The PIIGS still fly

[thriftyandboringinohio]

Five years ago we were all anticipating the demise of the Euro.
Things were bad, and it was obvious that countries in southern Europe would bring down the whole EU.
The fashionable buzzword was "PIIGS", indicating Portugal, Ireland, Italy, Greece, and Spain.
Two quotes from that time still resonate with me. First is iTulip's EJ, who said:

...The euro zone member states locked themselves in a cage in 1999 and threw away the key. A fire erupted in the cage after elections in Greece last fall. ..

The other was from Mario Draghi, president of the ECB, who said:

...Within our mandate, the ECB is ready to do whatever it takes to preserve the Euro. And believe me it will be enough..

Here we are five years later. The Euro stands. Interest rates are pretty reasonable for bonds in Italy, Spain, and Portugal.
Yesterday Greece floated 3 billion euros in new bonds, and investors snapped them up at under 5% yield.
Remember the "Troika" - IMF, ECB, and Germany -lording it over Greece imposing harsh policies doomed to fail?
Germany turned a profit on their loans to Greece and Greece appears stable now.

Self-refection can be profitable when we adjust our old incorrect views.
While the PIIGS fly on, maybe we should talk about how we got that one wrong.

[jk]

Re: The PIIGS still fly

i think that's a great question, and a difficult one. the situation certainly appeared dire enough. i think we expected the greeks to pull the ripcord, or rebel against the harsh regime being imposed. and although they made noises to that effect, ultimately they folded. greece, in the meantime, is too small a fish to precipitate a systemic crisis. spain and italy are more important, and italy at least remains in play. [i haven't been following spanish politics to comment on that.] so it ain't over til it's over. the eurozone is still not a natural currency area and the north-south problems remain unresolved. everything takes 10 times longer than we expect. otoh, there's that "gradually, then suddenly" quote.

[dcarrigg]

Re: The PIIGS still fly

Five years ago we were all anticipating the demise of the Euro.
Things were bad, and it was obvious that countries in southern Europe would bring down the whole EU.
The fashionable buzzword was "PIIGS", indicating Portugal, Ireland, Italy, Greece, and Spain.
Two quotes from that time still resonate with me. First is iTulip's EJ, who said:



The other was from Mario Draghi, president of the ECB, who said:



Here we are five years later. The Euro stands. Interest rates are pretty reasonable for bonds in Italy, Spain, and Portugal.
Yesterday Greece floated 3 billion euros in new bonds, and investors snapped them up at under 5% yield.
Remember the "Troika" - IMF, ECB, and Germany -lording it over Greece imposing harsh policies doomed to fail?
Germany turned a profit on their loans to Greece and Greece appears stable now.

Self-refection can be profitable when we adjust our old incorrect views.
While the PIIGS fly on, maybe we should talk about how we got that one wrong.

I think in the end things ended up how they are for a few reasons:

1. Much like a subprime car dealership, they stretched out the terms beyond historic norms. 72 month loan on a used car? Bad credit? No problem!
2. In Italy and Greece they baldly defied democratic and legal norms and unilaterally installed bankers as leaders in Monti and Papademos without a vote (or a revolt).
3. The Irish and the Portuguese voluntarily took their medicine. The Irish worst of all. To the tune of 9,000 euro per person.
4. In the end, whether the medicine was forced or taken voluntarily, the austerity has worked its magic. There are fewer than half the hospital beds per person there were before the bailouts, for example. The life expectancy, health, education and other declines in metrics will take years to show up. But they will be real. Ireland had 9 beds per 1,000 people in 1980. It has 4 today. The UK has 10. The US has 9. Greece is down to 3. Portugal is nearing 2. These little stats cause real human suffering. And lots of them are all going to hell either way. It just turns out people are willing to take it and nobody has the will to fight. By the way, Iceland? They told the banks to screw and they're still at 10.

There is real pain going on. But it's being felt by the people they don't care about. Workers. Nurses. The sick. The elderly. The proles. It ain't like the billionaires aren't flying to the US for private concierge medicine at Mass General anyways. I bet the real future in private space travel is 2 hour medevacs from Dubai to Boston.

http://www.iaem.ie/wp-content/upload...ing-160117.pdf
http://www.irishmirror.ie/news/irish...spital-8773475
http://www.irishexaminer.com/breakin...ds-753007.html
https://www.irishtimes.com/news/heal...rugs-1.3087705
http://www.independent.ie/irish-news...-35727959.html

[Woodsman]

Re: The PIIGS still fly

...There is real pain going on. But it's being felt by the people they don't care about. Workers. Nurses. The sick. The elderly. The proles. It ain't like the billionaires aren't flying to the US for private concierge medicine at Mass General anyways. I bet the real future in private space travel is 2 hour medevacs from Dubai to Boston.

