I do not care who foots whatever couple years down the road. It does not concern nor worry me. I look at themes that play out in the medium term and I told you already I grew tired to interacting with you about topics that may or may not realize in several years. So, please feel free to skip my posts and look for other debating partners who are willing to invest their time in discussing the future of Europe 2025 with you.
Europe 2025? More of 2016 - 2017 to me. Because the borrowing bill will be payable around that time. Your attitude about future reminds me about convesations that I had with short to medium term oriented people like yourself. I had plenty of those around 1999-2002 and 2004-2008 about future of Internet stocks and real Estate bubble. Greed is good but it makes too many people blind to the obvious.
is there anything on this thread in which we are all in agreement on? Surely we must ALL agree that greece will NEVER repay all this debt they owe, chucking more debt just means that debt will not be repaid either, so what's the point? Greece is of course insolvent i.e. cannot pay or service its debt rather than suffering from illiquidity. What is done with companies or individuals that can no longer service or repaytheir debt? Why, the debt is just written off and the company ceases to trade, in the case of the individual, the debt is again just erased and the individual is allowed to live again. Since greece is a country, the latter is of course more applicable!
Ok, so long as you're not opposed to paying for Greeks to default down the road, I certainly don't care.
This is just more can-kicking. Add more debt to the debt problem. No one here believes there will be any austere reforms in Greece, so you're right - the debt will never be repaid. If Syriza doesn't hold true to the promises of their elections, how long before Germany finds itself having to deal with Golden Dawn?
IMHO, you're thinking abt it somewhat wrong, folks... Even if Greece cannot pay off the debt, the key point is that Greek debt provides leverage. Specifically, everyone in Greece (including Syriza) would love to have their cake and eat it. In other words, they want to default on the debt and stay in the EMU/EU. The linking of default to Grexit allows the Eurozone a degree of leverage that prevents the outcome above. Point is that the Greeks want to stay in the Euro, but they don't want to abide by the rules (as evidenced by the polls). The Europeans want Greece to stay in the Euro, but only if the Greeks abide by the rules. Forcing Greece to commit to abide by the rules is the first step, after which, on the basis of potential good behavior, the rules can be relaxed. This way and given that Greece is running a primary surplus, there is some hope, just like we've seen with Ireland and maybe Portugal, as well as a few others. It's by no means a guarantee, but it's the only way it might work.
Why Germany Will Throw Up On The Greek "Reform Proposals": Wage Hikes, Foreclosure Protection, "Red Lines" For those keeping tabs on the Greek tragicomedy, now in its 5th season, today before midnight Yanis Varoufakis will submit a list of "reform measures" it plans to undertake to the Troika, pardon, Institutions. But while we patiently await the reveal of the full list of proposed Greek reforms, we can fast forward to the German reaction, because we already know what it will be: Why? Because as Bloomberg reported earlier today, citing government spokesman Gabriel Sakellaridis says in interview broadcast live on Skai TV today, the Greek government will implement legislation allowing taxpayers to repay overdue taxes in 100 installments. This not new: in fact, it was proposed back in November, when Greek Enikos said "the country's international lenders are not pleased with the new law voted by the government, which allows tax payers to pay off their debts towards the State in 100 installments." So while the Troika will ask why nothing has been done on this until now, Greece will have no retort but instead will say that the easier repayment terms for overdue taxes will boost liquidity in state coffers especially since the cash situation “is not easy.” Among the other proposal is that the government will introduce legislation tackling NPLs issue in the summer, not immediately; target is to strengthen country’s financial system. This is a key issue because Greek NPLs, currently around 40%, are far above where Cyprus banks were in March 2013 when the infamous bail in hit. Which begs the question: why does anyone assume that just because Greece has a deal, as tentative as it may be, that the Greek bank run is over? If anything, the local banks have merely bought the local population some breathing room in which to quietly and effectively withdraw as much ECB-backed funds as they can before the capital controls and/or "bail-in" trapdoor slams shut. But what is sure to make Schauble go berserk with rage is that Greece is now openly tearing apart the "existing programme" with its firm demand that the protection of primary residences from foreclosure will be upheld, saying that it creates no burden for banking system or the state budget: a state budget which as a reminder will be out of cash some time this week! Needless to say Germany will cross this proposal out with a very bright, very red pen.... as well as then next: "Minimum wage will be raised gradually until 2016, to allow businesses to adapt to labor cost increase." At this point Germany will point out the deflationary vortex in which Greece has been stuck in the past 5 years and say "what labor cost increases", and cross that "reform" as well. We also learn the Greek government plans to restore labor relations, labor law, collective bargaining saying the current regime resembles “dark age" (it does - thank the common currency for putting you there) which is incompatible with European labor culture, and will assesses proposals to secure liquidity of pension system, aim is not to cut pensions further. The German response to the latter? You guessed it. The punchline: "Red lines still apply and government will respect popular mandate." And... cue Germany's reply: Because from the start, this was all an exercise in Germany showing Greece that no, the popular mandate, is irrelevant when Germany pays the bills, which will be the case as long as Greece is in the Eurozone. And this is why as soon as Germany sees the Greek "reform" proposal it will stamp it with "Nein, Nein, Nein" from top to bottom, and tomorrow's "emergency" Eurogroup meeting is assured, in which the Troika throws back the proposal in Greece's face and demands that it strip all its "reforms" to comply with whatever was in the original memorandum, in the process making the Tsipras government nothing more than an extension of the hated Samaras administration. Because Greece bluffed... and lost, and now it no longer has any leverage in negotiations with Europe until the next, even more unpredictable Greek government, comes to power.
that is almost word for word what I have been saying from the beginning in this thread. Nobody debates whether Greece can repay its debt entirely or not. Its not worthy of consideration. Right now Greece stands at the crossroads and must choose. I think they will not leave the Euro (even though I wish they did) and commit again to reforms. Of course the word austerity will be eliminated and replaced with another term. Of course the term troika will be omitted and instead we will call them xyz. But after all the smoke clears Greece will most likely commit to some sort of reforms and the money will start flowing again. That is what works best for everyone in power and harms most of those paying the price, both, in Europe/Germany, and also in Greece. It is not the way I like to see it coming but my opinion does not matter. What matters is what happens so the greatest number of power players can remain in the game, that is how politics works and will always work.
Until the people elect someone so radical, so revolutionary, and someone not in the game, that those in the game can no longer keep the charade going.