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yep, but the basis of solidarity has to be honesty, transparency, accountability, trust, reciprocity and mutuality.

And if the demands currently placed on Greece were about any or all of those things, nobody here would be complaining.

But they're not, so we are.

I recognise that we are talking about unequal relationships in many cases, but why should German taxpayers bail out Greek Oligarchs

What's happening right now is that the Greek taxpayers' children are bailing out the German oligarchs.

The "Greek bailout" is mostly a bailout of German banks, and the Greek taxpayers (and the Greek poor, through lack of public services) are going to pay for it (it's a loan, not a gift). A Greek default would be a bailout of the Greek (ordinary citizen and oligarch alike) at the expense of the German oligarchs.

Me, I fail to see the problem with fucking over some oligarchs - hence my acceptance of a default scenario.

(Similarly, capital controls is a way to prevent the Greek oligarchs from absconding from the country - they helped make the mess; they can damn well stick around for the cleanup.)

More generally, Greece will default unless either
(1) Germany stops depressing domestic demand in the service of a mercantilist inflation policy
(2) the EU establishes redistribution programmes that counteract the German mercantilism (which would effectively turn the German mercantilist policy into subsidy by the German taxpayer to the German export industries)
(3) Greece imposes capital controls to bring its trade into balance.

The cash flows being what they are, there is no question about that fact. The only question is how much the Greek people are going to suffer first.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 16th, 2010 at 06:29:42 AM EST
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the EU establishes redistribution programmes that counteract the German mercantilism (which would effectively turn the German mercantilist policy into subsidy by the German taxpayer to the German export industries)

You mean the German taxpayer hasn't been already subsidizing the German export industries?

Let's look at German economic policy under both Schröder and Merkel:

  • stagnant real wages in Germany - check!
  • unconstitutional reduction of the German social safety net - check!
  • running deficits during the growth part of the business cycle - check!
  • increasing public debt even when above the 60% GDP threshold - check!
all this while running a substantial trade surplus - which is only possible with supply-side tax cuts to "stimulate" growth, which was stagnant precisely because of the suppression of internal demand. Let's also recall how in 2005 Germany lobbied to relax the enforcement of the Growth and Stability Pact which it was violating. Let's also remember how Germany kept its borders closed to new EU member states labour on the grounds that their economic growth was sluggish, while at the same time going on a capital shopping spree in the new entrants, siphoning business profits off from the periphery into Germany.

So the German oligarch have already been bleeding the German people dry for at least a decade. Meanwhile, the German banks lent money to the peripheral economies so they could buy German products. In 2009 the German government has been busy bailing out the German banks.

It is impossible - unless you're a Serious Person - to take any pronouncements coming out of Germany seriously.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 06:48:42 AM EST
[ Parent ]
You mean the German taxpayer hasn't been already subsidizing the German export industries?

Yes. The German worker has. But the German taxpayer hasn't. Taxpayers include (in theory) the employers.

At the moment, the subsidy schemes are from workers to employers and from net importers to net exporters. A redistribution system that evened out the current account imbalances would add a redistribution scheme from taxpayers to export businesses on top of those.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 16th, 2010 at 07:45:55 AM EST
[ Parent ]
Paying taxes is for little people.

And politicians no longer address themselves to workers but to taxpayers...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 07:50:20 AM EST
[ Parent ]

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