Theo: "A hundred years from now there won't be one sad ufck to look at any of this. What keeps you going?"
Nigel: "You know what it is, Theo? I just don't think about it."

[GRG55]

Re: The PIIGS still fly

Five years ago we were all anticipating the demise of the Euro.
Things were bad, and it was obvious that countries in southern Europe would bring down the whole EU.
The fashionable buzzword was "PIIGS", indicating Portugal, Ireland, Italy, Greece, and Spain.
Two quotes from that time still resonate with me. First is iTulip's EJ, who said:



The other was from Mario Draghi, president of the ECB, who said:



Here we are five years later. The Euro stands. Interest rates are pretty reasonable for bonds in Italy, Spain, and Portugal.
Yesterday Greece floated 3 billion euros in new bonds, and investors snapped them up at under 5% yield.
Remember the "Troika" - IMF, ECB, and Germany -lording it over Greece imposing harsh policies doomed to fail?
Germany turned a profit on their loans to Greece and Greece appears stable now.

Self-refection can be profitable when we adjust our old incorrect views.
While the PIIGS fly on, maybe we should talk about how we got that one wrong.

Not sure we got that one wrong...maybe too early to tell. Yet.

Most recent youth unemployment rates that hardly smack of success, and suggest perhaps otherwise:

Euro Area - 18.7%

Greece = 45.5%
Spain = 38.6%
Italy = 35.4%
Portugal = 24.0%
France = 21.6%

Q: How could the Euro Area be so low?
A: Germany = 6.7%

Methinks the centrifugal forces are still at hard at work, while Mario & Co. continue to do whatever it takes.

[llanlad2]

Re: The PIIGS still fly

Not sure we got that one wrong...maybe too early to tell. Yet.

Most recent youth unemployment rates that hardly smack of success, and suggest perhaps otherwise:

Euro Area - 18.7%

Greece = 45.5%
Spain = 38.6%
Italy = 35.4%
Portugal = 24.0%
France = 21.6%

Q: How could the Euro Area be so low?
A: Germany = 6.7%

Methinks the centrifugal forces are still at hard at work, while Mario & Co. continue to do whatever it takes.

The political strength and support of the EU project were and still are much greater than any of us anticipated. The EU populace still broadly supports the idea even though they recognise the damage it has caused. The majority are still pro-EU despite the EU! From what I understand even the Germans will make sacrifices if push comes to shove in order to save the project. This is pretty much accepted amongst their business leaders and populace. Brexit may even strengthen the EU project as the UK was always a fly in the ointment when it came to increased political ties.

[gnk]

Re: The PIIGS still fly

The political strength and support of the EU project were and still are much greater than any of us anticipated. The EU populace still broadly supports the idea even though they recognise the damage it has caused. The majority are still pro-EU despite the EU! From what I understand even the Germans will make sacrifices if push comes to shove in order to save the project. This is pretty much accepted amongst their business leaders and populace. Brexit may even strengthen the EU project as the UK was always a fly in the ointment when it came to increased political ties.

Reporting from Greece:

I'm not surprised by the EU's survival, I figured they would do what it takes and I'm still pro EU, despite all the negatives that come with it. One only needs to keep in mind Europe's millenial - old ugly and violent past to see that a United Europe is better than a divided one.

Greece is still plugging along. Ironically, with a self described Communist, the most stringent Neoliberal measures have been approved, though implementation may be another story.

The local airport has been purchased by Fraport. I'm positive about this development. It may actually be managed well like a real airport with growth in tourism in mind instead being just another expensive government jobs for votes program.

But as I said countless times in countless posts - Greece is in a category all by itself.

[santafe2]

Re: The PIIGS still fly

Not sure we got that one wrong...maybe too early to tell. Yet.

Not sure I've got much to add to the Euro Zone discussion as we have our own self imposed US issues. We just returned from our summer vacation in Canada and all of us were amazed with how vibrant and positive everyone is. My kids are most proud of their Canadian 150 buttons and tee shirts that say "Nice". We in the US are going in the other direction.

