2015 - Greece drops Euro?

[touchring]

Re: 2015 - Greece drops Euro?

Sihanoukville in Cambodia is pretty nice and cheap, albeit light in western infrastructure. The airport is supposed to start taking 737 and Airbus equivalent "soon".

Oh yes, I forgot about Cambodia.

[touchring]

Re: the primary surplus

Hong Kong has one of the longest running surpluses, and Singapore is close. However, these island nations are afflicted with governments that actually do long term planning.

Long term planning?

Not sure about HK, but the real fertility rate among citizens in Singapore (minus foreigners) is less than 1.

For every 2 persons, there's less than 1 child. Japan is at 1.4, NZ is over 2.

[gnk]

Re: Capital Controls coming to Greece?

Well, it looks like Syriza did the predicted backflip. Things look to be stabilizing, for the next few months at least.

Hardcore leftists are livid, there is a slight chance that Syriza, a coalition of leftists, could break up. Funny thing is many free market supporters here are ecstatic, yet cautious. Many friends of mine are pleasantly surprised at the final reforms Syriza has chosen to undertake. I'm happy too, with the reforms.

I think Tsipras may have the opportunity of a lifetime - to emulate Brazil's Lula. My only doubt is based on the fact that he does not have a business background. But, nonetheless, he wants to fight corruption and streamline government and has put forward many reforms that no other political party in Greece would or could ever suggest, let alone accomplish. His "outsider" background gives me hope.

The Euro project continues, not beaten and scarred, but stronger. It was good seeing the other 18 member states act as a cohesive unit during these negotiations. It wasn't just about Germany as the media likes to portray. It was truly a cooperative, all on the same page, so to speak, effort. Even small, recent entrants such as Slovakia, Lithuania, and Estonia had their say.

If the reforms are implemented, Greece will grow its economy, despite the austerity. Corruption and government incompetence has been a severe drag on the Greek economy for decades. I think this is the real story, and many people that have not lived in such an environment as Greece's don't get it. I didn't until I moved here. Many project their own life experiences when formulating an opinion. And in doing so, they may underestimate the value of a stable legal system, property rights, and a functioning government, somewhat free of corruption, when they formulate an opinion on Greece's plight. There are no metrics for measuring such intangibles, but I have seen firsthand the deleterious effects on an economy when such things are sorely lacking.

Greece's economy has been handcuffed for decades. When it seemingly functioned, it was really only functioning due to tax avoidance, EU grants and subsidies, and out of control government deficit spending. When that gravy train stopped, as such unsustainable practices do, the effects were devastating.

The media and many commentators erroneously framed the story as a David vs. Goliath, Austerity vs. Keynesian economics meme. Ignoring the incompetence and corruption that is endemic in Greece is a fatal flaw in their reasoning, in my opinion.

It's not just about pump priming economics, as I have stated all along, but reforming a government and an economy; to bring Greece up to EU levels. Greece must function as a European state before the debt is addressed, IMO.

I'm not a big fan of Greenspan, but here's a quote I think deserves mentioning:

Corruption, embezzlement, fraud, these are all characteristics which exist everywhere. It is regrettably the way human nature functions, whether we like it or not. What successful economies do is keep it to a minimum. No one has ever eliminated any of that stuff.
Alan Greenspan

Here's a link to Varoufaki's email to the Europgroup. For many Greeks, many of these reforms are actually exciting and "revolutionary." In most other western countries, they merely form the dull, unnoticed, yet indispensable foundation of a Western free market economy.

[Polish_Silver]

Re: 2015 - Greece drops Euro?

I believe the question should be "Can Europe survive another 5 more years of austerity?"

If the alternative is more lending, even larger unpayable debts, and artificially low interest rates, then I'd say the alternative is worse, in the long run.

If the alternative is debt forgiveness, and balanced budgets from here on, that might be a good choice.

But I haven't heard Greece ask for that.

[don]

Re: 2015 - Greece drops Euro?

Hudson on the 4 month extention

[gnk]

Re: 2015 - Greece drops Euro?

I used to be a big fan of Michael Hudson, especially after the Mortgage meltdown and how it was handled. Actually, the GFC has made me become an avid reader of all things economic, and I still find Hudson informative, to a level. I had a world view, and anyone that espoused that same world view was on my reading list.

But we also live in the ten minute summary of things that happened. Short articles, video clips, forum posts, etc... all try to encapsulate a complex story. The storyteller more often than not chooses a global economic event and selects the facts and conclusions that support his/her world view and proceeds to spin the yarn. It has to be a really good "human" story, because in the end, we are all either selling or consuming print.

Regarding this interview, I'll just say that a lot was left out. Of all the articles about Greece that I have read so far from prominent analysts, not one has lived here, and it shows in their analysis.

Greece was Tammany Hall, on a national level. And every Prime Minister, starting with Andreas Papandreou in 1981, was Boss Tweed. It was pervasive. The Unions were extremely powerful and corrupt - they were a huge voting bloc. The greek "oligarchs" differed with the common people only in magnitude with their corruption. I think it makes for a fascinating story. There were corrupt Socialist and Capitalist elements in all levels of society. Unfortunately, most analysts disregard these parts of the story. Better to talk about evil bankers, evil Germany, evil Brussels, vs. poor labor, poor small country, and poor middle class. After all, those are memes that are easily recognized by the consumers of media.

[lektrode]

Re: 2015 - Greece drops Euro?

....
Greece was Tammany Hall, on a national level.....

best '2 second summary' eye've seen to date.

[Polish_Silver]

Re: 2015 - Greece drops Euro?

Both excellent points, gnk.
The primary surplus percentage is totally absurd. Only a tiny handful of nations have ever held at 3% for a few years, and most of them discovered oil, like Norway.

I suspect the targets were very aggressive so that the cost cutters had some room to bargain down and appear reasonable. Germany itself is no where near 4.5 % primary surplus, I don't think any country in europe is.

I think Greece needed to make changes. Whether it's primarily a problem of tax non-payment, as Hudson alleges, or over generous public sector, it's probably a combination. I have yet to hear Hudson criticize a nation for a too large or too generous public sector, and yet I think there are examples of this --Weimar Germany being just the most obvious.