Summing Up All That Is Wrong With Greece

Tyler Durden's picture

We are not picking on Greece today but in the shadow of Lagarde's (and Thomsen's) comments on how shiny everything is in Greece but risks remain, we thought this anecdote-and-analysis discussion between RGE's Megan Greene and CMC's Michael Hewson was so timely as a follow-up to our previous discussion in December. From her experience in a coffee-less and book-less cafe/bookstore in Athens to a succinct perspective on debt sustainability, competitive issues, elections, and implementing structural reforms, the discussion is a quick-and-dirty way to grasp that it's all about the politics and less about the economics. Greece has a reputation for having done nothing since the initial bailout but that is not true - it has undergone quite dramatic fiscal adjustments. But critically Green points out the much more important 'change that the Greeks can believe in' is the structural reforms - and unfortunately there really has been very little progress. Simply put, until Greece sees a whole new political class (who are not inherently captured and self-dealing) that are capable of implementing the kind of structural reforms necessary to improve Greek competitiveness, Greece will never reach sustainability. This leads to her conclusion (spoiler alert) that what it will take (given that all political parties are at the heart of it the same in Greece from Euro adoption and product ad labor reform perspective) is for Greece to exit the Euro. Quite unapologetically, Megan notes the political 'spring' in the youth that is building in sound and fury and feels that this new political class will not succeed until Greece has hit rock-bottom - though this could take a while as mindsets shift from Euro-friendly to Austerity-unfriendly with perhaps post German elections in 2013 as a catalyst with an amicable divorce.

After the first 7:30 ,focused on Greece, they go on to discuss the LTRO strengths and weaknesses - well worth staying on for...

and at around 10:00 she discusses the Spanish elephant in the room (and the Italian political instability over the next year)...

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sethstorm's picture

can be done with one word - Austerity.

The more they try it, the more things seem to fail in the EU.

sessinpo's picture


"can be done with one word - Austerity.

The more they try it, the more things seem to fail in the EU."



I agree. However, what they (and most in TPTB group) do not say (purposely or not), is that bankruptcy is a form of austerity and the proper one that Greece should have chosen a long time ago. Through bankruptcy, debts are cleared or managed in much more of a controlled manner. Interest rates rise in the free market (funny how interest rates rose anyway despite gov intervention) to account for the risk. The higher cost of money is the austerity. Eco 101.

Jefferson's picture

But Soros says there needs to be more government regulation of markets not less regulation because free markets are inherently evil.

yochananmichael's picture

Wasn't Lagarde born as Barry Manilow?

Trader47's picture

Thanks for this, this was bugging me for weeks, could not figure it out,, but when  I saw Baza singing this

I thought of this 2 dollar Schill, moonlighting!Again in Baghdad

Zero Govt's picture

Now that's informational

Thanks guys, great work

LookingWithAmazement's picture

Greece defaulted last week. Markets still rally. What collapse?

sessinpo's picture


"Greece defaulted last week. Markets still rally. What collapse?"



Be patient. As I commented before, the default or "credit event" was done in a timely manner (timely for certain parties). Many have/had thought Greece would go a long time ago but the can was kicked over and over again. What collapsed? As TD has been pointing out in a play by play exposé, certain psychologies are at play and collapsing. A perfect example is the recent threat about-those-foreign-law-greek-bonds

A similar psychology was at play with Germany as a whole. They (German tax payers) sure as heck didn't want to continue to foot the bill for other failed EU states, thus while acting like they wanted to save Greece, Germany really wants them out.

Now we'll see how Spain, Italy, and Portugal get treated next. I think TD should get great credit for daily play by play threads on this. I don't know why someone would call for Black Monday. It will happen but give it time. I find it fascinating that Rubin gives the EU less than 1 year and stated specifically that the EU probably bought less time then most think. But it won't happen tomorrow.

blunderdog's picture

I know you're just a worthless troll, but I do think this is a good opportunity to ask: are you truly unconcerned about the problems in Greece? 

Things like burning government buildings and ongoing riots and that your vision of how the society is supposed to be?

Dugald's picture

Yes, and yes, do not worry you little head about it, all under perfect control, just a play by play day by day don't you just can't hurry these things, quick excitement is for the sheeple, the gods much prefer slow lingering agony....patience grasshopper.

blunderdog's picture

Don't get me wrong--I'm just doing my part. 

