EU spotlight on Greek woes
ATHENS: There is a sense in Athens of a key moment arriving over its debt crisis. The Greek Prime Minister, George Papandreou, is trying to meet the leaders of all the main political parties. There is an expectation that he'll talk to the Greek people, possibly as early as tonight.
This would be a moment watched not just by the markets but by the other users of the euro. This is the most testing phase in the currency's history.
He is expected to outline what austerity measures will be needed to restore international confidence in Greece's ability to pay off its debts and reduce its deficit.
Tomorrow the European Union will give its view on how the deficit should be tackled and how quickly. Politically it would be wise for the Greek PM to talk to the Greek people first, before Brussels delivers its verdict. There is already widespread resentment that international institutions and markets are suspected of dictating the tough medicine of budget cuts.
This is a delicate balancing act for the Greek government. On the one hand it has to convince sceptical markets that it is serious about paring down the deficit; on the other hand, public sector unions are planning strikes next week to oppose any cuts. Doctors, nurses, teachers, civil servants and metal and textile workers are preparing to walk out. Even the tax collectors may strike.
Today I travelled on a bus with a young doctor, Costa Katarachias. He was going to his hospital to drum up support for a strike. After tax he earns only three euros an hour and will resist any cuts. He does not accept that ordinary workers should pay a price for what was done by previous goverments and, in his view, by international bankers. When I mentioned the euro and the fact that Greece had to live by the currency's rules, he said Greece should leave the euro. It is not an uncommon view here.
For the prime minister, then, austerity will be a hard sell. Many on the left will fight cuts and wage freezes. I met today Vaso Mamali, a leather worker. The shoe factory where she works cannot pay the wages. She, too, resented any pressure from outside Greece. Her bitterness was directed at the European Union. "The EU," she said, "didn't turn out to be the paradise it was supposed to be". In her view there was "too much direction from Brussels".
The key test will be this: will the markets stop testing Greece after the EU has announced its plans, or will the turbulence of recent weeks continue?
And the traders will be watching to see whether the Greek goverment can persuade its people that there is no alternative to cutting wages and trimming government spending. To a great extent this may be decided on the streets of the Greek capital.
I'm 
~RS~q~RS~~RS~z~RS~47~RS~)
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hehe
"This is the most testing phase in the currency's history"
I thought that the period from sum'08 to sum'09 was supposed to be the most testing phase of the Euro ?
You know, when US and UK's giant financial ponzi scheme was going down the drain, and governments around the world were scrambling to shore up bank's capital ratios ...
In comparison, Greece's current budgetary and institutional crisis (and that's what it is mostly), is more like anecdotical aftermath.
Unfortunately, it is all the more painful really to Greeks, their immediate neighbours and anyone holding Greek bonds.
But please Mr Hewitt, when doing street interviews to "justify" your line, try put more context into your arbitrary selections and your "It is not an uncommon view here".
Neither is it that it's all UK's fault for driving retail prices up and vampirising nationalbanks, here in Ireland.
But does this "not so an uncommon view here", make it all the more factual or thoroughly thought through (as opposed to the emotional need toscapegoat someone, anyone, rather than to apportion blame where it is due) ?
Best regards,
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Another of the EU's chickens is coming home to roost. The focus on Greece is entirely misplaced. While you prop up the collapsing beam of a building that is in the process of failing, the real attention should be directed at its architects. Those architects are the geniuses in Germany, France, (and Belgium?) who invented the EU, sold it to all those populations, and now have escaped the limelight. They sit deep in the shadows far from the havoc their handiwork has resulted in. Because it is clear that Greece is only the first element that will fail the question has to be asked, is there something inherent in the conceptual design of the EU that made this inevitable. Is this a systemic failure that will continue to manifest itself until the entire edifice has collapsed? What mechanisms were built in to sustain it from toppling over during a real storm? Was the Growth and Stabilitiy Pact that was removed again by Germany and France one such element? Would it be better to disassemble the whole thing before it disassembles itself? Is it too late for that? This is a fine time to ask these questions, they should have been asked and answered decades ago. This is the problem inherent in building something because people who decide what to build like its looks on paper and refuse to consider that in the real world it might not have the coherence to give it the strength to endure when it is tested. By comparison to the United States of America, the ediface of the European Union looks to me to be very clumsy, top heavy, cobbled together with pieces that don't fit and therefore unstable. It's more of a wish than a plan. I said years ago there was a perfect storm headed towards the EU. It's not just the financial crisis that began in the US, it is many other things from the rise of China, the disappearance of exclusive one way favorable trade arrangements with the US that were put in place to get western Europe to recover after WWII and during the cold war, immigration of both legal and illegals that are inconsistent with the social fabric in Europe's closed cultures, the absorption of the weak failed economies of the former Soviet empire, and much more. Seemingly indifferent to all this, Europeans living in the uncompetitive EU now see their lavish government social programs as a birthright and sneer at America for not copying them.
It seems to me that Europe will one way or another soon undergo a radical change in its situation, a change for the worse. If it is unwilling to accept that it must exist in an environment more consistent with its ability to compete with other less lavishly provisioned societies then there will be social strife which will just serve to bring it down faster and further. However you slice it, Europe's day in the sun is at an end. Greece is merely the first real crack in the structure that might radiate outwards. There are others equally serious which simply haven't propagated to the same degree yet. If the leaders of France and Germany want to continue to hold this "thing" together, they will have to finally explain convincingly to their own populations, their taxpayers why they will have to make the sacrifice to do it. And this time for once, the US will not be coming to Europe's rescue.
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@MA2
Seeing how the US is unable to bail itself out but by digging a deeper hole and calling it an inverted tower or "earthscapper"(a perverse legacy of that exceptionalism of yours ;)), be sure that I'll be all too happy not to see US financiers coming down this side of the Atlantic to sell us their "remedies".
If only that could be true, then we wouldn't have to bail out the US, in addition to ourselves ...
Best regards,
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The forces at work inside European Monetary Union are like tectonic plates; slow but very powerful. 10 years of inappropriate eurozone interest rate have opened up a wide competitiveness gap between countries that drove their costs down (Germany, Netherlands, etc.) and those that borrowed and spent and inflated (Greece, Ireland, etc.). There won't be any quick fix to a problem that has been 10 years in the making and it certainly won't be as simple as a speech from a politician. In the long-term there are only four ways out; (i) Greece not only matches Teutonic rigour over the next decade, but outdoes Germany with a decade of Irish-style deflation to make up for the past decade of over-borrowing, (ii) Germany abandons anti-inflation discipline and the entire eurozone devalues to restore competitiveness to Greek, Spanish, Irish workers with the long-term inflationary consequence being that German workers loses out to China in the global market for its manufactured goods, (iii) Greece defaults and Germany and France bail it out, (iv) Greece leaves the Euro, devalues and lowers interest rates to restore its own growth without impacting the remainder of the eurozone.
What we are witnessing at the moment is only minor tremors, but the tectonic plates of European monetary union continue to grind away, building up pressure that cannot be relieved inside the eurozone's one-size-fits-all interest and exchange rate regime. The UK should be glad it can watch the pyrotechnics from a distance rather than have its economy crushed by these forces as it would have been had we been foolish enough to listen to the Cassandra voices that urged us to join 10 years ago.
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MAii: are you still trying to compare the EU with the US? The US is a nation, with all the powers that go with it; the EU is a political and economic union, where powers are delegated from member states to the EU (in much less quantity than many in the media wish you to believe).
Second, what the Greek problem is about is currency - ie the Euro - and its relationship with Greek economic management (not within the EU's or the ECB's control). The Greek governments of the past have fiddled the books and built a massive public sector; plus they have turned a blind eye to a huge black economy. Now they are in such a mess yet their previous devious ways out are closed off. That's what happens when you sign up to strict rules (as for the Euro).
So, the folk on the street complain about "EU interference" - and their politicians won't stop them, of course. Why should they own up to being responsible?
