these bailout programmes, including the newly proposed one, involve tax hikes. How this can drive economic growth in a country already crippled with debt is anyone’s guess.
Cold-Pragmatism: Very simple. They can start competing with other countries, they can cut their outrageous pensions and salaries, and start manufacturing products that cost cheaper than say in Germany! The country IS NOT CRIPPLED WITH DEBTS, THE ONLY THING CRIPPLING GREECE IS THEIR INCENTIVE TO WORK AND COMPETE IN THE MARKET! Debt / GDP is a fraction with a numerator and denominator, why is it you socialistic idiots keep focusing on the numerator, when the whole problem is the denominator! As for a tax hit, YOU IDIOT, they don't pay taxes, of course it is a tax hit considering it is being raised from 0% or from close to it. They are only going start paying tax rates like everybody else in Europe, they are not paying taxes any higher than anyone else. Hell, their tax rates for businesses are still going to be 20 percentage points less than Italy. Their personal tax rates will still be lower than anywhere else in Europe! Their VAT is going up to 13 to 23%, like in many other countries! You damn fool! Of course taxes have to go up, how else are they going to pay for their debts and pensions!
2. It’s toxic to intervene deeply into the political decisions of another country
Greece was never really forced to join the euro, given that it didn’t comply with the entry requirements in the first place.
Cold-Pragmatism: Greece demanded to join the euro, and guess who supported this? France, Italy, Spain, and Italy, you know all the usual suspects, why don't you target that! These countries also don't comply with the entry requirements.
When a large majority of Greeks, 61%, rejects a set of conditions attached to a possible new bailout in a referendum, surely should rather be not to seek a new bailout, and seek Grexit, instead of seeking one with even more stringent proposals?
Cold-Pragmatism: Get things in perspective. Only 53% of the country voted, that means ONLY 32% were against the bailout. That means 68% of the population were either for it, or didn't care enough about it to vote for.
3. More transfers and common Eurozone decision making leads to conflict
A country like Belgium, infamous for its tensions between the Germanic and Francophone part of the country, which only four years ago led to the inability to form a new federal government for one and a half year, should be sufficient proof that a lack of common “public opinion”, “demos” or “culture” can hugely complicate and even toxify decision making.
Cold-Pragmatism: You ought to be ashamed of yourself! Inciting division where non exists. There is NO MAJOR issue between the Germanic and Francophone populace in Belgium. The tension is between the Francophone and Flemish (i.e. Dutch). Why are you making this a French/German thing? This is disgraceful behaviour! Furthermore, has Belgium learned yet how to make a government? At least Greece has a government as bad as it is, but Belgium couldn't even get one together! You of all people should talk!
Regardless of whether the more “ordoliberal” Germanics or the “socialist” Southern Europeans are right or wrong: given the intensity of the criticism of the conditions suggested by Germany for the new Greek bailout, one can only wonder how big the tensions would be in case the Eurozone would further centralize power and increase the size of the transfers. Still the so-called Five Presidents’ Report” written by the heads of the EU institutions is proposing just that. You wouldn’t expect them to suggest anything else, but does this make sense to anyone outside of the EU bubble?
Cold-Pragmatism: Speak plainly, lawyer talk is not required. The issue is why should the responsible governments who are following austerity and improving their economies should subsidize the communist countries (they are communist not socialists, learn the difference) for being reckless with their economies? To answer your question, the whole world understands that, if you speak plainly and not in nebulous forms!
The Franco-German tensions we’re witnessing are very problematic. The EU really is built on a grand diplomatic deal between these two countries and the core of the EU project really is about reducing trade barriers, thereby securing lasting peace through trade in Europe.
Cold-Pragmatism: And yet only Germany, Neatherlands, Latvia, Estonia, Lithuania, Finland and a few others have been implementing reforms to allow better integration. While France, Italy, Spain, and Greece have been rigging their labor markets, their product markets, blocking competition and making it very hard for other countries to enter their markets in general. For instance, take and look at France and their agricultural policy, its a mess. The problem is one group of nations are doing what the EU project was suposed to be all about, and another group, the Southern nations are looking at welching out. The problem here is only France, Spain, Italy and Greece.
As Finland’s Foreign Minister Timo Soini said this week about the idea of a third Greek bailout round: “the Finnish public can’t understand that this is allowed to continue”.
Can anyone else?
Cold-Pragmatism: Yes, the French, Spanish, Italians and Greeks, do. That's the problem!