I've seen LookingWithAmazement dropping posts here for many moons, but I don't think I've EVER seen him actually say something.  It's always just little "nothing to see here" and "boring world" comments, as if to suggest that everything is A-OK and the ZH stories are misleading because they tend to focus on negative news.

Every once in awhile, I ask him what he thinks would be something interesting, but I've never seen a reply.

In MY world, when the population of a nation's capital is rioting, occupying government buildings, and enduring daily tear-gas showers, that would qualify BOTH as "something interesting" and also as economic "collapse."

I get the impression LWA doesn't have any interest in world events, though.  Maybe just the S&P number or the Dow. 

Can't tell, tho, 'cause he has nothing to contribute.  That's what makes him a worthless troll.  :)

Ghordius's picture

blunderdog, I lived for a while in Hamburg, Germany, at a time when a whole street in the middle of the city was occupied and there was some riot every week - for years.

I agree that he never says something and that perhaps he is only trolling - but "riots" and political manifestations like last year in Athens or London are simply more common here than in the US - since the 1968 demonstrations.

And on average, our police forces are much more relaxed when meeting them, with less SWAT training getting in the way of moderating their response.

I have a collegue that was in Athens during the biggest "trouble" and for him the only thing that mattered was how the traffic would react...

blunderdog's picture

"Riot" is a pretty vague term.  100 footie fans in fisticuffs is a "riot," but it's a far cry from people firebombing their capitol.

I understand your point, but if you're suggesting that what's been going on in Athens is par for the course in European democracy, I say that's BULLSHIT.

We can agree to disagree, of course.

Ghordius's picture

except for that incident where one bank office went up in flames and killed three?

I'll put it this way: if you consider the Greek situation, I expected much worse.

IMO the Greek demonstrators and Police were both very, very gentle, all things considered

Bawneee Fwank's picture

Greek competitiveness will not return until the generations of government teat sucking leeches die off.

Dugald's picture

And who here, will live long enough to see that.....?

Zero Govt's picture

not me and judging by the sheer numbers of business that have packed up and shipped out there won't be a private sector in Greece 

smart private sector: those huge bills aren't yours to repay afterall

time we all got with the program: No Taxes = No Govt = No Problemo

UP Forester's picture

The coffee/book shop reminds me of a guy who opened up a bait shop up here.

Department of Human Services told him to put a wheelchair ramp on it.

Department of Labor told him to put in a "public restroom" with hot water for "public use" because it was "open to the public."

Department of Environmental Quality told him to put in a $15K septic system to properly dispose of his minnow tank water, even though the salt from the highway it is on and the stamp-sand gravel from the old copper mines that get plowed onto his property is infinitely more toxic.

He finally said fuck it.  The building has stood empty for the last 8 years or so.

Zero Govt's picture

we could probably fill a Cray computer with the horror stories of what the worthless, skill-less, clueless twats behind Govt desks insist the private sector do

anyone wonders why as Govt grows businesses shut down and unemployment cues grow

csmith's picture

How thrilling. Her comments about the need for a new political class which understands business as a prerequisite for economic success in Greece would indicate that we're going EXACTLY the wrong direction here in the U.S.. How many of Obama's cabinet members had any business experience, btw? Oh yea, ZERO.

Zero Govt's picture

No one: John Corzine

fucked up New Jersey regeneration, fucked up MF'ing Global but did well at Goldmans.. you can't go wrong at Goldmans, all downsides are covered (by the Fed)

darteaus's picture

"... until Greece sees a whole new political class..."

That's called a revolution.

bank guy in Brussels's picture

Excellent first-hand article reporting on the in-the-streets revolution beginning in Greece ... talking with the revolutionaries, hearing how they are gathering weapons, how they have the support of increasingly huge sectors of the Greek people:

bobola's picture

"..Near the port of Piraeus and about 10 miles west of Athens, Perama developed after the Greek civil war of the 1940s, growing prosperous in the 1980s thanks to the ship-repair industry.

But now, the once-bustling piers are deserted. A few rusting skeletons of unfinished boats stand outside empty, abandoned warehouses.

That's because business migrated to low-cost Turkey and China, and in a few short years, industry jobs dropped from 4,500 to 50.