I will be interested to read what Mr Papandreou says. Will he offer apologies on behalf of his predecessors, plus swingeing cuts, plus all the other gestures the media claim EU heads are calling for?
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frenchderek wrote:
"MAii: are you still trying to compare the EU with the US? The US is a nation, with all the powers that go with it; the EU is a political and economic union"
I agree with this 100%, it is paramount to understanding the EU to grasp the difference between a nation and a economic and political union.
frenchderek wrote:
"where powers are delegated from member states to the EU (in much less quantity than many in the media wish you to believe)".
I have to disagree with this, the powers that member states are giving (not delegating) to the EU is huge. The problem with the EU leadership is that it is starting to act like a nation, this is not what it was created for, and is something that it is completely incapable of doing.
The Greek mess is a huge source of concern to EU citizens, for anyone to pretend otherwise is worrying, the fact that the EU has allowed this to happen even though it has strict rules convinces many the the EU is singularly unfit to be given anymore powers.
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#2 MarcusAurelius11 - Pretty much spot on, apart from the bit about the US not riding to the rescue. Check out how much money was funneled through AIG into large European banks, and ask why?
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Greece should never have been allowed into the Eurozone.
The criteria were fudged year after year to enable it to join - it is after all political construct.
The Greeks would do better for themselves outside the Eurozone, but pride will keep them in.
With any luck the whole rotten edifice will collapse.
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I read a bit more about the situation in Greece it looks as they will have to make some changes, i.e. pension at 60 may have to stop, women retiring at 50 will have to finish. Public servants receiving 14 - 16 months salary may have to finish. They signed up to a capitalist system so the socialist they had so far may have to go. It looks as if they will have to increase fuel duties (they are still below EU avg). So, the Euro goes ahead strong and I hope we here in the UK join it soon also.
I just hope the politicians will get over their punch-drunk stage and regulate the banks now otherwise we are all ruined.
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Didn't Greece have the Olympics a few years back - and where are they held next ? Caledonian Comment
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To ChrisArta (9):
I'm turning 30 in Friday, I can only dream that I could retire when I turn 65, it will probably be 70 when my time will come! I also pay for every 1 euro I make, 22 cents to the pension fund, that too will go way up too, and what do I say from it, probably very little as it goes mainly to fund earlier generations.
What goes to civil servants, bring on the market economy on to that sector too. In todays economy there is no room for life time cushion jobs.
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Freeborn John (#4) "... had we been foolish enough to listen to the Cassandra voices that urged us to join 10 years ago."
Cassandra, however, was correct in her prophesies, but doomed to be ignored.
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GH1618
Cassandra is a good analogy of the EU, seduces countries to join and then betrays the country by taking away all its power.
Mind you I think that Cassandra eventually went insane, lets hope the same fate does not happen to the EU !!.
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I just read an interesting mini-report about the latest Davos meeting written by one of the heads of a Brussels-based EUrophile think-tank.
His main observation was that 'Europe' was now irrelevant.
The US and China are the only key players. India, Russia and the rest of Asia (and parts of central/south America are of some interest as they are also areas of strong development.
Still, at least we have Baroness Ashton and Monsieur Rumpey!
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To be fair, the EU or economic and political union predated the existence of the European Common Currency and there has always been an element of risk that the Euro might fail due to the inherent imbalance between the bigger economic powerhouses of Germany, France and the Benelux nations compared to the fragile economies of Greece, Spain and, lest it be forgotten, Italy.
The Euro will stand or fall by the current test upon it by being able to withstand (or not) the now clearly bankrupt economy of Greece and even possibly have to withstand the collapse of the Spanish economy which is in the doldrums if not in danger of collapse due to the over-reliance on the construction industry on Spanish soil.
If the EUro fails to retain Greece as a member state or even collapses due to global loss of support for it, the Euro currency, may or may not recover but it isn't going to go away nor is the EU.
The real problem with the Euro lies not with the weak or even corrupt economies but whether the Germans and the French will want to bail out the poor or corrupt nations that are dragging the Euro down and making the EU look despotic. My bet is that the French and Germans, if put to the test, will say nay to bailing out Greece (or Spain or Italy).
That is when the Economic and political union that is the EU will come a cropper.
The Euro looked a mighty fine thing when european economies were zinging with self-inflated boom derived from debt and unfettereded financial wizardry but now it looks like it could become a sorry mess.
Meanwhile back in the fairytale land of Brussels, the EU is asking for more money for the MEPs and the staff require an inflation-busting set of pay rises. When is this Blog going to comment on "How the other half live a fairytale life in the Ivory Towers of the EU where the global recession and zero inflation does not seem to exist?"
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Freeborn John
I agree with much of what you say but I don't think leaving the eurozone would be easy for Greece.
The reason being Greece would leave to devalue its currency. Devaluations are best done suddenly. I don't think it would be possible to leave the eurozone overnight and have a new currency the next day. All the preparation for this would be done in secret and there would have to be no leaks of information otherwise Greece would risk a flight of capital which would only make the situation worse.
Ultimately I feel Greece is between a rock and a hard place with no easy options out.
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@14 Maxsceptic
why don't you post the link to your "sources"
@15 Menedemus
You are really going fast in your judgement that some Eurozone countries are going to go bankrupt.
Well, even Latvia and Iceland (who are not part of the Euro) are still going through and haven't melted down (yet carrying a huge load of debts)
Remember these headlines ?
http://www.telegraph.co.uk/news/worldnews/europe/latvia/5506768/Latvia-risks-becoming-first-EU-member-to-face-economic-meltdown.html
I mean, today it's Greece that is front-page news, and maybe tomorrow Spain.
But there is more than just a bit of sensationalism in all this. And you are just being played.
Don't you love it ?
Somehow, I can't wait to see the reactions when the UK will have to present a REAL budget instead of relying on QE to finance its operations, and how the famed AAA credit rating has already been lost months ago.
(Btw, the timeframe for that party is in months, not years ... worst case scenario, it'll happen in the days after the MPC meeting)
Best regards,
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The rest of the EU can not allow Greece (or absolutely any one member else, for that matter) leave euro.
If a single first one quits euro, we (in the outside the EU world) will understand that euro is "quit-able". If euro is quit-able, the euro will lose investor's confidence ww. Not all of it :o))) LOL, but there will be a slump down. Of don't know which size. Because many countries (like Russia) now keep national reserves in euro-s partly as well, not only in dollars and gold, some will plan lesser amounts to be converted into euro-s for the next year, of the total natonal reserves. Approx. that line of thinking.
So I am afraid the outside world won't react positively to any single one for whatever reason abandoning euro, with consequances to follow for all the rest in the euro zone.
I am sure Brussels knows it full well and will have to bail out any country that fails even LOL if it persists in this intentions :o)))
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Meath (16): If it became apparent that the Greek state could no longer service it's debt, I don't think it would be so hard to arrange a quick devaluation. All that would be necessary is for the Greek government to announce that from the next day all Euro notes issued at banks and ATMs in Greece would bear a mark or pattern cut into the paper that identified them as 'New Greek Euros' which could be exchanged for unmarked euros at some rate, e.g. 5 New Greek Euros for 4 unmarked euros. Euro coins already bear a national mark on one side so Greek Euro coins could be exchanged at the same 5:4 rate for coins from other eurozone countries. And any money in a greek bank account could be treated overnight as being denominated in 'New Greek Euros'.
Then at a later date these marked Euro notes and Greek coins could be withdrawn from circulation and replaced either with a new currency or regular Euros at the new rate. In the latter case all Greek bank accounts could simply be revalued into real Euros by multiplying their balance by 0.8.
The difficulty then though would be to prevent this becoming a regular once in a decade happening.
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No need to worry that much WebAlice.
The current difficulties of the Greek government, unlike the way it is reported in the UK press, are more like teacup tremors on a floating ship when compared to the issue of the EU or the Euro.
