The IMF Is Not Done Destroying Greece Yet

Tyler Durden's picture

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Austerity is over, proclaimed the IMF this week. And no doubt attributed that to the ‘successful’ period of ‘five years of belt tightening’ a.k.a. ‘gradual fiscal consolidation’ it has, along with its econo-religious ilk, imposed on many of the world’s people. Only, it’s not true of course. Austerity is not over. You can ask many of those same people about that. It’s certainly not true in Greece.

IMF Says Austerity Is Over

Austerity is over as governments across the rich world increased spending last year and plan to keep their wallets open for the foreseeable future. After five years of belt tightening, the IMF says the era of spending cuts that followed the financial crisis is now at an end. “Advanced economies eased their fiscal stance by one-fifth of 1pc of GDP in 2016, breaking a five-year trend of gradual fiscal consolidation,” said the IMF in its fiscal monitor.

In Greece, the government did not increase spending in 2016. Nor is the country’s era of spending cuts at an end. So did the IMF ‘forget’ about Greece? Or does it not count it as part of the rich world? Greece is a member of the EU, and the EU is absolutely part of the rich world, so that can’t be it. Something Freudian, wishful thinking perhaps?

However this may be, it’s obvious the IMF are not done with Greece yet. And neither are the rest of the Troika. They are still demanding measures that are dead certain to plunge the Greeks much further into their abyss in the future. As my friend Steve Keen put it to me recently: “Dreadful. It will become Europe’s Somalia.”

An excellent example of this is the Greek primary budget surplus. The Troika has been demanding that it reach 3.5% of GDP for the next number of years (the number changes all the time, 3, 5, 10?). Which is the worst thing it could do, at least for the Greek people and the Greek economy. Not for those who seek to buy Greek assets on the cheap.

But sure enough, the Hellenic Statistical Authority (ELSTAT) jubilantly announced on Friday that the 2016 primary surplus was 4.19% (8 times more than the 0.5% expected). This is bad news for Greeks, though they don’t know it. It is also a condition for receiving the next phase of the current bailout. Here’s what that comes down to: in order to save itself from default/bankruptcy, the country is required to destroy its economy.

And that’s not all: the surplus is a requirement to get a next bailout tranche, and debt relief, but as a reward for achieving that surplus, Greece can now expect to get less … debt relief. Because obviously they’re doing great, right?! They managed to squeeze another €7.3 billion out of their poor. So they should always be able to do that in every subsequent year.

The government in Athens sees the surplus as a ‘weapon’ that can be used in the never-ending bailout negotiations, but the Troika will simply move the goalposts again; that’s its MO.

A country in a shape as bad as Greece’s needs stimulus, not a budget surplus; a deficit would be much more helpful. You could perhaps demand that the country goes for a 0% deficit, though even that is far from ideal. But never a surplus. Every penny of the surplus should have been spent to make sure the economy doesn’t get even worse.

Greek news outlet Kathimerini gets it sort of right, though its headline should have read “Greek Primary Surplus Chokes Economy“.

Greek Primary Surplus Chokes Market

The state’s fiscal performance last year has exceeded even the most ambitious targets, as the primary budget surplus as defined by the Greek bailout program, came to 4.19% of GDP, government spokesman Dimitris Tzanakopoulos announced on Friday. It came to €7.369 billion against a target for €879 million, or just 0.5% of GDP. A little earlier, the president of the Hellenic Statistical Authority (ELSTAT), Thanos Thanopoulos, announced the primary surplus according to Eurostat rules, saying that it came to 3.9% of GDP or €6.937 billion.


The two calculations differ in methodology, but it is the surplus attained according to the bailout rules that matters for assessing the course of the program. This was also the first time since 1995 that Greece achieved a general government surplus – equal to 0.7% of GDP – which includes the cost of paying interest to the country’s creditors. There is a downside to the news, however, as the figures point to overtaxation imposed last year combined with excessive containment of expenditure.