The official unemployment rate in Perama is 80 percent. But actual joblessness is higher — even the underground economy that gravitated around the shipping industry has shriveled up..."

lolmao500's picture

1. It's run by banksters for banksters.

LongSoupLine's picture

Speaking of Goldman (uhh hello?..Greece?) CNBS is pulling every "happy Goldman client" it can find to ramp the discrediting tidal wave against's fucking disgusting.  I'm so sick of these MSM shitheads.

Vince Clortho's picture

This is the MSM playbook (directed by their uberlords).

It is revolting, but its what they do.

These sad, disgusting bootlickers are as predictable as the sun rising every day.

I would focus more on the individual who finally came forward and did his part to expose the cancer that has infected the world financial system.

I have seen some criticism about why he took so long, but it takes balls to do what he did.

rubearish10's picture

"In my view" she's fullashit!

dark pools of soros's picture

are all their baristas that economically curious?  

archaeopteryx's picture

Greek are not unfamiliar with austerity.

Unfortunately we have collpased after 30 years of bizarre socialism which created a new class of state and EU-dependent "entrepreneurs" and public employees.  This has been deliberate and at the expense of anything resembling western private sector enterprise.  The weird part is that, with the benefit of hindsight, it all appears to have been with initially German and since the early 90's EU instructions.  The EU did not create the corrupt class of polticians, but the local partners of major "European" companies (and in some highly publicized instances the major "European" companies themselves) have been the perpetrators. It takes two to tango, but that is my point, it has taken two.

Getting out of the eurozone is one valid option. What is needed most, I think, is getting out of the euro-grip. Of course we need something resembling a balanced budget. But we have been getting bribed, coerced and cajoled into not having one (as some of the cummulative current account balances clearly show).

Hard to predict the future; it appears that the emphasis is on further transfer of any tangible private wealth, to some unknown black hole, and "growth" is identified as further mercantilistic concessions to our Central European saviors. My guess is that anybody who can afford to, will get out, and the rest will revert to a neo-feudal state. I often wonder whether this has been the objective, all along.

aleph0's picture

Charming young lady ... but she is FAR too optimistic on the EUro + EU .

Amazing that she even used the word "growth" ... in the EU ...  which has basically become a "Planned Economy" ... just like like East Germany was.

Sounded to me like "polished" EU-PR'opaganda.

The ESM wasn't mentioned very much , although it is to be a seismic event AFA the EU's (non-)future is concerned.

bobola's picture

"...The incidence of HIV/Aids among intravenous drug users in central Athens soared by 1,250% in the first 10 months of 2011 compared with the same period the previous year, according to the head of Médecins sans Frontières Greece, while malaria is becoming endemic in the south for the first time since the rule of the colonels.

Reveka Papadopoulos said that following savage cuts to the national health service budget, including heavy job losses and a 40% reduction in funding for hospitals, Greek social services were "under very severe strain, if not in a state of breakdown. What we are seeing are very clear indicators of a system that cannot cope..."

Golden Boy's picture

I wanna shove my elephant trunk up Megan's foxhole so bad I might pop a vein.

seventree's picture

Dream on. The lady is a class act and you're not.

Son of Loki's picture

The masses are climbing up the statue of Frederick the Great as she talks about more ECB'ing....more debt...more printing....

kanenas's picture

And here is what the politicians will face in the following Greek elections:

Eggs and yoghurts(typo and it stays) are thrown to the Mayor of Zante island by people protesting for a tax hike.

I think there was a good pitcher in the crowd :)


Soon reactions like this will be seen as 'the good old days' since things WILL get more violent.



According to the Troika for Greece to become competitive and attract Direct Foreign Investment it has to fight against Bulgaria and Romania (in EU). 


GDP PPP Per capita

Bulgaria $13,563

Romania $12,358

Greece $27,875

Good luck mentaining law and order while announcing the country wide pay cut of 50%.

PS: How come unemployment doubled in Bulgaria (6%2008 to 11.5%2011)?  Too much DFI?


putbuyer's picture

She is wearing a watch with some kind of shock guard...

GCT's picture

The lady is a class act and is politely saying they kicked the can down the road and look out next year if investors move away from Italy and Spain.  Spain is the real problem coming real soon.

She makes some very good points.

THE DORK OF CORK's picture

There is alot of crazy health & safety stuff with its origins in Europe but implemented at a local level that destroy economic activity -

This is a classic Irish example - we have been under cultural as well as economic attack for some time now.

 These farmers will now have to cross a very dangerous sound or give up farming on the island.

