Said Alexis Tsipras, the leader of the left-wing Syriza party, which just won "a decisive victory" in the elections in Greece.
“Tsipras won because those who imposed austerity never thought about the effects of such drastic policies that impoverished millions of people,” said Paul De Grauwe, a professor at the London School of Economics and a former adviser to the European Commission. “In a world where people are so hit, they just don’t remain passive. Their reaction is to turn to the politicians who will change the process.”
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93 comments:
They thought austerity was bad. They have no idea. They are going to find out what's worse.
The Greeks just pulled the chain. Swirl, swirl, down they go.
Hope. Watch out, Greece. Voting for Hope isn't what you think it's gonna be.
Yes, faux austerity is so much worse than despotism. The currency wars have just taken a victim.
Who woulda thunk it would be the Lefties who end up breaking up the EU?
Our priority above all will be to restore the country's lost dignity,' Syriza leader Alexis Tsipras, 40, told a rally of thousands of supporters
Whenever you hear a politician talking about "restoring a nation's dignity", that means there's trouble ahead for that country's neighbors. For, phrases like "a nation's lost dignity", I'm sorry, ladies & gents, that's fascist talk.
Oh, and by the way, the neo-Nazi Golden Dawn Party came in third. Greece can now officially stick its head between its legs & kiss its ass good-bye!
Wishing away debt!
Who knew it was that easy?
An anecdote that shows how Greece got into this mess.
One of the managers at the pizzeria I eat lunch at was an older Greek guy. He would often sit and talk with me at lunch (he had a burning hatred of GWB & that made for some interesting conversations).
One day, he told me about how he had bought a house in the village that his family came from in Greece & he would go back for periodic visits.
Well, the villagers all loved their "rich" American cousin, and they said to him "Nick, come live with us all the time. We'll elect you mayor!"
And he said to them: "Do you know what would be the first thing I'd do? I'd put half of you in jail! You're crooks! All of you goddamn crooks!"
Well, that cured the "Elect Nick for Mayor" ardor, let me tell you.
The government will take care of you and people you don't like will pay for is a universally irresistible campaign promise.
The verdict is clear: The Euro is dead currency walking.
I've been planning a trip to Greece this summer. It will be interesting to see what effect this has.
I bet if they just print enough money, their problems will go away.
those who imposed austerity never thought about the effects of such drastic policies that impoverished millions of people,
The austerity did not impoverish anybody...50 years of depending on government handouts did that job.
This is really small beans...Greece has bred themselves out of existence...most likely the Turks will occupy Greece within a generation, two at the most.
They're coming for your taxes, Professor!
Have you ever been to Greece?
"We will spend our way to prosperity!!'
....oh wait, that was Joe Biden.
I think that defaulting, if that is what it truly is, has some very tantalizing potential upsides that may do well for Greece. One of the most important may be cash infusion from foreign tourists into a now very affordable Greece, who can only use their deflated drachmas in country, thus reducing capital flight.
The most important will be they will no longer be able to blame the EU for their backwardness.
Been to Greece. There is nothing there. Athens was built in the 50's and has not moved since. Any old archeology or relics were carted off by the Romans or blown up by the Turks. The place looks like a buzzard picked it over. The islands are a bit different, but are really not worth the trip. In short, Greece's better days were 2500 years ago, and even then it is doubtful.
The article is worth reading.
Tsipras' party did not get a majority vote. He wants to end austerity by basically renegotiating Greek debt with Eurozone members, esp. Germany. If he succeeds in this, other PIG countries will demand the same. If the Euros do not accommodate Tsipris, I cannot guess what will happen. Traditionally, to end an economic downturn, a country would devalue its currency. That would mean leaving the Eurozone, which Tsipras may not have the political strength to do.
Terry: "He wants to end austerity by basically renegotiating Greek debt with Eurozone members, esp. Germany."
He wants to "renegotiate" Greek debt down to zero, with no repercussions.
He also wants the Germans to work extra hard so Greeks can retire at full pension at 45 years of age.
In other words, your standard run of the mill leftist.
Thank God that's happening over there so we can all learn an important lesson without having to actually feel the effects of it.
Thank God that's happening over there so we can all learn an important lesson without having to actually feel the effects of it.