[chene]

Re: The PIIGS still fly

It will take time but the story is not over... the root problems are still there

I disagree with steve keen on one point. The right extrem will not win ... the left will ( it is possible that big social mouvements will disrupt the whole thing in Europe )

[vt]

Re: The PIIGS still fly

Both the left and the right are finished. The left is completely bankrupt, and large central governments work poorly in a knowledge economy.

The right can't get support from the people, plus is bereft of methods to grow the economy.

Both will be replaced by non crony, free, growing markets spurred by demographics and rapid technological change.

[GRG55]

Re: The PIIGS still fly

Not sure I've got much to add to the Euro Zone discussion as we have our own self imposed US issues. We just returned from our summer vacation in Canada and all of us were amazed with how vibrant and positive everyone is. My kids are most proud of their Canadian 150 buttons and tee shirts that say "Nice". We in the US are going in the other direction.

The Maritimes again this year?

[chene]

Re: The PIIGS still fly

Both the left and the right are finished. The left is completely bankrupt, and large central governments work poorly in a knowledge economy.

The right can't get support from the people, plus is bereft of methods to grow the economy.

Liberal are over but not progressive...and far from it!
Just check the popularity of sanders in US and corbyne in UK...

Both will be replaced by non crony, free, growing markets spurred by demographics and rapid technological change.

So "free market will do good to people if government is out of the way , in a free trade environnement" ...

That is exactly this fairy tale that had been sold for decade to the people that is going to end !

Why ? because it is not backed by facts and people start to notice it.

A) All technologies that are profitable today had been heavily subsidizes for years by government (read Noam chomsky on this). In reality, what most people start to realize is that very few industries can develop without big government money and a very moderate competitive environment (to protect their profit).

B) Big profitable company does not mean big employer and great salary for people. Google for instance is ridiculous as an employer (number of employee) compared to its profit...

Sorry but a "free market" is a complete jungle. Nobody wan't to live in a jungle ...
Hopefully people won't fall into that b***t anymore...

[dcarrigg]

Re: The PIIGS still fly

It's not worth your time to try to convert true believers in anything. Best to just let them worship Mammon and pray for the destruction of man and his total subjugation to His one true profit, The Market. The business lobby did a hell of a job when they invented the term "free markets" in the 1920s to cover up their BS. Now Market-worship is the worlds' biggest and fastest growing faith. Markets are no longer a theoretical construct used to explain price setting by curious academics trying to honestly understand human material trade interactions. "The Economy" has been as totally anthropomorphized as Zeus and is just as feared and revered. And "the Free Market" is the same.

True believers don't believe in Market failure, because Market is God. Therefore the Market cannot fail. The Market can only be failed. Free Markets to True Believers are by definition Good--they are all powerful, all knowing, and everywhere. Omnipotent, omniscient, and omnipresent. For thine is the kingdom and the glory, for ever and ever. The only hope is that the children of the true believers begin to question their faith...at least enough to bring back polemics, if not sufficiently to turn their backs on the Golden Calf once and for good.

See, the thing about the Golden Calf is that they trick you by getting you to look him in the face. It's around the other side the real magic is happening, though. Merda taurorum animas conturbit.

[vt]

Re: The PIIGS still fly

Socialism and communism are what has failed us for well over 100 years.

Venezuela in spite of the world's greatest oil reserves and bountiful farmland. Russia and countless others. Plus the left murders millions and millions.

Just because free markets are having a demographic slowdown you guys bring out the tired refrain of failed socialism and larger central government control.

If its not socialism and communism what grand plan can you offer that can do better than free, competitive, fairly regulated markets? Are you afraid of a little competition? Is it you don't want to give up all knowing government control?

[chene]

Re: The PIIGS still fly

I apologize if my post was ambiguous. My point was not to initiate a political debate on what system the world should have. In that regard, it would be nice to let people of each country decide... without any destabilization if they do not have the "right" one ....

Basically my point is in the video below. That is why I am worried about European countries (and I live in Europe by the way).... on the other hand, I think that big investment from government is very important for US.

Money is created in two way :

- through private debt (but a slow down in the pace of private debt creation can trigger and accelerate recession)
current level of private debt is already too high about everywhere that is why the salvation won't come from there

- through government debt : governement deficit is private sector stimulus