The amount of €6-6.5 billion collected in excess of the budgeted surplus has put a chokehold on the economy, contributing to a great extent to the stagnation recorded on the GDP level in 2016. On the one hand, the impressive result could be a valuable weapon for the government in its negotiations with creditors to argue that it is on the right track to fiscal streamlining and can achieve or even exceed the agreed targets. On the other hand, however, the overperformance of the budget may weaken the argument in favor of lightening the country’s debt load.

Eurogroup head Dijsselbloem sees no shame in admitting this last point :

Dijsselbloem Sees ‘Tough’ Greek Debt Relief Talks With IMF

“That will be a tough discussion with the IMF,” said Dijsselbloem, who is also the Dutch Finance Minister in a caretaker cabinet, “There are some political constraints where we can go and where we can’t go.” The level of Greece’s primary budget surplus is key in determining the kind of debt relief it will need. The more such surplus it has, the less debt relief will be needed.

That’s just plain insane, malicious even. Greek PM Tsipras should never have accepted any such thing, neither the surplus demands nor the fact that they affect debt relief, since both assure a further demise of the economy.

Because: where does the surplus come from? Easy: from Troika-mandated pension cuts and rising tax levels. That means the Greek government is taking money OUT of the economy. And not a little bit, but a full 4% of GDP, over €7 billion. An economy from which so much has already vanished.

The €7.369 billion primary surplus, in a country of somewhere between 10 and 11 million people, means some €700 per capita has been taken out of the economy in 2016. Money that could have been used to spend inside that economy, saving jobs, and keeping people fed and sheltered. For a family of 3.5 people that means €200 per month less to spend on necessities (the only thing most Greeks can spend any money on).

I’ve listed some of the things a number of times before that have happened to Greece since the EU and IMF declared de facto financial war on the country. Here are a few (there are many more where these came from):

25-30% of working age Greeks are unemployed (and that’s just official numbers), well over 1 million people; over 50% of young people are unemployed. Only one in ten unemployed Greeks receive an unemployment benefit (€360 per month), and only for one year. 9 out of 10 get nothing.

Which means 52% of Greek households are forced to live off the pension of an elderly family member. 60% of Greek pensioners receive pensions below €700. 45% of pensioners live below the poverty line with pensions below €665. Pensions have been cut some 12 times already. More cuts are in the pipeline.

40% of -small- businesses have said they expect to close in 2017. Even if it’s just half that, imagine the number of additional jobs that will disappear.

But the Troika demands don’t stop there; they are manifold. On top of the pension cuts and the primary surplus requirement, there are the tax hikes. So the vast majority of Greeks have ever less money to spend, the government takes money out of the economy to achieve a surplus, and on top of that everything gets more expensive because of rising taxes. Did I ever mention businesses must pay their taxes up front for a full year?

The Troika is not “rebalancing Greece’s public finances in a growth-friendly manner”, as Dijsselbloem put it, it is strangling the economy. And then strangling it some more.

There may have been all sorts of things wrong in Greece, including financially. But that is true to some degree for every country. And there’s no doubt there was, and still is, a lot of corruption. But that would seem to mean the EU must help fight that corruption, not suffocate the poor.

Yes, that’s about a 30% decline in GDP since 2007


The ECB effectively closed down the Greek banking system in 2015, in a move that’s likely illegal. It asked for a legal opinion on the move but refuses to publish that opinion. As if Europeans have no right to know what the legal status is of what their central bank does.

The ECB also keeps on refusing to include Greece in its QE program. It buys bonds and securities from Germany, which doesn’t need the stimulus, and not those of Greece, which does have that need. Maybe someone should ask for a legal opinion on that too.

The surplus requirements will be the nail in the coffin that do Greece in. Our economies depend for their GDP numbers on consumer spending, to the tune of 60-70%. Since Greek ‘consumers’ can only spend on basic necessities, that number may be even higher there. And that is the number the country is required to cut even more. Where do you think GDP is headed in that scenario? And unemployment, and the economy at large?

The question must be: don’t the Troika people understand what they’re doing? It’s real basic economics. Or do they have an alternative agenda, one that is diametrically opposed to the “rebalancing Greece’s public finances in a growth-friendly manner” line? It has to be one of the two; those are all the flavors we have.