According to "thoughtful analysts" in the UK and US not so long ago, Ireland was "doomed" to leave both, and yet ... the Irish government plans nothing of the sort, and instead are actively courting both the EU Commission, the ECB and international investors (europeans and otherwise) to do business there.
A year ago, Ireland was supposed to go down the drain, and now, "magically", it'll be able (with hardships) to ride it through ...
But hey, what's selling more papers than advertising misery, real or grossly distorted ?
answer : advertising your neighbour's miseries before having to report yours !!
Best regards,
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Starbuck11
No country ever goes bankrupt - what usually happens is that Inflation become uncontrollable and the currency is usually devalued several times to counter the effect . . . then there is a change of government, austerity measures are introduced and eventually finances get back into some kind of global alignment. Sometimes this alignment is masked under the auspices of the introduction of a new currency.
However, despite a nation not going bankrupt that does not mean that individual citizens of that country are not made destitute either by bankrupcy or by loss of value of their saving through rampant inflation or loss of employment.
In the case of Greece, membership of the Euro will prevent devaluation and inflation will not occur except in terms of internal greek pricing. However, austerity measures will be severe and I fully expect to read and watch Greek citizens priced into individual poverty and bankruptcy.
A country may not go bankrupt but a country is its people and the Greeks are going to regret ever having been in the Euro as their businesses fail, their rents and mortgages go through the roof and their jobs go to the wall. There is no mechanism for devaluation of the Euro just for Greece to soften the blow - unless all the other Eurozone countries agree to a universal devaluation and that just ain't going to happen!
The bottom line is that the Greeks are going to want to rebel against membership of the Eurozone because they cannot devalue as they would have done by now if they still retained the Drachma and that, ultimately, may lead to rebellion against membership of the EU.
It is interesting times we all live in!
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Starbuck11 and all.
Well I thought ab it, while walking the dog :o) and thought in fact a country can quit euro without doing much harm to the rest in the union if an excellent marketing campaign is arranged before the event :o)
Message: (Brussels) It is not the case that the NN country quits euro.
(no, better to have this line skipped altogether :o)
Message: WE Brothers in Brussels :o)))) intend to keep euro as good as gold AND assure the investors ww (no, "assure investors" bad figure of speech as well) AND will take every measure that euro stays as good as that soft ugh easy to scratch ugh yellow metal. With this in mind we as of tomorrow fire from euro zone the NN country as not exercising eh? that? financial solvency something approach and would like to note we shall do the same in future each and every time until until? until only those who are fool-proof and reliable stay in and and ? and hope that the resulting size of the combined euro economy will still be be?
be? here we need an equivalent of "inspiring" but with a financial angle of the word.
Long live ? ? long money :o)))) old money, and ? and ? let us wish you a good day.
(Or something equivalent of Starbuck11's famous "Best regards" :o))))
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Menedeums;
"In the case of Greece, membership of the Euro will prevent devaluation and inflation will not occur except in terms of internal greek pricing. However, austerity measures will be severe and I fully expect to read and watch Greek citizens priced into individual poverty and bankruptcy."
Is there such a thing as "internal" Greek pricing? Why can't Greeks just go abroad to get those things they want at other EU conuntries with their Euros? Why can't they simply emigrate to France or Britain for that matter? Poles did it. What is far more likely are shortages forcing people to shop elsewhere. The deteriorating services, wages, and living conditions will make Greece an undesirable place to live. When wages are depressed, will capital investment be attracted to it? There are many other places in Europe, the former Soviet satellites for example that are also low wage nations trying to attract investment.
Starbuck 11;
"Seeing how the US is unable to bail itself out but by digging a deeper hole and calling it an inverted tower or "earthscapper"(a perverse legacy of that exceptionalism of yours ;)), be sure that I.."
The US has been through worse. The great depression of the 1930s for exmple. Not only did the US survive, it went on to prosper and thrive aferwards. It always seems to. It will probably be no different this time.
WA;
Good point about rats deserting a sinking ship. If one country flees the Euro, it could be the start of a stampede. Regaining control over one's currency is the first step towards regaining control over how the economy can respond to hard times. But how would that be done? Could it be done quickly enough? Raises lots of questions. That could spell loss of confidence in the Euro and the start of a downward plunge. Yes interesting time.
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As a side note, Ukr. Youshenko just put a big swine to either one of his successors to the throne, in several days' time. Signed the increase of pensions, minimum wages, state subsidies, state salaries and what not huge budget increase. When IMF saw the thing (on whose money Ukraine lives) they thought it's a joke :o))) and asked Youshenko "Surely you aren't going to sign this?"
I don't know what he replied to them, only know that they asked.
And that he signed and Ukraine is happy. :o))))
Un-happy are only both Janukovich and Timoshenko either of who will have to cut it all back in future.
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sorry, a deviation, just too funny. last time from me in Greece. just skip over.
_________________________________________
Who is worthy to be Ukraine's president? A survey in a Russian site, not Ukrainian, but one of those where we both chat. Still, must be more Russians.
Janukovich. 45 bloggers.
Tigriulya (Tiger Julia) fond nick-name for Timoshenko. 29
Return back Joushenko! 14
Seriously, Yatseniuk, but his time hasn't come yet. 1
Overall, Tigipko, but his time is ahead. 13
Pity that not Simonenko. 18
Why forgot Litvin? 3
Tyakgnibok will become, one day. 7
Against them all! That's our choice! Tear the bulletins! 4
By now it doesn't matter .... :o)))))) 20
I wish Americans would send someone, at least, something! 8
Or Georgians, it'll also do. 8 :o)))))
I know one "literate" (slang for "brainy") chap but he won't agree for such a dirty job, he's a plumber. 13
Who are all these people? 11
There shuold be no president in Ukraine. 24
There should be no Ukraine. :o))))))) 110
Elections of Ukrainian presient - internal matter of Ukrainian people. 69
This survey ignites our quarrels. 24
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I have been thinking about the disastrous financial situation in Greece .
I have read that Karl Marx acknowledged that Communism was a mistake and would fail; it lasted about 70 years .
The EU as it has developed has become a similar mistake ; with the dream of creating a single European state . The Euro , intended to "Level the Playing Field" , make all countries equal in competitiveness , paving the way for total union , has been an even greater mistake .
In Brussels the EU sees members states as being equal as man in the eyes of God . Some countries are poorer , their cost of living less , their wages less and they can market products more competively than other countries , such as Germany , France and the Benelux countries . By enticing them with lavish promises and financial stability to join a single currency and the idea that their money will be equal to everyone elses in Europe ; the EU has hoodwinked them into something they should never have entertained .
Southern European Mediterranean countries in no way compare with the Indistrial countries of northern Europe . Peoples thinking and outlook is completely different .
I can only speak for Italy , as I have lived there ; but I am sure that Greece , Spain and Portugal are very similar .
Tourism was a major industry , many people from northern Europe had second homes there , agriculture is a major industry and then manufacturing industry . Milanese people and those in northern Italy are not unsimilar to northern Europeans , but there workforce largely came from the south accepting lower wages and giving Italian industry a competitive edge . The higher cost of living in southern Mediterranean countries , makes them as expensive as anywhere else as a tourist or retirement destination . It is cheaper to fly to southeast Asia .
The Italian finances were in dire staights with the Lira . The Italian government effectively " Cooked the Books " to qualify for the Euro ; in the false belief that with the Euro and the support of the EU , their financial deficits would correct themselves .
Some of my Italian socialist friends were so excited about the coming Euro . I said to them," Yes, you will be able to travel in Europe and your money will be the same as in other countries ; but you will pay for it dearly at home ". Prices went up 30% in the first year and 100% in subsequent years .
Italy , Greece , Spain and Portugal , Ireland too , are poor countries where people live simple inexpensive lives . To have expensive welfare services and modernisation which the country cannot afford and to dramatically raise the cost of living has been a madness . These countries and their people do not have the scope or will to compete with industrial countries like Germany ; it has been a madness to make them think they can .
The EU in Brussels only thinks of furthering its corporate and bureaucratic self , pay excessive salaries to themselves . Imagine if they had to pay for redundancy of 700,000 people .