Ha ha ha! The left never learns lessons. They just assume that the failed country "did it wrong or was sabotaged by wreckers." Like Venezuela right now, and so many failed socialist governments in the past.
Communist countries like "North Korea" are calls "pseudo-socialist" when the proper term is post communist inevitable and permanent dictatorship.
For those of us who think Greece is following the model of Cuba and North Korea, this will be an important lesson.
It serves them right for not using a Roman alphabet.
tim in vermont: "Like Venezuela right now, and so many failed socialist governments in the past."
It particularly behooves one to not be an investigator into official misconduct in a "peoples paradise" like Venezuela.
Of course, the prosecutor had it coming due to his long history of colonial oppression of the Venezuelan people.
People who get free shit, want free shit. Nothing else matters.
The Euro was always bound to fail and fail the European Union.
See, this is what I don't get. You can default on the debt easy-peasy, but unless your budget is in balance going forward, you've got to get someone else to lend you money. Or do they just leave the Euro and turn on the printing presses? Shouldn't they be at least a bit spooked by what's happening in Venezuela right now?
I think Europe is going down, and we will not be unscathed. I have done well with my investments over three decades just ignoring current events. But more and more I've been thinking it's time to cash out.
Well the different sinking ships joined up because it looked good and they didn't realize it was just a whole group of sinking ships. So lets just go back to sinking on our own. Because they are actually sinking. The USA is catching up to the rest of the lemmings. Its universal, people like free stuff, more than freedom, more than self respect.
Drachma queens
At one time the ideal of the Greeks was Achilles. Hard to believe.
Of course Achilles idea of economic stimulus involved killing his neighbors and taking their stuff. That tends to be frowned upon these days, not to mention that war for fun and profit has not worked all that well since the 19th century.
It is going to get ugly.
It's amazing how much abuse Greeks took. After decades and decades of amazing growth (outpaced only by Japan and only by a tiny bit), a wealthy country was mutilated by Europe's one per centers and their filthy economics. I wonder what you're trailer parks and ghettos would look like with 25% unemployment and no safety net. You keep up this Tea Party nonsense, you might just find out how lazy, stupid and unproductive your typical American is. The only thing that's stopping the U.S. from sliding into oblivion are Greek immigrants and Hindus and Jews and anybody that's not second or third generation.
"But his biggest promise — and the one that has stirred deep anxiety in Brussels and Berlin as well as in financial markets — has been a pledge to force Greece’s creditors to renegotiate the terms of its financial bailout, worth 240 billion euros, or about $267.5 billion."
The same creditors from whom he's expecting the next tranche of cash. Good luck with that.
Spiros Pappas,
What?
"One of the most important may be cash infusion from foreign tourists into a now very affordable Greece, who can only use their deflated drachmas in country, thus reducing capital flight. "
It might be OK but the Greeks were burning banks in Athens a couple of years ago,.
As far as the comments about Greece not being nice, I have been there and it is beautiful. Athens was great if you like archeology. Mykonos and Santorini are gorgeous and will probably be the least affected by Greek politics. The archeology there is also great.
I have not been to Crete and want to do that.
I will talk to the travel folks and decide what to do. Travel insurance would probably be good here.
I was going to go to Egypt and take my daughter some years ago but they had an earthquake and we cancelled.Now I wouldn't go.
"You keep up this Tea Party nonsense, you might just find out how lazy, stupid and unproductive your typical American is."
Jeez ! Where di you come from ? Nowhere important.
I predict: The Russian fleet based in Greece.
Cradle to grave democracy.
@Spiros,
C'mon, Spiros, tell us about how good your Greek Everyman is about paying his taxes. You know, those taxes that fund the Greek government that was supposed to pay for all that stuff that the Greeks expected from their government.
It may be that Billy Jim McBob Tea Partier is not the sharpest knife in the drawer, but you know what him & all his neighbors & buddies do? They pay their full share of taxes, and on time, too.
Jane: it is believed that the austerity the previous government imposed has put the Greek budget into primary surplus, i.e. if you ignore the interest payments, their budget is not in deficit. However, this probably ignores that tax payments appear to have dropped significantly (possibly as much as 40%) ever since the elections have been called.
"Wishing away debt!"
So Greece won't pay. What are the EU and the IMF going to do about it?