--------------------------------
For a Belgian, you write a lot, and say very little. And what you do say, is poor and misdirectional. This is the real problem in Europe, too many people like you who don't target the issues correctly. Spending tax payers money for useless drivel. We have serious problems in Europe, and people like you want to put the finger on countries like Germany, or at least make Germany share in the blame. What have they done? They reformed their country, and worked hard! Why can't people like you target the real problem, French arrogance and intrasigence, Italian incompetence, Spanish ignornance, Greek laziness and their collective communist philosophy to prey on the richer so they don't have to do anything. Germany is successful....good for them. Its up to the rest of us to compete with them! Not point a finger to them.
Stop writing like a socialist and thinking like a communist. There is no compromising solution here. France, Italy, and Spain, must change. Greeks now being forced to change....GOOD. Now we need to force Italy!
This is only an interlude, the end of act 2.
https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts
You want to give a people a history lesson? Well before you do, you should give them all the facts, not just your distortions. Here for once in your miserable life learn something real:
How the British/American/French blockade of Germany lasted beyond the WW1 (texts in the US/UK/France don't admit to this, why? because victors lie):
http://www.wintersonnenwende.com/scriptorium/english/archives/articles/s...
The betrayal and utter criminal acts of the British/Americans/French at the Treaty of Versailles:
http://www.johndclare.net/EA3.htm
If you want a reason for the London Agreement it is this, the Western Powers out of shame and guilt for the complicity in causing Germany to go down and a path to WW2. Then there are all the reasons for how the British and French were acting leading up to WW1! Furthermore, Serbia was part of the Austro-Hungarian Empire when Duke got shot, Austria was going to punish Serbia, and then the rest of the world, Russia, Germany, England all decided to get involved. Today, the Serbia issue would be considered an "Internal Matter", and nobody would lift a finger. Eg. If we behaved today like we did 100 years, Europe would be at war right now over what, for Ukraine? Give me a break!
Monad, your one eyed view on history is very dangerous. Learn the full situation, you will find that things are not as black and white as they appear. Germany was betrayed by the British/US/French. They suffered greatly, WW2 was a horrible war that was created by all because of the sins and crimes that the British, Americans and French perpetrated on the Germans. WW1 ended in an a draw...but Germany was betrayed at the Treaty of Versailles by the British, Americans and French into a horrible surrender they didn't deserve. Hitler came into being, from out of this. Hitler is just as much a creation of German/Austrian design as of British/American/French, and for the more brighter sparks reading this, yes, I got those two country groupings in the correct order!
There is much more to say on this, but all i will add is this. Stop reading Anglophone books, they are filled with lies, and brainwashing you into thinking things that the UK and Americans governments want. The truth, is much more colder, darker and sinister, and all governments have an equal guilt in WW1, but the British/Americans/French are largely to blame for WW2.
And then what about the people in all this? You know the man on the street, those people who become refugees, like my family, who were betrayed by the Americans and British and handed over to the communists and lost everything! Where is your understanding for the people? Including the German people! In the end, it is we the people that count, not your stupid flawed ideology, and pathetic attempt of teutonic revenge, you find 1,000,000 starved to death Germans easy to live with? You are sick, if you do, the allies starved babies all because they were sour about not winning the war, so they cheated, and stole the peace! Bravo! That is British honour at its finest, starving babies to death, all because they were sore about not beating Germany. Blaaahhhh!
I remind the readers of those immortal words by that bastard Winston Churchill:
"starve the whole population — men, women, and children, old and young, wounded and sound — into submission."
"children" also includes babies you know, but of course that isn't a War Crime is it! Not when it is committed by the British. War crimes are only committed by everyone else. Yeah right. When you British, French and Americans start paying for your war crimes, then, and only then, the world will have a chance to be a better place. Until then the world has to be subjugated to this abuse and clap trap by the arrogant condescending hypocrital anglophones and arrogant greedy french. You can start understanding why Russians and Chinese act the way they do about the West! We have a long way to go yet for real peace and justice.
Stop being selfish with the truth monad...you know nothing about what your talking about! Your ignorance is only causing more anger and cheating the innocent out of their rightful standing!
In fact, I am sure if you really try hard by learning the truth about things, you might finally be able to raise from a monad to a dyad, right now, you're lacking some very basic tensor abilities :(
I suggest you just downvote me next time. This deranged tirade is not the constructive dialogue you seem to be trying to advocate.
didnt Churchill engineer the firebombing of Dresden, which had no military significance....
Satan America does not want
to see a NATO member going out.
Therefore I would urge
that others Portugal, Ireland,
Italy , Greece & Spain to splurge
Eat baby eat
& get fat
before its too late
Take huge loans
& refuse to pay
Becuz
America does not want to see
A NATO member leave