The Insolvency of Greece could indicate the beginning of the end for the Euro and the European Union , having a knock on domino effect .
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@26
The problem with Greece has to do with their governments that for the last 10 years let their revenue base collapse and their expenses grow, it has nothing to do with the people receiving huge wages that makes them unable to compete.
If as Gavin says above a doctor earns 3 Euro an hour after tax, I fail to see where and how the Euro made the country expensive to do business in it and how if they had another currency they could devalue it! Devalue to what? Any lower and that doctor would have to work for free (almost does now) or even worse pay people to be sick to visit him!
@26 Huaimek makes a very nice simple analysis getting everything wrong!
a) No where was there mentioned insolvenscy? So, you made that one up.
b) No where was there mentioned that they can't compete using the Euro as their currency? So, you made that one up.
c) Prices in Italy went up 30% in the first year and then 100% each year after that?? You are sure of that now?
If you don't already work as an analyst for a bank, please apply for a job there, it looks like you have the right skills to get a highly paid job. I.e. making up numbers and facts as you go along to suit your argument.
For normal people like you and me and the vast majority of people the Euro is one of the best thing the EU can offer us today. The other benefit will only come if and only if we put presure on them to make the EU back to what it should be a political and trade block to look after all the people inside that union. Not just the few bankers the super-wealthy and the free market fanatics. There is no point in having an EU that does not look after its citizens, an EU that exports jobs, technology and know-how to other parts of the world because it is cheaper to make things there and then import them back as finished goods to sell here.
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Thanks for the insight into what Greek people are thinking Gavin. They face some difficult decisions and times. It appears from your report that they do not realise the scale of the problems facing them. I have been following the updates on http://notayesmanseconomics.wordpress.com on this subject and he feels some sort of bail out will be required.
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I’ve posted this before, but still:
You can let individuals fail, you can let companies fail, but you can’t let nations fail.
The ECB will have to print more money and give it Greece. And then it may have to print some more and give it Spain and Portugal. The Irish might not like it though if they don’t get any for being responsible and addressing the problem.
They’ll need to hide it in a ‘fund’, so as not to bring it the direct attention of the fiscally prudent, but that’s not impossible.
In any event the European Union will cease to be a Union if Greece fails.
There’s too much at stake it’s as simple as that.
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I wonder if this will be the first real outing for our new EuroCops when the Greeks decide they do not want to suffer to keep big bankers and politicians fat.
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Greece is 12 million, the Eurozone has a couple hundreds of millions. It is a miniscule part of the economy, Similar to one large city in the US. The problem lies with increasing competitiveness in the PIGS. But they were going to need to do this at some point anyways. With or without the Euro. If they simply revalued the currency then at some point their currency would have been worthless.
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Dempster wrote:
"I’ve posted this before, but still:
You can let individuals fail, you can let companies fail, but you can’t let nations fail."
Who is this all powerful "you"?
Perhaps dempster means the ECB, or the Commission. Regardless of who is referred to, it is curious to suppose that some entity has such awesome powers to save entire nations from themselves. That seems well beyond the concept of an economic union. It hints of a new saviour, come down from heaven in order to redeem the sinners. I suppose that is not an entirely new idea, but it remains intoxicatingly simple and refreshing. I can see why folks go in for believing it.
However, the non believer in me tends to wonder what governments do, on a day to day basis.
I don't mean to ask "what are governments for?", or "why do we have governments?" I mean specifically what it is the folks in government do with their day.
It would seem that governments following the two party system of representation borrow money and spend it. And they collect taxes and spend that, too.
Now putting to one side the great work done by governments, I wonder if the borrowing of money has become a critical part of the job. There are good reasons to think it has done so.
After all, taxation revenue is always a secure source of income. You can just send the men with guns out into the street and start taking more stuff from people. As long as everyone wears a uniform, it is taxation and not robbery.
And so if taxation is enticingly reliable as a means of getting stuff, it follows that lending money to governments is enticingly secure and profitable. It would follow that those with money to lend would be secure in their futures if only they could find governments willing to borrow.
And, by grace of god and the most unlikely of co-incidences, they have! Who'd have thought it? The things that "just seem to happen", hey?
I mean, let's not be flippant without cause. It really is the most remarkable co-incidence that banks make money by lending to governments, and at the same time governments always seem to need loans.
The more you think about it, the more remarkable and amazing that situation appears. After all, governments could always just spend less and tax more and pay for what they do without borrowing money.
Isn't that sort of what the ECB wise men are now telling the greek government? Live within your means?
So why don't governments ALWAYS do that? If governments SAVED money, perhaps they could invest it and start turning a profit on their investments! Then taxes could be lowered, because the government would have income to spend on the glorious stuff governments do without having to send the men with guns out into the streets to grab stuff from folks.
Well, it is an amazing thing, but here we have bankers telling governments to borrow less. It just goes to show how selfless bankers really are. I mean, here they are, making so much money from interest payments on government debt, and yet they are now telling the governments to borrow less!
It just confirms that all the bankers in the ECB and Brussels generally are without doubt the best people to lead the mad parade of the EU. After all, what more ringing endorsement of their characters could you hope for? They make their money from government debt, and yet they are advising governments not to borrow so much. Totally selfless and community spirited behaviour, I would call it. A breach of the corporate duty to their employers and shareholders, but never mind that small detail. When confronted with bankers being selfless I am just far too overcome with joy to mind miserable details of corporate law.
Now if only the bankers can hold their line, and continue to advise governments to borrow less and to save money and to pay off ALL the debt. Then save, and invest, and thus reduce taxation. If these truly selfless moral agents who rule over us with such gracious charity can just keep advising our governments to borrow less and save more, then one day we will not need to pay taxes in order to repay interest on loans to banks.
But somehow I don't have the feeling in my bones that the advice from the bankers will remain consistent.
I look at representative governments all over the world, and they are all in debt, and borrowing money.
Somehow governments are so overcome with the desire to spend money on glorious good works, saving sinners and the like, .... somehow the blinding hurry to do fantastic deeds for the common folks just seems to get in the way of sensible budgeting. Its a heck of a thing, but here we are.
On the bright side, at least by borrowing money from the banks, our governments are ensuring the banking class have a secure income, indeed a fair portion of our taxes. That is reassuring. It speaks to me of bankers living comfortably, and thus being able to reason carefully about what advice they give to governments.
You have to be comfortable to give good advice, and heaven strike me grey as an elephant if our governments don't seem to need some good financial advice just now.
They can't seem to hold of on the saving of the sinners for long enough to balance their books!
If there is anything as tragic and mournful as a saviour with money problems, I guess I don't know what it might be. A kitten drowning in a fishtank, perhaps.
Regardless, I'm sure the bankers will be giving some much needed counsel to their government friends just as soon as they have got themselves situated comfortably. It should be about to happen any time now, by my reckoning. After lunch, perhaps.
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Dempster,
Quantitive Easing of the Euro? What an idea!
If the ECB were to start printing more Euro Notes and issue them into circulation within the Eurozone (they can print Greek Euros but a Euro is a Euro is a Euro!) then imagine where those notes are going to get spent ...... not in Greece (where a Doctor earns 3 Euros an hour) but in the wealthier Eurozone countries like Germany where more currency being spent would lead to inflation in those wealthier/healthier(?) economies.
The simple fact is that the ECB and the Erro currency was designed to act as a constraint on any one of the Eurozone countries from being able to inflate or deflate their economies by isolated intervention and to develop a europe-wide economy of grand scale. The ECB may only influence the whole of the Eurozone and not a single Eurozone nation's economy that has collapsed or in imminent danger of collapse - to try to do so by manipulating the value of the Euro risks damaging the economies of the other eurozone nations.
The Greeks have created an economy based on artificial debt (who hasn't!) but this has been aggravated by false accounting. If the ECB were to intervenes with QE then I fully expect there to be a short boom followed by massive inflation within the Eurozone - the Greek economy might recover but, just like here in the UK, when QE is terminated (as it must) then inflation will occur, job losses will result and poverty will result with a vengeance.