You can perhaps have an idea that a country can spend money on wrong, wasteful things. But that risk is close to zilch in Greece, where many if not most people already can’t afford the necessities. Necessities and waste are mutually exclusive. A lot more money is wasted in Dijsselbloem’s Holland than in Greece.

In a situation like the one Greece is in, deflation is a certainty, and it’s a deadly kind of deflation. What makes it worse is that this remains hidden because barely a soul knows what deflation is.

Greece’s deflation hides behind rising taxes. Which is why taxes should never be counted towards inflation; it would mean all a government has to do to raise inflation is to raise taxes; a truly dumb idea. Which is nevertheless used everywhere on a daily basis.

In reality, inflation/deflation is money/credit supply multiplied by the velocity of money. And in Greece both are falling rapidly. The primary surplus requirements make it that much worse. It really is the worst thing one could invent for the country.

For the Greek economy, for its businesses, for its people, to survive and at some point perhaps even claw back some of the 30% of GDP it lost since 2007, what is needed is a way to make sure money can flow. Not in wasteful ways, but in ways that allow for people to buy food and clothing and pay for rent and power.

If you want to do that, taking 4% of GDP out of an economy, and 3.5% annually for years to come, is the very worst thing. That can only make things worse. And if the Greek economy deteriorates further, how can the country ever repay the debts it supposedly has? Isn’t that a lesson learned from the 1919 Versailles treaty?

The economists at the IMF and the EU/ECB, and the politicians they serve, either don’t understand basic economics, or they have their eyes on some other prize.

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Know shit's picture

Sorry third article were I post this.

All 'nice and fine'....
But I'm a bit frustrated, we can see what is going on and if one wants to he can find out there is some heavy organised plunder going on.
We are all being robbed every day, increadible risks are pushed upon us so a few can gain on these risks, war and destruction is being used for a few to profit upon, every person using fiat is joining a ponzi, most rely on promises that clearly can't be fulfilled, etc...
As decribed in the article it is clear to see that those who do this are only in for their own gains and are willing to and are destroying every one and everything if needed.

What the fu.. can we 'normal' people do about it and what is needed to get us acting ?
If we want a liveable planet for ourself and our childeren, if we would just look a bit furter out than tomorrow and a bit broader than just ourself we know we have to stop them.
We know we have to do it ourself and can't expect or hope someone/something else will solve that problem.
It is getting absurd, we let them take everything, destroy everything, and we still believe things will change and turn for the better by magic.
Voting won't matter as long as they can decide on what we can vote for.
We let ourself being destract by the most simple things, we fall for the modern version of bread and games.
We are willing to look away when others are being used as long as we also have some gain from it.
It is not as bad as doing it ourself but looking away or doing nothing is just a poor excuse..

So again what can/must we do?
Do we have some other choice than removing evil head on?
How do we organise that we start such a movement on enough places it won't be stopped?
How do we prevent such an effort won't result in more of the same in power?
How can we make others see what is going on even if they are closing their eyes?
How can we start discussing this without being stopped if it gains traction and thus the attention of the ptb?

We are running out of time.

Take care

Haus-Targaryen's picture

I have no sympathy at all for the 65% of Greeks who still support the EUR as a currency.  For those in the 35% I feel horribly sorry for.  

Kotzbomber747's picture

Hey guys, it's the 25 of April today. Isn't the Carl Vinson supposed to arrive near the Korean Peninsula today? Isn't there a 'big thing' happening in North Korea today? 

Any "WW3 will break out any minute now" fearmongering in store for us today? You guys better hurry though, because in Korea it's already evening...

Tarzan's picture

Syria has zero IMF debt.... 

You think the war in syria has anything to do with the way their currency is issued?

Syria is fighting to keep them out, and Greece is dying attempting to repay them!

All wars are Banker's wars!

Robert_Bichen's picture

Donald Trump <<< CHRONIC SPAMMER  (spawn of XYTHRAS)

send an email to ::

"BAN and DELETE ALL COMMENTS from "Donald TrumP"  AND  "Art Van Delay"   AND   "alt right dude"   AND  "baby_tone"   who are all the SAME CHRONIC SPAMMER"

BennyBoy's picture


The International Mafia Fund is had at work strip mining the Greeks.