Greeks stole before, they'll steal again. The Germans will find out what it means to lend money to "All of you goddamn crooks!"
And then they hadn't fully reckoned with leftist crooks. Ernesto's dad will show them.
What could possibly be worse than the Weimar Republic? Hitler was not afraid to overthrow it and take bold steps to renegotiate Germany's war debts.
Drago...That was Argentina, where they shot down the Jew loving Prosecutor.
traditionalguy: "Drago...That was Argentina, where they shot down the Jew loving Prosecutor."
Yes, I know.
@William,
Hitler was not afraid to overthrow it and take bold steps to renegotiate Germany's war debts.
I strongly suspect that the Neo-Nazi Golden Dawn Party (& I do not throw the phrase "Neo-Nazi" around lightly) is well aware of Hitler's renegotiation of Germany's WWI debt & that they are using it as a deliberate model for how to proceed.
Does this mean we're supposed to be rooting for Golden Dawn to win more seats?
I mean, between Syriza and Golden Dawn, who the heck are Greeks supposed to vote for?
Let's be clear: folks were marching under straight up communist flags supporting these guys. They are more than just "left wing."
...is well aware of Hitler's renegotiation of Germany's WWI debt & that they are using it as a deliberate model for how to proceed.
Ok, but Hitler and Germany were able to leverage that into an industrial explosion that allowed them to reemerge as a world power.
What do the Greeks produce, anyway? Outside of olives and olive oil, and trinkets? What's their Ruhr Valley? Where's their cultural discipline?
@Chef,
I didn't say Golden Dawn's plan would work, CM. Just that I'm sure the historical parallels have occurred to them.
"This is called bad luck."
Spiros Pappas wrote The only thing that's stopping the U.S. from sliding into oblivion are Greek immigrants and Hindus and Jews and anybody that's not second or third generation.
I had a Greek co-worker once. He was the biggest malakas I ever met.
of course they won. They promised shit they can't afford, and will try to get the solvent part of Europe (Germany) to bail them out again. Same thing here.
While setting up an imminent showdown with creditors, led by Chancellor Angela Merkel of Germany, Mr. Tsipras has argued that easing the bailout terms would allow more government spending.
And let's face it, if that doesn't reassure the creditors nothing will.
@YoungHegelian
Yeah, they really are. I'm glad my Granny can't see this - she survived the German occupation of Greece.
Krugman just felt a shiver go up his leg.
eric said...
Thank God that's happening over there so we can all learn an important lesson without having to actually feel the effects of it.
Why would you think we would learn a lesson from this? Ever read about the financial crisis in Japan in the '90s? started with bad debt at the banks, the government bailed out the banks but didn't make the banks get the bad loans out of their portfolios. The Japanese central bank embarked on a ZIRP policy with their equivalent to our Prime Rate at 0.1 percent. For years. A stagnant economy that couldn't lower interest rates to goose a little inflation when things slowed.
sound familiar?
" You keep up this Tea Party nonsense, you might just find out how lazy, stupid and unproductive your typical American is."
The Tea Party is opposed to profligate government spending. You are aware that that is the source of your problems, are you not?
Actually, this might work out well for them in the long run.
Likely this will result in their exiting the EU and the common currency. Their new currency will float against both the Euro and the Dollar, and become much cheaper than the Euro is now. As a result, Greece will once again become a very inexpensive place to visit and to do business for Americans, British and Swiss. Maybe or maybe not for other Europeans, but certainly for some.
The fact that Greece is so cheap will improve the economy. Since imported goods will be prohibitively expensive, they will have to consume domestic goods, thus stimulating production and agriculture within Greece.
At the same time, they will be unable to pay their external debt. Many of their banks will fail and may well be propped up by international institutions. Their government debt will default, and the Greek government will be unable to borrow money to finance its deficits. Government spending and employment will decline as a result.
There are at least two major potential downsides to this.
First, the bank failure and government debt defaults could spark another financial crisis in Europe. This is unlikely because Greek debt is very small in the overall scheme of things in the European economy. This moment is not entirely unexpected and outsiders are probably somewhat prepared for it.