I can see some farmer drowning in the Atlantic because of this - but at least he filled out the proper paper work........


Taint Boil's picture

Damn - she is Hot.

blindman's picture

globalist at the knee of nouriel, model student.
the monetary system is a failure as it always will result in
"this"(below) and the globalists could care less as they control
the taps on everything, that is their appointment..
"Extended application

"Beggar thy neighbour" strategies of this kind don't apply only to countries: overgrazing provides another example, where the pursuit by individuals or groups of their own interests leads to problems. This dynamic has been called the "tragedy of the commons," though it appears as early as the works of Plato and Aristotle.

"Beggar thy neighbour" trade policies can lead to trade wars between countries. These trade wars follow the "prisoner's dilemma" game theory analysis developed through Nash Equilibrium in which 2 countries are poised against each other to produce in the market. Production requires export subsidies for the domestic firm to capture the market, effectively deterring the competing entity. Imagine two companies: Boeing and Airbus, one American, one European firm. They can either chose to Produce or not to Produce. The matrix follows that if both produce both will lose market share (-5,-5) as they compete in the industry. If they both don't produce (0,0) nobody benefits. If One produces whilst the other doesn't (100,0) the producing company will capture the industry and have 100% share (0,100) The game theory states that the first mover, or the initial firm in the industry, will always win. The competing firm will have no incentive to enter the market once the competitor has the advantage and thus will be deterred. However, with a strategic trade policy of an export subsidy, the matrix changes as the protecting government covers some of the costs. The matrix now changes from (-5,-5) to (-5,20) in favour of the domestic firm with the subsidy. This will see the protected firm 'win' in the game and capture more of the market share as the subsidies burden the costs, which would otherwise deter the company. The game does not finish here, as the other company, being usurped on the second move, will then itself become protected through export subsidies, leading to a trade war between countries. Ergo, Beggar-thy-neighbour is evident in trade wars as it increases the domestic welfare at the expense of the competing country."
so , the monetary paradigm dictates the socio-economics to the total destruction
of the socio-cultural and biological reality; this paradigm and "philosophy"
is merely derived from the demands and adherence to the financial dictates
derived from the monetary structure of debt basis due at interest, no end in
sight, and no default or write down acknowledged.
this works exceptionally for the systemically and structurally ordained,
privileged and sanctified. dearest above , aspiring priestess and her wizard
very well compensated.
oh, never mind...
this chick has it(globalism)straight. open up the sovereigns and let the globalists
do their thing baby. when i was a kid they used to say "if it feels good, do
it." the questions are to, for, how and who? and when and where?
and of course for how much, how often and how long?
question: at what time is it too late to buy a book in the hellenic republic
and need we send in troops?
question: why have they made the consumption of a cup of coffee so difficult for
this damsel, need we send in troops to protect her right to drink coffee
late in the evening?
question: who will buy germany's lovely roses if they are not lent euros?
or dollars? or some other fiat paper? who will buy the shit they don't need?
appalling gdp figures could just make me puke on the time table and probably
make the elephant in the room shite itself.

blindman's picture

what is wrong with greece?
it is a country, that is the first problem, of people,
second problem, that is governed, third, by a class of
people that wish to profit from financialization of the
country while the people do not know or wish to be
com modified and financialized , ubiquitous reality.
coming to a town near u.

q99x2's picture


Inflectional paradigm


carbonmutant's picture

LTRO euphoria indeed...

MoneyMagician's picture

A default, and leaving the EU won't help Greece. Sure it's clean slate only if the politicians do massive reforms that promote Greece's competitiveness, but Greeks don't know what economics is, nor they care about free markets. They like socialist/fascist policies from the Greek citizen up. They love the welfare state, and love regulations that hamper economic growth, that's why Greeks are rioting, because they want their free money.  Being how corrupt the politicians are in Greece, from inflation in the 1980's, to lying to the EU about their deficit, moving to the Drachma would ensure inflation for sure. Heh. I have no faith in Greece. I believe Greece is done for. It's just a matter letting Greece go as quickly as possible.

SoundMoney45's picture

A country printing it's own money is far superior to being indebted by bankers.  Megan Greene is just a mouthpiece for the central bankers.  

PORTA PORTA's picture

Good morning everybody.

I have a surpise for you ( like Kinder-Surpise egg ) :

Dont ask me what is it… read the title of the doc.. and click.