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Greece Isn't Fixed... By A Long Way
Submitted by Clive Hale from View from the Bridge
Don’t take my word for it. Here are four opinions that come to the same conclusion; the euronauts are living in cloud cuckoo land.
'It seems to us that the plan rests on initial forecasts for the economy and public finances which are little short of fantasy. Recent survey evidence suggests that the economic impact of capital controls has been catastrophic, with measures of activity collapsing to levels way below those seen even when the economy was contracting at annual rates of 9pc in 2010-11. Of course, such extreme weakness may end when the controls are lifted. But it is not clear that will be very soon. And even if it is, GDP could still fall much more sharply this year than the 2.1pc to 2.3pc estimate reportedly factored into the bailout’s fiscal projections. We expect a contraction of about 4pc or worse. And lasting damage to Greece’s economy and financial system, as well as its fundamental lack of competitiveness, could prolong the slump into next year and beyond.
This, in turn, suggests that even the amended fiscal targets will prove extremely demanding, if not utterly unachievable. Indeed, the downturn in the economy looks likely to push the primary budget sharply back into deficit in the coming quarters. That would leave the surplus targets requiring considerable extra austerity, with corresponding further damage on the economy.' - Jonathan Loynes from Capital Economics
[...]
Even before the latest damage registered, the European Commission and the European Central Bank were forced to revise downward their forecast for Greece’s growth. From 0.5 percent predicted for 2015 in their spring forecast, they now expect a decline of 2.0 percent to 4.0 percent, according to a July 10 report. It concluded that Greece was expected to have a funding gap of more than 74 billion euros from July 2015 to July 2018.
The I.M.F. put the figure even higher, at 85 billion euros. Negotiations are for a loan of about 86 billion euros, but with banks in such serious trouble (they may require up to 25 billion euros more for recapitalization) and a severe shortfall in revenues, it is difficult to know what Greece’s true needs will be.
The Bank of Greece (the country’s central bank) noted in a June report that nonperforming loans came to 100 billion euros; in the same month, tax arrears amounted to 78.37 billion euros, or 42.39 percent of G.D.P., according to the General Secretariat for Public Revenues. The first half of 2015 showed a 2.36-billion-euro shortfall in revenues. With more debt and a still-unknown impact on G.D.P., even the European Commission’s “adverse scenario” of debt amounting to 187 percent of G.D.P. in 2020 could be optimistic.' - New York Times
[...]
'Having spent the last week in Athens talking to ordinary citizens, young and old, as well as current and past officials, I’ve come to the view that this is about far more than just Greece and the euro.
Some of the basic laws demanded by the Troika deal with taxes and expenditures, and the balance between the two, and some deal with the rules and regulations affecting specific markets. What is striking about the new program (called ‘the third Memorandum’) is that on both scores it makes no sense either for Greece or for its creditors.
Whether or not the program is well implemented, it will lead to unsustainable levels of debt, just as a similar approach did in Argentina....It’s like a 19th-century debtors’ prison. I strongly believe that the policies being imposed will not work, that they will result in depression without end, unacceptable levels of unemployment and ever-growing inequality.' - Joseph Stiglitz
[...]
'Nobody wants this deal...What Syriza tried to do, which I thought was very honourable, was try to negotiate a better deal within the euro...[I was]...asked to look into the problems and challenges that could be faced. Questions of liquidity, payments systems, transitions and so on...The requirement in the current bailout plan for Greece to build up sizeable primary budget surpluses over the next few years looks extremely demanding, if not utterly fantastical.' - James Galbraith
The Germans, the Dutch, the Finns and the Croatians (their respective finance ministers that is, not the people at large) are adamant that there will be no debt forgiveness. Yet that is exactly what will happen by default; quite literally. The bail out is a cynical ruse, not to benefit Greece as a whole, but to benefit the banks and other creditors (the ECB and the IMF) who should take their medicine and move on. The one thing keeping the whole blighted euro project in place is an arrogant denial of the facts. A loss of political face now is a small price to pay for a much better outcome that will disadvantage far fewer people than the disorganised chaos into which Euroland will descend if the current bunch of lunatics are not put back in the asylum. Is this a Europe we want to be part of?
There is no need for a referendum; any sane government would have had us out by now. Why was there no debate over Europe in the run up to the General Election in May? `To keep the people out of the picture? It’s a farce to say we need to be in the EU to have any influence over economic affairs. We have precious little any way and Herr Shambles & Co would remove even more of our sovereignty until there was nothing left. There is nothing to negotiate. The Greeks say they have achieved a result by negotiation, but they are as barking as the rest. The bailout won’t work. Any negotiations with this bunch of serial deniers of reality won’t work either. Mr Cameron can you please find the door marked exit soon? Thank you.
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greece is fixed alright ... like my friggin dog
A critical mass default is coming at some point. Who knows if its going to be Greece, Puerto Rico, or student loans, but something will tip the over-indebted world economy over the precipice.
Combination of all of the above?