The second downside is that this works out well for the Greeks, which it well could in the short run. Then other weak European countries might try the same thing. Likely candidates are Spain, Italy and Portugal. Although this ploy might work for Greece, it is not easily replicated by others. The impact of an Italian or Spanish default or exit from the Euro could be large indeed.
Time will tell. But it could work out well for the Greeks if others do not follow them.
If others do, the whole world has a problem. It is not clear that the 2008 Crisis is over. Obama said it was, but we may have seen just a lull. Currency wars can be just as destructive as shooting wars, and indeed can cause shooting wars.
Well, RecChief, some people never learn. That's for sure.
The internet in the 90s hadn't quite exploded yet. Maybe we can count on the internet to help us learn the lesson this time?
At least, some of us. I don't expect the likes of Paul Krugman to learn anything from reality.
Blogger Drago said...
Wishing away debt!
Who knew it was that easy?
Quite easy if you do not care about the consequences. The Greeks think the consequences will fall elsewhere, which is a way of not caring. We shall see.
Our priority above all will be to restore the country's lost dignity,' Syriza leader Alexis Tsipras, 40, told a rally of thousands of supporters
Yeah on who's dime Mr. Tsipras? The EU is not going to bail you leeches out anymore. You're done.
Kaput.
"As a result, Greece will once again become a very inexpensive place to visit and to do business for Americans, British and Swiss. Maybe or maybe not for other Europeans, but certainly for some."
This could be true but Athens may not be the place to be when the balloon goes up. Maybe the islands.
After the Patriots win the Super Bowl, they should celebrate in Greece to experience Inflate-gate.
I have done many Greeks. They have huge cocks but are bad in bed. I have to tell them what to do. Over there, lick my balls, suck my mushroom head.
too much work. I want an expert and the greeks are not experts.
Rubbing Tom Brady's balls.
I guess Greece will soon be a 4th world country. Back to Sparta and the bronze age.
Jane - Greece, which is famous for mythical figures, has projected that it will have a primary budget surplus in 2015.
Whether that will happen or not is unclear, but a great part of their budget deficit now is debt repayment.
The winning party is claiming it has no plans to leave the Euro, and the recently-announced ECB QE plans actually leave a lot for the country CBs. There may be some wiggle room.
Greece can vote against Austerity, but Austerity doesn't give a sh*t.
It's like Gravity that way.
Eventually Greece will drop the Euro and renominate the debts in to the new currency which will be substantially devalued to the Euro. The foreign bondholders will take a haircut on the principle and on the interest rate. Greeks who have private debt in Euros will have those debts substantially eased by being renominated in the new currency. Every Greek who has any money already took his or her money out of the country and if they were really sharp converted their Euros to Swiss Franks or US Dollars.
No one is going to lend them money now but as long as their budget is balance in the new currency they can ease off a bit on the austerity but are going to find themselves suffering from the austerity produced by a debauched currency.
The Greeks just elected a red-brown government that will blow things up as they are and will find themselves eventually having to reform the Greek economy out of desperation-something the Chinese Communist were forced to do after Mao died.
The Euro was a good idea but it has been damaged and perhaps fatally by bad actors. The Greeks are now going to find out why their government can't be trusted with maintaining a stable currency that keeps its value and are going to remember why the adopted the Euro to begin with. I doubt they will get a second chance for a long, long time.
I can't wait for Paul Krugman to explain how it all will work just fine.
The robots can't wait either.
Hmmm. I wonder how much an Acropolis costs?
Is there oil in the Aegean?
Shouldn't that be "vicious cycle?"
Charles V. Payne of Fox Business Tweeted:
"If you think insidious nature of Welfare Utopia gets wake-up call when all money runs out- I give you Greek election results #Morefreestuff"
The Euro was a good idea but it has been damaged and perhaps fatally by bad actors.
If your idea fails due to "bad actors," aren't you giving the same excuse that communists/fascists always give. It is a good system, but it just wasn't done right? Isn't there something wrong with a system without checks and balances that can fail due to "bad actors" and doesn't that mean it's a bad idea?
Just a rhetorical question. The answer is Yes!
The Greek commenter above is full on mainstream Greek opinion. He thinks the rest of the world should get to work paying their taxes so he can get back to his life of full retirement at 45. As other commenters have pointed out, this has been the Greek way for thousands of years. Go steal from the neighbors. Of course it remains a mystery to the Greeks why the neighbors are rich and they remain poor, despite all of the stealing.