Greece should have defaulted a few years ago. Wipe out the bondholders.

They would have had 2 horrible years then rebuild and be growing now.

Instead it'll be a total of at least 20 years of hell.

Haus-Targaryen's picture


What the Greek government has done to their own people is criminal.  The fact the Greeks haven't risen up and strung up their politicians and bankers illustrates how far we are going to fall. 

The Siren Song of free shit paid for by the state is so sweet, people will rob their children of a future and their elderly of life to keep listening to it. 

Abandon hope all ye who enter here
Son of Loki's picture

Been to Athens recently? My friend said just for grins he stopped by there and it's a disaster. The tourist street is mostly boarded up and vagrnats an dhomeless all over the city now. Too dangerous at night to wander around. 20x worse then Paris which he said is also a total cesspool now.


Seems like the Globalists have destroyed much of Europe. the little people suffer and live in fear an dmisery, which the Brussels' Kings live in luxury surrounded by bodyguards. Sounds like North Korea in a way.

Haus-Targaryen's picture

Last time I was in Athens was the Summer of 2014. 

It reminded me of a city-scape you'd see in some 80s post-apocalyptic thriller.  New buildings abandoned, bored up and a few burned out. Streets are covered wall-to-wall in graffiti and homeless everywhere. Taxis with 500,000 kilometers being held together with duct tape pouring smoke out the back.  I was truly left breathless.  

I cannot even imagine what it looks like now.  

And yet, 65% of the population wants to remain a member of the EU and EUR.  It amazes me.  If people want to live in squalor and poverty, then let them I suppose.  

Great photo compilation of Athens which is pretty close to reality.


MS7's picture

I was in Athens this year and it is not bad. I am sure there are neighborhoods just like you describe. But the neighborhoods I saw looked pretty normal. The tourist areas near the Acropolis were thriving. I agree though that they should have dumped the euro. Their quality of life will only get worse in the EZ. But to the outside observer things looked pretty normal. I didn't see the degree of poverty one sees in US cities.

Tarzan's picture

The abandoned streets of Greece have nothing on the crumbling cities of America.  They can't bulldoze them fast enough.  Everyone knows Most of Detroit is a war zone.  But it's in big cities and small towns across the land.  I drove around Kansas City last year in shock at the abandoned factories and run down streets.

We're all suffering from the dogs of usury.  As long as the people continue fighting each other in the red blue illusion, these dogs roam free to live the high life, on our dime, our enslavement to debt.

Doña K's picture

One more obstacle to going rogue against the euro is the oligarchs' threat by means of belicose Turkey.

wildbad's picture

i think that is largely a referendum on the incapacity of any current Greek leader or party's ability to dig them out of the hole that are firmly in.

McShakingspeare's picture


i went through the other doorway over which was inscribed the words Gnothi Seuton

Haus-Targaryen's picture

There are three things extremely hard, Steel, a Diamond, and to know one's self.

Donald Trump's picture
Donald Trump (not verified) Haus-Targaryen Apr 25, 2017 7:25 AM

Been there in 2015 just days before the referendum. Those three days were the longest of my life. In one full day you see everything worth seeing. Thank god I had 10 days in Corfu afterwards and managed to leave all that horror behind. Corfu is a jewel. Mot people there never leave the island, and don't give a rat's ass about the capital. Leave off the tourism and keep as much as they can, sticking it to the tax man.

Cash was king...plastic made everyone laugh in your face. 

Shitskins and chimps playing soccer all day long, every day (pausing only when Police remembered to stop by) in the Monastiraki square while turists and fruit merchants were going about their business. Wtf, UE lobotomized locals had no problem with that... the pickpockets, small time robbers, beggars and whatnot were having more energy than them.  Then and there I promised myself NEVER EVER to visit a place with people darker than me. Fuck that.. white countries have enough tourist attractions... still.

And those damn 10sec street lights, you were always forced to cross the street running. Every single day old retired people would picket the parliament and not a single fuck was given by politicians.