Well, Puerto Rico has already defualted, next up is Greece on the 20th. Then who knows... the whole fucking world. And now stocks are being levitated. The ShitShow continues.
This is just on hold, waiting for the right time to blow up. Probably at the worst possible time, like just as the current currency war goes nuclear.
Drachma fixes Greece. Anybody pretending otherwise is being obtuse
Greece can't be fixed, not at least by any means the EU will allow. It won't make much difference anyhow if the global economy takes a giant shit, which looks more likely every day.....
WTF? Greece? Look around you. Nothing has been fixed anywhere. Enough with Greece already.
My Mrs is Greek. She thinks her compatriates are a bunch of f*ck-tards. She got out while the getting was good and got a scholarship to Cambridge.
An example of why she thinks so: Her uncle got an EU loan for some farm equipment... He then promptly went and purchased a brand new car (that has no farming utility). Now he can't manage the farm to keep production going and he's had to borrow more to pay the bills.
Another example: her grandfather takes out small loans against his pension to fund 2 grandsons' lifestyle of non-work.
You couldn't make it up.
Unfortunately this mind-set represents the majority of the population in Greece. - What do you Americans call it? "Free-shit army"?
This will be the third 'bail-out'. If they're about to get arse-raped for a third time and they STILL haven't had political revolution, they bloody-well deserve the tremedous rectal-tearing that's coming. Morons.
The knowledgeable posters on Zerohedge have all announced that Puutie had created some new bank that was going to do the financing for Greece. Supposedly unlimited funding to support unlimited socialist spending. I thought the Greece problem was solved by some meetings and agreements in St. Petersburg. Didn't Puutie just give Tzipass several truck loads of gold to back that new currency? Puutie had the answers back then didn't he? What happened to that bailout deal with the Russian?
The definition of slow motion train wreck...much like the U.S. debt clock stuck at 18 tillion for three weeks, broken?
you know the economic news is getting bad when you don't see a Greece article in a while.. Oh wait.
Greece will never be fixed until most of its debts have been written off. That Germany will never allow. So Greece descends into its own private hell of deprivation and degradation.
Wealthy Germans Forced Pensions of Poor Greeks Down to $94 monthlyhttp://www.paulcraigroberts.org/2015/07/19/wealthy-germans-forced-pensio...
Sure beats 94 drachmas monthly. From Wikipedia - the story of most Club Med (and France) currencies:
"The new currency was pegged at 30 drachmae = 1 United States dollar. In 1973, the Bretton Woods System was abolished; over the next 25 years the official exchange rate gradually declined, reaching 400 drachmae to 1 U. S. dollar."
and
"After World War II, France devalued its currency within the Bretton Woods system on several occasions. Beginning in 1945 at a rate of 480 francs to the British pound (119.1 to the U.S. dollar), by 1949 the rate was 980 to the pound (350 to the dollar). This was reduced further in 1957 and 1958, reaching 1382.3 to the pound (493.7 to the dollar, equivalent to 1 franc = 1.8 mg pure gold)."
I rather like the 1.8 mg of pure gold part.
And then there is the Italian Lira:
"After the war, the value of the lira fluctuated, before Italy set a peg of US$1 = 575 lire within the Bretton Woods System in November 1947. Following the devaluation of the pound, Italy devalued to US$1 = 625 lire on 21 September 1949. This rate was maintained until the end of the Bretton Woods System in the early 1970s. Several episodes of high inflation followed until the lira was replaced by the euro.
The lira was the official unit of currency in Italy until January 1, 1999, when it was replaced by the euro (euro coins and notes were not introduced until 2002). Old lira denominated currency ceased to be legal tender on February 28, 2002. The conversion rate is 1,936.27 lire to the euro."
'We expect a 4 percent contraction' or worse So instead of signing up to the Troika fantasies they could get a tsunami to do the equivalent damage!
"The structure of history is held together by two essential and distinct kinds of links, two moments in time to which no one is immune: moments of epiphany, and moments of catastrophe. Sometimes, both elements intermingle at the birth of a singular epoch. Men often awaken to understanding in the midst of great crisis; and, invariably, great crises can erupt when men awaken. These are the moments when social gravity vanishes, when the kinetic glue of normalcy melts away, and we begin to see the true foundations of our world, if a foundation exists at all."
Brilliant essay by Brandon Smith, set to soaring landscape, and narrated by Patrick Snordster...Outstanding (and check his other outstanding masterpieces from the troubled heart of our times)
Era Of Shattered Illusions
https://www.youtube.com/watch?v=Ku3PtwvK-nk
Hello, what's this now? Greece isn't all fixed now? You must be joking, bloke...
Duh!
when are you europeans going to realize you are being played by the banks ? you're just as stoopid as us amerikans
ONE OF THE MOST SIGNIFICANT THINGS ...
when we look at Planet Earth today. We see that our major political and economic institutions are in DENIAL. They are faced with CHANGE, and the response is denial, obfuscation, and implementation of policies that try to extend "old solutions" to "new problems".