Weimar Greece.
Where the Drachma is pegged to the olive pit.
I was flown over to Greece once, to train people.
My one day free I went to see the Acropolis. It was closed by a strike.
Lunch time was sacred for the people I was training, you could not go one minute past the start of lunch. They usually came back late from lunch. They were late getting in to work, but left spot on time each day (2:30!!). The training was done in Summer, and there was no a/c in the room for the first three days. These were all government workers.
The scope of what we were supposed to do -- software stuff -- expanded a lot while we there. Feature Creep up the wazoo!
In summary: Greeks wanted a lot of free stuff, don't want to work a lot, and don't maintain their environment. What a pit.
Greece is stunningly beautiful, especially if you're near the Mediterranean.
Try to stay away from Hotels with British Tour groups. I couldn't help but think of Eric Idle and this skit every time I saw them at breakfast (before they piled onto the bus for sightseeing).
...and while I was in the market area near the Acropolis, I'd see tour guides walk through -- very quickly -- with a little paddle held high in the air as identification. How on Earth did the people in the tour actually see anything in their haste to keep up with their guide?
MadisonMan said...
...and while I was in the market area near the Acropolis, I'd see tour guides walk through -- very quickly -- with a little paddle held high in the air as identification. How on Earth did the people in the tour actually see anything in their haste to keep up with their guide?
This is why we don't take group tours anymore. There are advantages, like having your bus drop you right in front of the Vatican, then skipping the 90 minute line and walking right in. On balance, we prefer going it alone or with a private guide.
Greece is still a nice place for tourists. The highlight of our trip was Meteora. I'd link to a picture, but, really, you have to be there to get the feel of the place.
Many naive comments here.
"The EU is not going to bail you leeches out anymore.
Wanna bet? Bailing out leeches is one of the underpinnings of the EU social model.
"No one is going to lend them money now..."
Oh yes they are. Banks have made money lending to bad actors for a long time, because their governments will guarantee the loans. In other words, you and I are going to lend them money.
They are in the mess they are in because of their lack of austerity in the first place. Greece was one of the worst offenders when it came to socialism turning the country to sh*t. And not they want to double down. Absolute foolishness. Still, it's their country. If they feel so inclined to turn their country into a banana republic, I suppose they have the freedom to do so.
David,
Very good explanation. But I think you downplay the impact of the default.
"This is unlikely because Greek debt is very small in the overall scheme of things in the European economy. "
Yes, but a lot of that debt is held by the other EU weaklings. This will force their hand to follow Greece's lead. Well, unless the Germans and French are crazy enough to bail everyone out. That, of course, will lead to yet another series of economic events.
"Suicide is painless."
Sparta was an Iron Age polity actually.
""The verdict is clear: We will bring an end to the vicious circle of austerity."
And enter the era of abject poverty.
"Greece will now move ahead with hope, and reach out to Europe, and Europe is going to change." [emphasis added]
Pass the popcorn.
Oh, and by the way, the neo-Nazi Golden Dawn Party came in third.
Meh. They're both socialist parties. Syriza toned down its internationalism for a win, and Golden Dawn may just wait for a good night to stage a Reichstag fire...
This is like one of those comedy sketches where the character points the gun at his own head and threatens to "blow the dude away" if he doesn't get what he wants.
This Greek election is just another in a long line of politicians promoting the "Economics of Wishful Thinking". It's a time-proven tactic to win elections. Unfortunately, it doesn't work when it comes time to govern.
Oh yes they are. Banks have made money lending to bad actors for a long time, because their governments will guarantee the loans. In other words, you and I are going to lend them money.
Up to the point where they can't pay.
You are going to watch everybody but the Greeks own Greece.
If you have your eye on a Greek island, better buy it now.
Rusty said...
If you have your eye on a Greek island, better buy it now.
Only if you want it nationalized once they start going after the wreckers and hoarders.
They think they've seen austerity - and maybe they have, a bit. What's coming is more properly called deprivation.
Sounds like the audacity of hope. Sounds like ... a herd of unicorns!
david7134: Been to Greece. There is nothing there.
They must have put a lot of interesting stuff back after your visit and before mine.
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