The Euro was only a success because it was based on the lie that all Eurozone nations had similar healthy vibrant economies. This was never true and the Euro was destined to come to a point where any one of the Mediterranean Countries or the fledgling democracies of the former Eastern European Bloc were going to falter with their burgeoning economies and risk the failure of the Euro dream.
Latvia, then Greece followed, perhaps by Spain have faltering or failing economies - the wealthier Eurozone countries will not stand for their wealth to be paid into what could become an ever-widening black hole.
MAII @23.
Yes there is an internal economy within Greece which is based upon local pricing for goods, services and traded goods. Exported goods must sell at a price that is dictated by the economic strength of the whole of the Eurozone which is Greece's main external market.
The problemn for Greeks who will have to suffer the consequences of the austerity imposed on their internal economy is the same the world over - some Greeks will be able to upsticks and move elsewhere but the majority of Greeks will be forced, by circumstances beyond their control, to remain in Greece and suffer the consequences of the Greek economy being sustained by false accounting and fraud as well as debt-driven boom.
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Perhaps a political party will stand for election in Greece, promising to pass laws holding past politicians personally liable for the debt they have borrowed in the people's name?
Perhaps a political party will stand for election promising to save tax revenue and invest it, rather than borrowing money to spend it?
Perhaps a political party will stand for election without the funding of the financial institutions who make profits from public spending and public debt?
Oh, wait.... that last is not a possibility. I forgot how the two party system operates.
Oh well, envy is a sin and you have to hand it to the international banking community. They sure know how to make a dollar (and a euro).
Incidentally, Switzerland is a curious case study of a nation that is not ruled by banks. Funnily enough, local, regional and federal government here actually makes money. You see, rather than borrowing in the name of the people and thus giving away futures taxes to banks, the governments here SAVE money from tax revenue, and invest it. And thus profits from the government investments is available for public works, and taxes can be lowered without hurting the quality of public infrastructure.
It is kind of like the opposite of a failed state. Instead of borrowing and borrowing and making international bankers rich, government saves and invests and makes the people rich.
The whacky Swiss, hey? Crazy folks who can't even speak english properly, doing things all wrong. Allowing people to veto laws made to favour banks and corporations and so on, and calling that democracy!
What will they think of next? Something stupid like the Red Cross, or laws against war. Something odd and stupid, for sure.
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Dempster #29;
"I’ve posted this before, but still:"
And I've posted this. The model of Europe in the future is Africa today. It may not have the cross border wars but Africa is its economic model. Without the US to prop it up there will be a striking resemblance. Will the US or China invest in Europe thw way China invests in Africa? I doubt it. Unlike Africa's mineral wealth so important to Chine which has none of its own, Europe has no assets to attract foreign investment, money that couldn't be put to better work elsewhere. Europe refused to realistically assess its circumstances, it plight in respect to the rest of the world in a global economy with an increasingly level playing field and make the necessary adjustments to accomodate that reality. Now it will suffer the consequences. The party is about over. The absurd dream is at an end.
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You seem to remain too much in the financial and completely unable to se the greater picture. When talking about Greece, the issue was never financial, it was and is and will be purely geopolitical. That the Greek state has been over-debted is known, the country still pays off debts dating even before independence back in 1830 (some African countries should listen to that). That the Greek state has been bunkrupt twice in the last 150 years is known. That the Greek economy was always bad is known. That Greek economy had never been properly developed and that it cultivated a para-economy and a philosophy of tax-evasion, dirty-tricks, success-only-in-illegfality, black economy, mafia-rulings... it is known and was known long before the country enterred the EU. That EU money ended up in the pockets of a small circle of power around the 5-6 traditional political families (almost royalties!) was known all the way since 1978 when Greece enterred officially in the EU. You should wonder why it ever joined the EU? Perhaps because Greeks are cool people afterall? Or to have the country of the Classical & Byzantine cultures, basic foundations of Europe? Really? Not at all. It enterred the EU cos it is a hot geopolitical spot to be controlled.
I stress it again: Greece's greatest problem right now is not financial. Even the most uninformed/uninterested Greeks are aware of that. It is the very same integrity of the country that is under attack. It is the only EU country that is under direct threat of war - something that fantastically escapes the minds of, obviously fearful, Europeans who simply do not want to admit the bitter truth, that they are and powerless of doing anything and completely incapable of imposing their own will. Greece is a country that is not let to have full control over its own surface, let alone have an independent political will and its own financial strategy - thus expecting it to perform is simply out of the question, unless foreign investors decide it a good idea to throw in money. And the weakness of Greece is in away mirroring the weakness of Europe in having its own political will. Contraty to expectations in the late 1980s, early 1990s and as it was demonstrated repeatedly (war in Jugoslavia, war in Iraq etc., relationship with Russia), EU is far from even dreaming of having its own political voice in the world.
In other words, yes the EU remains a caricature but not for the reasons that our British friends (traditionally anti-EU) mentioned above but for its inability to develop a common foreign policy that could eventually lead to a common defense policy that would require no "overulling protection" from the US (militarily the EU is very much in position to defend itself, its the clear political will that lacks). And as 1st-year politics students will tell you, financial stability is only ensured with the presence of a sound defense policy.
For all those that spoke of a possibility of Greece exiting the EU it seems that they are not so well informed as to the importance of Greece in the geopolitics of the region. Needless to say that Greece legally owns the Aegean which makes void the control of Bosphorus by Turkey (and that is why Turkey, no matter if EU-candidate, officially poses always the threat of war over Greece - an insane situation!) - both of which are obviously the door of Russia into the Mediterranean (something they strive to achieve for at least 300 years now and something that dictated the world's politics from Napoleon's campaigns to the Krimean war and WW1). So needless to say what repercussions could that have: in a now fantastic but then 100% realist scenario, Greece following such an exit from EU has no option than to kick out the remaining US bases as well (since only harm they did so far) and call in for good the Russians. Russians simply take over the briefly emptied US base in Suda and thus gain a hotspot of control in the Eastern Mediterranean. Each ship passing from there will be scrutinised openly then by Russians too, not only the Americans. Turkish ships are banned from the thin 6 mile strip of Aegean sea that on average the Turks control now and perhaps they will be pressed to just let Russians play all the way in Bosphorus in hope to retain any control of theirs in the region, given that the US can press but in no way engage directly against Russia as it is shown in the recent cases.
So where Europe fits in all that? Well that way they forget any hopes of having any more direct access and any more control over the East-West trade and that includes not only the gaz and oil pipelines but also all kind of maritime commerce. That is why an exit of Greece could be downright catastrophic for Europe much more than 1O economic downturns together! Europe's bet is not to aid Greece or just any Greece to set up its economy. Europe's bet first of all is to come out as a world player with a common external affairs and defense policy, a real player between US, Russia, China, India and Brazil. And until now, that is far from reality. When it will do it, the financial probles of Greece (or any Greece) would be the last of the last of issues (not to say it won't exist as an issue).
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Nik, looks convincing, but somehow I never heard on our side of the desire to ever "have" or "control" or "have for friends" Greece.
Can be because Turkey is enough. I mean, not to get out. So it never mattered what is there further on along the route out.
Plus the Gibraltar dog.
So I don't know how geopolitical Greece is. Must be, and we just forgot :o))), but definietlly it didn't matter before, somehow.
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You rarely ever hear in Russia about Greece. We don't know anything abouut them. It is presumed that they are friendly to us, or, rather, hoped, because of religious past. But then they are NATO, which gave Russians an opposite message.
In other words - nobody never checked how exactly Greeks like Russians and the other way around. We didn't ask anything of them and they didn't ask anything of us. The only thing we know that half Cyprus was grabatised from them, in this Russians sympathise Greeks. But Cyprus we know better and know for sure that the "proper" half doesn't like to be invaded, so we got the news from Cyprus complaining, not from Greece itself.