This problem is widespread across the globe today. It is happening to many countries - with a broad variety of political systems. It is happening to ALL of the major superpowers and major political unions. NO EXCEPTIONS.
What happens when you live on a crowded planet ... and the decision-makers are unable to cope with CHANGE in a positive way?
You tell me.
"Maybe I'm...missing something, but for the life of me I can't figure this out. I read and I read, and watch and I watch. Everyone wants to tell me why this world is going to hell..."
"I have always been what's known as a hammer mechanic...if you cant get it done with a hammer, use a bigger one.."
"...you tell Lloyd Blankfein about the misery he has caused in the world just before you tighten the noose around his neck.."
Why Are You Telling Me? (more poetry from Snordster)
https://www.youtube.com/watch?v=oFFCaKtDzuA
Although I wholeheartedly agree in spirit with the message in the video, I think it's well understood that physical, active revolt would be doomed to failure in short order. Those police state MRAPs aren't just for ghetto riots if you catch my meaning. My only hope is for passive revolt, a collapsing of systematic debt servitude by non participation. I believe that if 10% of the country fully applied themselves to eliminating all debt, the game would collapse.
Yes agree, that would be preferable, but discounts the posssibility that we may have no choice...resist or be killed. Soft Kill is already active, and I am witnessing the repurveyors of Police malice and brutality less inclined to hide it. Greece is a new level for 'the west'. Some very excessive policing in legitimate street protests eg Spain, upscaled to Ferguson, upscaled to Maidan. Power rarely relinquishes power voluntarily. And I don't think there's a lot of time, vision or (uninteruptable) connectivity. Personally I've withdrawn my belief in the system, whilst being as active as I can afford to be in my local community. Am fortunate that I've moved from the city to a rural area in anticipation of a crash. Only time will tell...have to 'trust the journey the Creator has arranged for me'...
Have you seen the Grey State trailer?
https://www.youtube.com/watch?v=Gy7FVXERKFE
Broken glass everywhere,
People pissin' on the stairs, you know they just don't care,
I can't take the smell, can't take the noise,
Got no money to move out, I guess I got no choice,
Rats in the front room, roaches in the back,
Junkies in the alley with the baseball bat,
I tried to get away but I couldn't get far,
'Cause a man with a tow truck repossessed my car
"A loss of political face now is a small price to pay for a much better outcome that will disadvantage far fewer people than the disorganised chaos into which Euroland will descend if the current bunch of lunatics are not put back in the asylum."
Like the ECB, IMF etc care about disadvantaged people. ROFL
Jst saw a report from Spain of all the immigrants (many with a senegalese banner) rioting and hurling rocks, bricks and chairs at police.
Where are the cops (Merican ones) when you need them. Europe will be turned into a real crap hole (or is it already?) when these thousand that can't get to Calais to cross into Britain turn around and want benefits everywhere else.
Ah common Clive, just buy that friggin eur/usd and STFU, dont you know Greece is not supposed to be in news till next year?
Just a thought. As honest folks around the world are all getting asset stripped. It might be best if we were clear on the difference between the peoples of a country and its government. From where I sit it matters alot in how this shit show is viewed.
One look at the central banking clowns and thier cadre shows to any honest person that they are a self serving bunch. Hiding behind a gigantic smoke screen. It is becoming increasingly clear to me the smoke is not there to hide the truth from the honest. Its there to provide cover for the ones believing in the dream. Like cult worshippers they will not be looking for truth.
Fiat magic.
Greece needs someone like MacArthur as it will never be fixed by a Greek.
Not to say that Japan didn't morph into a bigger criminal enterprise.
Like Egypt, Greece has been hit by 10 plagues:
1. A swarm of locusts called illegal refugees
2. A cancer of politicians
3. A demographic deluge of oldies
4. A falling birthrate
5. An unpayable and unserviceable level of debt
6. A large exodus of its best and brightest minds
7. A still bloated byzantine bureaucracy
8. A high unemployment rate
9 A banking system ready to topple.
10. A burdensome taxation system and tax level that is matched by the taxpayers' constant attempts to circumvent it.
I could go on but I just realized that their biggest problem is that they have no Moses, Alexander the Great or Solon to lead them out of this impossible situation.
Is Greece fixed?
The answer to that is, just about as much as Fukushima is.
I agree with the downvoter. There are even more plagues:
11. An overvalued currency
12. A German overlord that is intent on strangling and stripping the place"
13. A still docile population that has not revolted
14. A dangerous neighbour in Turkey that necessitates very heavy military expenditure.
15. A legal system that has failed to punish politicians and bankers for past misdeeds,
16. A broke retirement system due to government bonds being written off.
17. An IMF that poisoned the economy with its cures
18. A world economy that is not far behind with its own problems
19, A large portion of its population is still in denial and has still not changed its attitudes.
20. It still can't get its act together to claim what is due after Germany's murderous and destructive WWII stay in Greece.