By the way.. don't you dare thinking Lisbon (Portugal) is much better. 2 tram stops outside the city center.. graffiti everywhere and 90% of the windows boarded or bricked.

But EVERYTHING was fucking cheap, especially the food.  E1.60 or so would buy you 2 squeezed (in front of you) orange juices and 4 in house made pastries.

Robert_Bichen's picture

Donald Trump <<< CHRONIC SPAMMER  (spawn of XYTHRAS)

send an email to ::

"BAN and DELETE ALL COMMENTS from "Donald TrumP"  AND  "Art Van Delay"   AND   "alt right dude"   AND  "baby_tone"   who are all the SAME CHRONIC SPAMMER"

BennyBoy's picture


Usually a bank installed dictator stooge or "democratically" elected goon take on the loans for the "people".

Spend some money on the people, most goes to secret accounts for goons and henchmen.

Goons leave before times get bad and live in luxury.

People are fucked for decades.

rmopf2010's picture

Impressive people are never guilty!

Who voted for it ?

Like in Venezuela, who voted for that ?

When a politician promises you easiness, you bet its is a lie

SixIsNinE's picture

lil Kim is going to name the intersection of the new street that they had that big announcement last week on...


some say it could be a roundabout ... which would be quite daring for lil' Kim ...

hardliners say he will stick with the 4-cornered intersecting @ 90 degrees style that shows no compromise...


wait and see, as they say...

lord have mercy that the lil Kim shows mercy !


lordy lordy!


dark fiber's picture

I suppose the Euro is also the reason Venezuela is a mess too right?  Get real.  Blaming the Euro for the mess Greece is is just ridiculous.

elen's picture

I am sorry you got the above impression. 63% of the people voted "NO" to the Memoranda and the EU. The result was ignored and interpreted as "Yes" by Alexis Tsipras and his government. The Greatest Betrayal of all time from a supposedly 'left' government. Since then, the people have been too stunned to react.

Kotzbomber747's picture

Only 50% of this is Greece's fault. The other 50% of the blame goes to the (western Europe) idiots who gave them the money in the first place! "Due diligence" anyone?

Justin Case's picture

Greece should have never gotten into the EU, but it was Draghi, x-Goldman Sachs man used derivatives to hide Greece's true debt otherwise Greece would not have qualified to join.

EU was Draghi's wet dream. So Greece's fate was inevitable after switching to the EURO. The banks were handing out money like flyers. Then everything went sour globally and the banks were over leveraged. Time to bail out the banks.

The aid programs were badly designed by Greece’s lenders, the European Central Bank, the Europe Union and the International Monetary Fund. Their priority, a report says, was to save not the Greek people, but its banks and private creditors.

After six years of ongoing bailouts amounting to more than €220 billion, or $253 billion in loans, Greece just cannot get out of crisis mode.

This accusation has been around for a long time. But now, for the first time, the Berlin-based ESMT has compiled a detailed calculation over 24 pages. Their economists looked at every individual loan instalment and examined where the money from the first two aid packages, amounting to €215.9 billion, actually went. Researchers found that only €9.7 billion, or less than 5 percent of the total, ended up in the Greek state budget, where it could benefit citizens directly. The rest was used to service old debts and interest payments.

Many Europeans think of Greece as a country that has lived beyond its means and is unwilling to reform. “Who is Saving Whom?” reveals how the expensive, so-called rescue packages actually only rescued the creditors, the banks, the hedge funds and the insurance companies. The transformation of private debt into public debt has shaken lawful, socialist societies to their foundations.

The current executive director of the IMF (July 2011-2015) Christine Lagarde is on trial in France for misappropriation of a $400-million-dollar payoff to tycoon Bernard Tapie while she was Finance Minister in the government of President Sarkozy.

The previous executive director (November 2007-May 2011), Dominique Strauss-Kahn, arrested and tried for pimping in the city of Lille, France.

His predecessor, Rodrigo Rato (June 2004-October 2007), was charged with tax evasion, concealing ?27 million euros in seventy overseas banks and swindling thousands of small investors who he convinced to put their money in a Spanish bank, Bankia, that went bankrupt.