In Crimea the Greeks who always were there we like, because those we know practically and get along well. But the Greeks in Greece we don't see or saw often, only know the Cyprus ones and the Crimean ones.
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Simple and straightforward message to the Greeks:
Beware false EU EUrocrats bearing too-good-to-true economic aid gifts.
It was the Hellenes of classical Greece who first threw off King Darius' Persian yoke 2,500 years ago. Their inheritors time and again withstood the overmighty and imperialist intentions of neighbours near and far. 2010 Greeks should not now go softly and servilely into that long night of yet another avaricious, aggrandising supra-National power: This time the hegemony is based in Brussels, but though the language and behaviour may appear more civil Greeks must not forget or forego their inheritance - - the unique independent 'civilisation'.
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Starbuck11
Re #20
".. unlike reporting in UK Press..(Greece, Eire..)"
Interesting that apparently you think it is the UK media making this an out of proportion story: Its really odd because if you care to look at the Southern Irish Press all last week and Monday of this its pages are full, to paraphrase, of 'can Eire avoid going the same way as Greece?'
Very odd you have not noticed even from a cursory glance Greek tv, radio and newspapers all been holding mass 'what should Greece do?' inquests!
Odder still, you think it is the UK Media exaggerating the EU is holding emergency meetings concerning Greece!?
Just why would a 'pro-EU'be getting so nervy?
Oh wait!
Greek PM Papandreou is far from happy with the way EU Brussels appears to be pushing for harsher 'austerity measures' in Greece - - what next? A EUropean Leader advocating less 'closer union'!
Greek Dr Katarachias was considering organising a strike in protest at what the Greek Government is likely to propose.: He apparently backed leaving the 'EUro' - - shock, horror! Quit the most noble enterprise since mankind walked erect into the sunlit uplands of EUro-zone!
Vaso Mamali, presumably a fairly ordinary Greek Citizen worker stated to Mr Hewitt, "..the EU.. didn't turn out to be the paradise it was supposed to be.." - - Aaaargh! How could such a thought emerge from a European throat? A Briton, yes, but sur le continent, surely a Briton in disguise!
Of course they are but 3! There's no need to fear most of the EUropean Citizens' views of the EU.
Why only last year the EU held supra-National Elections to a marvellous European Parliament and the Voter Turnout was...
Oh wait!
I'm sure there's a better example.
Ah, I've got it!
16 Years ago EU Citizen voter turnout was over 50%! There! Now isn't that an endorsement of this great European Project.
Honestly, anyone would think that 12 million Greeks mattered in amongst 450+ million!
What's that? There wasn't a EURO, wasn't a Schengen, wasn't an 'eastward expansion' 16 years ago, so, the Greeks may be complaining about an EU that is not reflecting European Citizens' needs and wishes!?
Oh come now! Buck-up!
The EU is simply the very best thing: We have that on the authority of the EU that told everyone it was.
Those Greeks just ought to learn their place in the pecking queue!
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BBC Radio 4 'World Tonight' programme 10pm.
Headline: President Obama Snubs Spain and EU.
The gist of the report is that Obama cannot work out which of 3 EU 'Presidents' he should be addressing if he went to a conference in Spain during its 6 monthly Presidency of the EU - - Mr Zappatero, Msr Rompuy, Mr Barroso - - which one could inform the USA President about the EU attitude/policy to Afghanistan, Climate Change, Iran etc.!?
Or, as 1 commentator said, Baroness Ashton (I swear I heard a giggle in his voice!)?
As a side-issue (& I only offer for a laugh not as significant to the EU), apparently, the Spanish Government had more-or-less formally announced arrangements for Obama's visit & now have much egg on various bits of anatomy!
On the serious side: Does this indicate the continuing and increasing political divide between the EU 'old Europe' and the USA that Sarkozy & Merkel were claiming to have averted?
It seems to me the supporters of the EU are getting exactly what they wanted: Only trouble with getting what they wished for is, as everyone now looks at Germany to rescue the EUro, Greece, Europe (true enough, inc. UK ) etc., they are rapidly realising Germany will not just dip its hand in its own funds as the USA had done so often in the past to assist Europe.
Some very, very expensive EUro-chickens are going to come home to roost in the next year or 2: Greece, Spain being among the first of several to find and experience Paris-Berlin aren't at all as friendly and neighbourly as the EU had led them to believe!
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Look at how rich the EU has made Europe. Before the EU Europe had no transnational presidents, now it has three.
One problem for the EU is that the French people themselves don't seem to like the EU. At least not the way their leaders do...or did anyway. Chirac and deVillepin were of course strongly commited to it. But the people voted against the Constitution much to their surprise and consternation. That of course is why they never got a shot at Lisbon and won't ever get to vote on anything really important again. I'm not sure the French taxpayer will be thrilled about sending his Euros to bail out Greece, Spain, or anyone else. They don't seem so generous to me, especially when they are so removed from it. When forced to choose between big egos boosted by the prestige of being a wannabe superpower comparable to the US, China, etc. and their own pocketbooks, in the end their pocketbooks will win out I think. But even Sarkozy must have had his moments when the EU told him he could not insist that all Renaults sold in France had to be built in France.
So that leaves the Germans. Still reeling from the cost of rebuilding the former east Germany and accepting its citizens who never developed socially since the end of WWII the way west Germans did, they now face the prospect of rescuing every failed economy in the EU. At what point will they have also had their fill of it? At what point does this absurdity finally fall apart. Stay tuned, each episode has more thrills in it that the last one.
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ChrisArta
I have read many of your comments on EU Affairs . It is clear that you are a Great EU supporter . You give the impression that you are blind to anything other than a Rosy aspect of the EU , a true believer , all roads lead to Heaven via the EU . Forgive my saying , as I read your opinion of EU matters , the propaganda is there and you believe it all .
I have to say that I often have you in mind when I write of doom and gloom , the end of the EU . You have written , how much you would like to see Britain join the single currency . Perhaps you don't remember Black Wednesday . Both Labour and Conservative Parties have said they would have a referendum , if the government decided conditions were right to join . I think there is little chance of Britain ever joining the Euro .
As to the points you made in your above post .
I understand that the subject is Greece that is virtually bankrupt and may not be able to pay her debts . Is that not Insolvency ?
I did not say that mediterranean countries cannot compete with the Euro .
Industrially they are not a match for Germany ; one size does not fit all . Being members of the single currency took away their ability to compete , selling cheaper goods .
Yes , In Italy the cost of living rose 30% in the first year of having the Euro . It subsequently increased to 100% over the next year or so .
Houses that had previously priced at Lira300,000 became Euro300,000 , a huge difference .
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MAII
Re #42
The trouble with all those "..thrills.." is that this wretched EU is so embedded in the Political-Leadership mindset and there's so much venal interests and corruption eminating from Brussels it may well take the 'spills' of Citizens' blood to finally throw off this nightmare.
Barely 1 in 4 European Voters has supported the EU in the last 3 EU Parliament Elections: Yet, the EU is actually more authoritarian and more powerful despite a complete lack of Citizen Mandate!
For how much longer can the EU bodies go on ignoring and riding roughshod over this immense Democratic Defecit within the EU?
There are really divisive problems ahead for this institution and Europe as a whole: It is not too late for a fundamental rethink by the EU Leadership at National and supra-National level.
Just last weekend on the BBC World News 'Europe on the Record' programme, 5 MEPs sat openly discussing the "..next EUropean Treaty.."!
Are these people completely delusional? How can they conceive of another EU Treaty when less than 45% of Citizens gave any kind of Mandate to their own Parliament?
The 'Constitution' was rejected even by confirmed EU Nations: It took another 7 or so years for the Lisbon Treaty to get through & that only because no Government, bar Eire, dared put it to the Citizens' Vote!
However, I fear these pro-EUropean leaders are so deeply into the enormous 'power'/'prestige'/'profit' motives of the EU they are blind to the inherent dangers of an old adage, 'A House divided against itself cannot stand'.
"..thrills.." I reluctantly suggest may be the least of the reasons the World may in the decade ahead, once more, come to focus on Europe falling apart.
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Sir,
May I (as a Greek living in Paris) beg your attention (and this of your readers perhaps)in denouncing the biggest financial "Myth" ever created in the European space, which consists to convince Europeans that "the Greeks are eating , with golden spoons the funds , provided by the EU , and spending them shameslly !!!!..."??
Here are a few facts , why, I think, it is not founded this impression :
The last decade,the principal state investments and their constructors , in the Athens area are :
-The Athens International airport :The German HOTHCLIFF
-The Athens Metro :The French RATP+ALSTHOM
-The Athens Tramway:ALSTHOM
-The Athens peripherical motorway : The French VINCI.
Those are the companies (and their respectiv national economies and shareholders )which are, at the end , the happy FINAL beneficiars of the billions alloted by the EU to Greece.
Last but not least : In Greece , even the schoolchildren are aware of the fact, that one of the cornerstones of your CITY'S econmical power is the greek shipowners (allow me to remind you that the Greek Flag commercial fleet , in tonnage and numbers, is the no 1 in the world) and their accounts and their billions are in your banks (and unfortunatelly not in Greece!) .
So , please ,stop contributing to the disgusting speculative international rush of the funds (and of your golden boys in your banks, who shameslly make fortunes by "producing" what ??"papers"!) , which are voraciously "eating the flesh and bones" of the Greek economy ...
Today is Greece ..Portugal, Spain , Italy etc, are just around the corner...
Best Regards
c.d.Lycas
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"The last decade,the principal state investments and their constructors , in the Athens area are :
-The Athens International airport :The German HOTHCLIFF
-The Athens Metro :The French RATP+ALSTHOM
-The Athens Tramway:ALSTHOM
-The Athens peripherical motorway : The French VINCI."
I had exactly the same thoughts when I was in Lithuania.
I saw a lot of "development projects", and they were all being built by french and german companies. All of them.
And a lot of them were completely useless. I saw new town halls being built right next door to existing town halls. New libraries being built right next door to existing libraries.
Meanwhile, the farms were being allowed to deteriorate to the point where billions of dollars of infrastructure was lost.
And now the french and germans have forced the closure of a nuclear power station. The solution? Build a french designed power station!
The EU is a wrongful and fraudulent organization, and it is very much a way of creating wealth for german and french corporations. And scandinavian banks.
It is openly predatory, and exists as a means of generating wealth for the aristocracy of old europe.
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Re "The EU is a wrongful and fraudulent organization, and it is very much a way of creating wealth for german and french corporations. And scandinavian banks.
It is openly predatory, and exists as a means of generating wealth for the aristocracy of old europe."
And when I go to my supermarket I can not buy non-greek feta anymore, because that evil EU has limited the word 'feta' to goats cheese coming from greece!
I tell you, the real puppetmaster behind this evil EU is the greek society of feta producers!
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@43 - Huaimek,
Yes I'm pro-EU!
My post pointed some false statement in an earlier post.
I still find it imposible to believe that inflation in Italy has been running at 100% for the last 10 year after an initial 30%. If houses is what you are refering to, then please please blame the Euro for houses in the UK also going up in the last 10 years. You keep saying Greece, Italy, Spain, etc. need to devalue to compete, I point out to you that if the 3 Euro an hour for a doctor is true the problem is not that they are too expensive. About the insolvency thing, that statement is still false. They are not!
Now us been in the Euro yes, I know it will not happen any time soon. would it make my life easier if we were in yes it would! Would we as a nation be better off if we were in the Eurozone? Yes, we would.
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democracythreat, of course the best way is to invest into education and technology of locals so that they could build all airports and whatever new they want for themselves. But here clash two competing approaches in one EU - that all is inter-changeable - airport here, feta there, a common market exchange AND still individual countries' interests. From indiv. countries' interests point of view it is good and justified for France and Germany to have their economies healthier by applying their construction skills elsewhere. From individual country Greece point of view this is bad of course. From the common market of the EU perspective this all doesn't matter who builds what, all the same within one and the same "EU economic power".
Only EU is still not one country, so it's a bad consolation "nevermind who builds, all own, homely, within the EU economy". With participants of different weights the injustice becomes even more visible.
The idea is I suppose that on seeing foreign technological investment the lesser weight countries will eventually upgrade themselves to heavier weight participants' weight. Become heavy-weights themselves.
I wish it is so. But how exactly miraculously this will happen isn't very well specified, in the EU rules :o)))
I wish someone writes a good chapter on it, some place, explaining the path to the better future. Will give peace of mind to both the richer and the poorer participants of the scheme.
_____________
Have you seen that? A British attempt to ridicule Serbia, over "religion, fairy-tales, superstitions and draughts"? I presume it's all ranking in one and the same category for the advanced British journalist, or, as min., that's the impression he intended his article to convey. Typical 1850-s "So here I am in India, let me tell you how odd the locals are" approach.
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/8496801.stm
Personally I found it curious that there is Europe between us for a thousand years with zero to none comms btw Russians and Serbs occuring, and still we entertain the same superstitions, nearly one to one!
Clearly pre-Christian slav large population times' left-over. (Only Russia has far more many rules to follow in everyday life :o)))) (But may be Serbia does as well, how would that British chap know).
A cheap move IMO to sum it up type "Serbia eagerly looks to the past because has no clear future, or a far more narrow path ahead of them, so they get forces in looking into the past."
Hastings and "we shall fight on the hills" the British don't refer to never, presumably. That's Serb's behaviour strictly characteristic to Serbia, possessed with scare of draughts ruinous to health. Aha.
_________________________________________
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And oj, the "Breaking news" of the last hour say we might need to pick up Transdnistria on board after all.
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@50,
where abouts is that?:))
the litle part next to moldovia?
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cbw
"For how much longer can the EU bodies go on ignoring and riding roughshod over this immense Democratic Defecit within the EU?"
The EUSSR will eventually collapse as a result of bankruptcy just the way the USSR did, not as the result of political pressure. Russia recovered to the extent it has because of its oil which it exports at around $70 a barrel (a few years ago as high as $150 a barrel) and natural gas having a captive market in Europe. What will the Europeans sell to the world when the EUSSR implodes.
It is interesting that when looking at the GDP of the relatively more successful economies of France and Germany, much of that is reflected in exports to other EU countries which evidently are of no value, eg. redundant town halls, libraries etc. built in Lithuania. Taken as a whole, this would appear to be an internal transfer of wealth. It is one thing to build new infrastructure that is needed or keep old infrastructure in repair, it's quite another to waste money just to keep contractors busy making money on things that are not needed. This is one more example of why the numbers alone don't tell the full story of the EU non-competitiveness with the rest of the industrialized world.
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Re "The EUSSR will eventually collapse as a result of bankruptcy just the way the USSR did, not as the result of political pressure. Russia recovered to the extent it has because of its oil which it exports at around $70 a barrel (a few years ago as high as $150 a barrel) and natural gas having a captive market in Europe. What will the Europeans sell to the world when the EUSSR implodes."
One small problem with your fairytale-analogy is that the EU as an international organization can not go bankrupt the way you put it.
Nice try cowboy!
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ChrisArta wrote:
@50,
"where abouts is that?:))
the litle part next to moldovia?"
Hey, back off with your high and mighty attitude to Transdnistria. I know folks from there, and they aren't all bad. Anyways, what is moldovia? That little part next to Romania? And what is Romania? That little part next to the EU?
It is the little parts that make the world a great place, chris.
And I lied about the folks i know from transdnistria. They are pretty much all bad folks. Life there is hard. People are pretty mean spirited there. I saw a sign there which made it clear that hand grenades are not allowed in nightclubs. interesting place.
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@54
Is that policy similar to one in "posh" nightclubs where sports shoes are not allowed? :))
Well allowed really if you in the company of 2 - 3 good looking girls.