His predecessor a German, Horst Kohler, resigned after he stated an unlikely verity – namely that overseas military intervention was necessary to defend German economic interests, such as free trade routes.  It’s one thing for the IMF to act as a tool for imperial interests; it is another for an IMF executive to speak about it publically!

Michel Camdessus (January 1987-February 2000) His term of office witnessed his embrace and financing of some of the worst dictators of the time, including his own photo-ops with Indonesian strongman and mass murderer, General Suharto.

Under Camdessus, the IMF collaborated with Argentine President Carlos Menem in liberalizing the economy, deregulating financial markets and privatizing over a thousand enterprises.  The crises, which ensued, led to the worst depression in Argentine history, with over 20,000 bankruptcies, 25% unemployment and poverty rates exceeding 50% in working class districts He was never arrested or charged with crimes against humanity.

cstu7011's picture

The banking system will implode on it's own. Our police and military will turn on the parasites when the paychecks stop. They will realize it's their home too. 

SixIsNinE's picture

if so, dallas is the Test Case.  not only police union/pension  issues test the mettle...

but added the oil element as well... and as such Texas and it's history & tax situation...


i have NOT heard how Halliburton is doing since it's decision over a decade ago (2006) to move HQ to Dubai.  that "nooz" is kept on the down, low & dirty.  


such a goooood vibration!


House Music - It's a SpiriTuaL Thing

Pandelis's picture

there is a war on greek people no doubt about it, God will prevail at the end.

there are others beyond the scenes pulling IMF's strings ... if they really believe there is no God why try to destroy the church?  they are well aware it does exist, hence all the sufferings and "wars" economic or otherwise.

dark fiber's picture

Yes, there is some sort of war waged against those who want to retire from the public sector at fifty (and in some cases less) on a pension greater than their salary, on borrowed money.

This book here is a gem: (thanks to rmopf2010)

If you see a Greek whining about the bad IMF and EU, take this book and rub his face in it.  Enough is enough.

SixIsNinE's picture

they destroy the church BECAUSE they want to replace it in the Image that they provide.


Social Engineeeering, BitcheZZZZ



Pop3y3too's picture

Give the Greeks ObamaCare. That'll get that GDP up. A little of that fiscal Viagra will cure any flaccid economy.

Sonny Brakes's picture

Can you do this? Can I trust you? You’re not going to go all Donald on me, are you?

Know shit's picture

Believing in something is your free choice I don't know if there is a God.

But don't you agree that doing nothing or not changing current affairs is part of the reason we are in the current situation?
Is your proposal all people should just stop doing what ever they are doing and even stop eating, drinking, or even hold their breath, and just rely on God to come and save us?

Even if there is a God, don't we have a right, or even an obligation, to fight for a better future for our childeren, stop evil, fight for our lives, the environment, the earth?

Take care.

DutchZeroPrinter's picture

A country in a shape as bad as Greece’s needs stimulus, not a budget surplus; a deficit would be much more helpful.

Stopped reading at this line, too much Keynesian nonsense. Greece should have let the debt deflation run it's course and thereby let all European banks eat their debt. They would have become poor in 2011 or so, but they would be in recovery for 6 years now. They would have been forced by the market to kill the entitlement programs and their government would have been replaced with a smaller one.


Or they would have left the euro and print their new Drachma's all the way to Weimar.

Justin Case's picture

Iceland was the only country in recent history that did the right move. Default and jail the perpetrators that caused it.

Iceland is doing very well today, thanks to a Gov't for the people by the people.

ukipboy's picture

So the criminal banksters are still sucking money out of the Greek economy to prop up banks in France and Germany. But the July deadline is looming. Greece must pay back a big chunk of money in July and if the Greek government do not have the money, they will default. Despite ongoing discussions, this has still not been resolved. Also Germany has set a condition that the IMF must be involved in any future bailout. But IMF rules prevent a bailout without accompanying debt relief (which the EU will not grant). Christine Lagarde at the IMF has already signalled the danger in this stalemate. Will the members of the IMF permit the looting of Greece to continue in order to save the European banking system? Remember that Trump could say no, and so could other countries who are tired of this issue. If that happens, the German government may be forced to bail out Greece or face the consequences of a Greek default. Kicking the can down the road was a great trick but now they are running out of road.

Ghordius's picture

nice nick, ukipboy. why does not the UK take care of Greece? just asking, just asking

Haus-Targaryen's picture

Ghordo, Ghordo, Ghordo, why doesn't Greece just take care of Greece?  Just asking, just asking 

Ghordius's picture

that's a disingenuos question. Greece has a government. is it saying: thank you, but we don't need you? because... and then insert their way, be it a default or a return to the Drachma, whatever? no, it is not

meanwhile, I was asking ukipboy if he would like to see the UK engaged in all this. not that I expect him to have any idea

Haus-Targaryen's picture

It seems to me that the Greek government needs the other members of the EMZ at the moment to finance themselves due exclusively to their membership in the EMZ. Its a Gordian Knot. 

There are tons of idiots in Athens, Brussels and Frankfurt banging their heads against the wall trying to figure out how "to help" the Greeks, when no one with decision-making ability has had the light-bulb moment "Hey, why don't the Greeks just go back to the Drachma and start financing themselves once again?" 

Its as if this painfully simple solution is being ignored as opposed to incidentally looked over, because, after all those in power would never throw their own people under the bus for the betterment of the "federation".  I mean, the EU and EMZ is there to foster peace and prosperity

Also, for the 50% of Greek Youth that have no job and even worse job prospects, what currency lands in their parents bank accounts is fairly meaningless.  

Ghordius's picture

"go back to the Drachma and start financing themselves once again"

my understanding of "financing yourself" is based on production and services. on what is your understanding based? magic credit cards?

Haus-Targaryen's picture


Imagine how many more people would come to Greece over Spain or Italy for Vacation if Greek vacations were 75% cheaper, you could get a beer for 0,25€ and a hotel room direct on a beach cost 25€ a night? 

Greece will need decades to rebuild its industry.  Tourism and shipping would benefit immediately. 

Or should Greece just keep needing a new bailout every 18 months? 

Ghordius's picture

the tourism season of 2015 was the best ever, in Greece. in 2016, it was even better, and everything full

there are no additional hotel beds and no additional restaurant and pub places for your scheme, not in Summer

and all this without your "prices must go down", which would decrease Greek tourism total revenues

Brazen Heist's picture

Because Greece is one of the first major cracks in the new world order economy (of which the EU is part of), the elites are desperately trying to quell this problem by using Greece as a testing ground and sacrificial lamb for the sake of preserving their system. They don't care about the Greeks or the fact that their country is being ruined, so long as the "Greek problem" is swept under the rug with "bailouts" and nobody hears about debt forgiveness again. Because debt forgiveness is ultimately the way out of this whole mess, it is anathema to the elites, as that will expose their flawed system to the world and then everybody else will call for debt relief and then boom, the house of cards will crumble.

Prescribing austerity can only be attributed to a desperattion and malice that abounds in the elites. They want to ruin Greece so it is weak and unable to fight back. This crack must not be allowed to collapse the house of cards that is the debt-based world economy, which is heading for the same fate as Greece - bankruptcy. Greece is just the first major domino to fall, and they are trying to hush it up and make it go away. In the end, they will end up ruining a whole country to preserve the greater gravy train. Greece should have exited the Euro back in 2014 and fought Goliath by repudiating its debt as odious.

Ghordius's picture

you see austerity as "the malice and desperation of the elites"

I see balanced budgets as the complete opposite

it's the exact same

and if you insist in saying that any country ought to be free to have budget deficits... just point out who is supposed to finance, to lend to this country so that it can have budget deficits regardless, whatever, always

Brazen Heist's picture

When you exit, your credit rating plunges, the country goes through a few hard years of being shut out of capital markets, but this period doesn't last long as history shows. You wipe the slate clean, and your credit rating recovers. Capital markets start lending to you again. If you mismanage your affairs again, capital markets punish you for it.

The Euro is a trap for countries like Greece. The IMF calls the pain in sterile terms  "internal devaluation".

It's better to have the tools of external devaluation at hand.