Similar to UK forgein policy, we don't deal with dictators and we fight them, unless they are the Chinese communist part we'll do anything for them, just tell us jump we'll ask how high!
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ChrisArta, Transdniestria is a stripe on a side of us, Moldova dnd Ukraine. I think they look like a narrow stripe, and they don't have exit to the sea :o(
Therefore we aren't interested in them :o)))) but they are in us, they are quietly lost in times poor folks consider themselves Russia, and not only "Russia" but the Soviet Union times Russian Republic.
As it is now it all more or less suits everyone, they are industrial narrow stripe of Moldova (on Moldova side stayed agriculture exclusively), Moldova allows them to sell things like wine or something ww under "Moldova made" brand, Transdniestria likes Moldova for that permission to use their export routes and Moldova Customs' (themselves they are nobody, in int'l terms, un-recognised, can't sell anything).
Moldova, in its turn, hopes that Transdnistrians wake up one day and understand that USSR doesn't exist any longer, and peacefully join up Moldova, and Moldova will be bigger.
Romania hopes to eat up Moldova, because to be honest all the three are one and the same thing, so Romania hopes to eat up Transdniestria as well.
What prevents the happy union is that Transdniestria remembers that in the old time Romania there was an industrial wealthier part (modern Romania. city-dwellers) and their peasants-slaves of the 2nd sort citizens (Modern Moldova and Transdniestria). And that one sligh difference nationality (Romania) always exploited the other slight difference nationality (Moldova and Transdniestria). And they think the old scenario will take place again, and no EU will stand up for them.
That is, that big Romania population will be again split into 1st sort and 2nd sort, in promotions, in work obtaining, etc.
It is true, Romanians do look down at Moldovians and Transdniestrians as lower caste beings, still.
Besides, they saw how it is in Germany put together of two parts, which didn't srike in them confidence.
And, besides, of course Russia sells gas and oil to Transdniestria and Moldova cheap, which won't be the case when both become The EU.
What's our interest in the affair can't specify :o))) just a tradition by now, and why not - they never blamed us in anything like other neighbours, and to the opposite were always very friendly post-USSR collapse. Which is a pleasant difference. With Russia they don't even border. When separated Moldova tried to take them by force - Russia intervened and fought Moldova back. Early 1990-s. But Transdniestria fought for itself quite well, must say, hand grenades :o)))) and tanks and what not. They were using all Sov. times hardware that stayed on their side when Moldova separated. All the military stocks of USSR happened to be located on Transdniestria stripe. They are loaded with explosives still, live on boxes with grenades and bullets and rifles, that's why we able to say Moldova a big NO, when they decided to grabatise them.
So, I think that "no hand grenades" sign is true, and good if only "no hand grenades", can easily be "no aviation bombs with :o)))) or "don't come in personal tank"
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Even better description of Transdniestria is:
That part of the Soviet Republic of Moldova where, at the time of USSR collapse, were located Western ware-houses of the Soviet army.
And whose local chieftains, of various calibre, had decided it's better to use the revenues of the sales of the above stocks themselves, rather than share them with other chieftains within the greater Moldova.
And announced independence.
Now, better than that! They announced themselves "The Russian Federative Republic."
To say that the Russian Federative Republic itself was pleased - is to say nothing :o)))))
But, of course, with a certain degree of bewilderment :o)))) because for crying out loud they were never once in history "Russian Russia".
The feeling, Chris Arta, is, how to explain to a British :o)))) If when you let Hong Kong go, a part of it will announce itself "England".
And ran referendums in the 20 consequitive years, year after year, when each year 97% of that piece of Hong Kong population votes: "We have thought about it again and we confirm we are England." :o))))
Or part of India, for that matter.
And the first 5 years they indeed lived exclusively on selling arms. An unknown arms' world exporter for you! :o))))
Moldova thought it's a disgrace and tried to grabatise them by force, we send there soldiers (all equipment LOL was already there) and repelled Moldova.
That's how Transdniestria came into existence. A side Soviet Army stocks un-expected by-product.
Now, that is history, but the important thing is as well their self-feeling, and as Transdniestria happened to have highest concentration of Russians at the time of separation (around military stocks and whatever paper factory, small things that worked there, small businesses) - they feel superior to both Moldovians and to say nothing superior I am afraid to Romanians as well.
They'd join Moldova if it promised to never join Romania.
But Moldova shows all signs it will.
Accordingly, an idea for Russian Transdniestrians to ever report to Bucharest, of all places :o))))) is same appealing as ? how to explain to a British ? :o)))) as for you to report to Karachi.
:o)))))
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I think Transdnistrians share Garry Kasparov logic.
He was in TV, quarreling with clearly Kremlin-put up journalists (2)
(against 1) in the studio, shouting at him two at once. "Why are you here?! You are Azerbajanee. What have you got in common with Russia? Why do you come here and arrange protests and cause havoc in our streets - go and improve and fix own Azerbajan! You are a foreigner. Your Azerbajan had separated from us. So why its revolutionaries come over here?"
To which Kasparov :o))) stubbornly repeated "Excuse me! I am a citizen of the Russian Empire. I was born in the Russian Empire and live in the Russian Empire, and Russian Empire business is my business, I won't allow anyone to spoil the country!"
To which journalists shouted at him "You were not born in any "Russian Empire! It ceased to exist in 1917! You were born in the USSR!"
- This is the Russian Empire, one to one!
No! You were born in the USSR, and are a citizen of Azerbajan, get lost go home! There isn't any "Russian Empire" anymore, there is simply Russia.
- You'll be telling me where I live and lived and was born! What have you done for your country, you were not even born yet when I was standing up for it in int'l chess tournaments, I played - for my country - and it is "The Russian Empire". And will be, while there are citizens of it! And I won't allow some idiots to monopolise power in it and hijack it!
etc.
An un-usual glance at the problem, but, I guess, he is brainy, after all.
Funny I thought, the EU likes to tell it's ever closer union, etc. While many still mind old places and, kind of, feel attached to particular spots.
While in our partitions all are told at home "it is your partition, that other partition is not your partition" - :o)))) LOL, while say some feel it is one mysterious country.
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ChrisArta
Perhaps it pleases you to misread , misinterpret , misquote what I have written .
The subject is Greece , deeply in Debt , may be unable to pay debts .
" Insolvent "
I have lived in Italy , another country in dire financial straights .
I never mentioned Inflation or sugested that the cost of living had been rising by 100% a year for 10 years . The cost of living rose , with the increased value of the Euro from the Lira , 30% in the first year . Over the next two or three years the cost of living had risen 100% from the change over date .
That seems clear enough to me .
You may favour the Euro and believe that Britain might be better off with the Euro . It is a matter of opinion , I , and many other British people do not share your view . I believe most British people would prefer to be poorer , but independent from the Euro . Most British people want no further integration with the EU . I think it unlikely Britain will ever join the single Currency .
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Re58: WebAliceinW... Kasparov is known to have received US support. His business is not at all in Russia - when he wants to play a role there he simply interferes. His remarks
I find it amusing that the US chose a chess grandmaster to go out and talk - ironically +30 years ago they had "lost" their own chess grandmaster, Bobby Fischer who denounced his US citizenship and became one huge critic of what he called the totalitarian US regime after the US government tried to stop him for some really low-importance reason going to Jugoslavia and playing with Karpov in a match that was not even any major international event (Bobby and Anatoli wanted the match more for the pleasure of playing one against the other). Bobby went, then the issue got inflated, and the government accused him of tax-evasion and simply stripped him of his money (the question is 'why on earth did they see this tax-evasion all those years before and found it only after this event?). Bobby replied by denouncing his nationality.
So Kasparov just follows the trend it seems. But Bobby was American. Kasparov is not Russian but Azerbaitzani, a country that is anti-Russian and pro-Turkish so really his voice in Russia, as well as to the rest of the world is of absolutely no importance. (let alone he lost to deep-blue for the money... it is not the first time he goes out to tell lies...)
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