Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.
Display:
Apparently, the troika has moved the goalposts on Greece again by stating they need maximum participation in PSI by Wed. morning--this after many creditors expressed misgivings at the weekend's events.

Greece reminds me of Charlie Brown, the troika is Lucy.

See this: http://youtu.be/GsSXMT0NrB4

by Upstate NY on Mon Feb 13th, 2012 at 02:14:19 PM EST
That's true. I very much doubt if there is a deal with the Troika. Greece has signed its part of the deal but Germany seems that has changed its mind (we' ve seen that before with the PSI I of July).

"Eurozone leaders have turned a 50bn Greek solvency problem into a 1,000bn existential crisis for the European Union." David Miliband
by Kostis Papadimitriou on Tue Feb 14th, 2012 at 12:43:26 AM EST
[ Parent ]
according to today's papers, greece hasn't really decided were to get part of the revenues it promised.

Also the leader's commitment to their policy is still not there.

So it's not about PSI (yet)

by cris0 on Tue Feb 14th, 2012 at 04:26:13 PM EST
[ Parent ]
according to today's papers, Greece's Quisling government hasn't really decided were to get part of the revenues it promised.

Fixed that for you.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:38:14 PM EST
[ Parent ]
The quisling gov't actually did decide where the money is coming from. They cut it out of the military budget.

Maybe they didn't specify that they would be cutting German Leopard tanks or else submarines built by Thyssen-Kruppe?

by Upstate NY on Tue Feb 14th, 2012 at 04:57:53 PM EST
[ Parent ]
if they did so, more power to them.

One of the many sins of Greek society is its massive military overspending. Look it up - military spending to GDP ratio of different countries.

by cris0 on Tue Feb 14th, 2012 at 05:09:30 PM EST
[ Parent ]
No small thanks to Germany. First the German companies bribed corrupt Greeks to approve useless submarines and tanks (which didn't even work), and then Germany blackmailed Greece by making the many billion euro purchase of new subs a prerequisite of the bailout. Talk about German hyocrisy.

Then Germany freaked out when France announced it was selling jetfighters to Greece at a cut-rate cost (thereby muscling out German companies trying to earn a profit) with German money!!! Hilarious!

by Upstate NY on Tue Feb 14th, 2012 at 05:38:08 PM EST
[ Parent ]
and then Germany blackmailed Greece by making the many billion euro purchase of new subs a prerequisite of the bailout.

A brazen lie.

by IM on Sat Feb 18th, 2012 at 10:28:34 AM EST
[ Parent ]
No, that is a matter of public record.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 10:49:42 AM EST
[ Parent ]
Bit of cours ethere is nothign, absolutely nothing about any defense contracts being part of the bail-out in there.

So it is a brazen lie.

That:

>The second boat, Pipinos, was officially launched in February 2007 and is at present going through Greek harbour acceptance trials in Piraeus.

On September 21, 2009 TKMS announced that the contract with the Greek Navy for all four submarines had been cancelled due to country's arrears of more than 520 million Euros. TKMS is now seeking arbitration to resolve the matter.[21][22]

On October 27, 2009 the Greek Ministry of Defence officially confirmed that they intend accepting the three boats built in Greece. The first-of-class boat built in Kiel will not be accepted, and will be offered for sale. Proceeds from the sale will be used to pay the debt to TKMS>

also shows that the squabbling about the quality of the submarines is rather pre crisis. And that th reamining orders are about submarines built in Greece.

by IM on Sun Feb 19th, 2012 at 04:32:14 PM EST
[ Parent ]
The tutelary powers have apparently decided that the Greek government doesn't have the prerogative to decide on their own military budget. From EuroIntelligence :

Migeru:

the euro working group rejects Greece's proposal to make up for €325m shortfall by defense spending cuts and ask for pension cuts instead

hmmm doesn't fit the frame very well, Cris...

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Feb 15th, 2012 at 06:16:43 AM EST
[ Parent ]
The really oddball thing is that onlooker-analysts predicted this.

It's as though they are trying to ask the question: "How craven can we be?"

by Upstate NY on Wed Feb 15th, 2012 at 09:37:30 AM EST
[ Parent ]
you just solidify my conclusion that we should have stayed out of Greece from the beginning. And that we should just walk away now.

This kind of horridly unfair and inaccurate propaganda is exactly the reason. German taxpayers committed massive amounts of money to help Greece, and they get spit in the face for it.

Bad idea alltogether, from the start.

by cris0 on Tue Feb 14th, 2012 at 05:06:43 PM EST
[ Parent ]
The German taxpayer has committed absolutely no money to Greece.

The German taxpayer has committed a whole lot of money to bailing out German, French and British banks. The German taxpayer actually got a pretty good deal on that bailout, seeing as the American taxpayer and the other EU countries' taxpayers chipped in with well over half the bailout of the German, French and British banks.

That the bailout was laundered through a compliant Greek government is incidental and irrelevant.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:16:15 PM EST
[ Parent ]
But there was a considerable Greek primary deficit until just now that was financed too.
by IM on Sat Feb 18th, 2012 at 10:24:06 AM EST
[ Parent ]
A primary deficit which financed import orders for the German export industries.

As long as Germany wants to keep running a current accounts surplus against Greece, it needs to be willing to pony up the money to finance that surplus, or allow Greece to print that money itself. Insisting that Greece pays for the German current accounts surplus is an exercise in futility. (Also in arbitrary cruelty to Greek society. But we seem to have established that the German version of European solidarity ends when it starts costing money, so that probably doesn't count.)

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 10:53:39 AM EST
[ Parent ]
>A primary deficit which financed import orders for the German export industries.<

Do really want to argue that Greece has exactly one trade partner?

by IM on Sun Feb 19th, 2012 at 04:25:31 PM EST
[ Parent ]
Trade: Exports (2010): $22 billion: manufactured goods, agricultural products, beverages, tobacco, petroleum products, cement, chemicals. Major markets--Germany, Italy, Cyprus, Bulgaria, Turkey, U.K., France, U.S., Romania, Spain. Imports (2010)--$64.55 billion: basic manufactures, food and animals, crude oil, chemicals, machinery, transport equipment. Major suppliers--Germany, Italy, China, France, Netherlands, U.S., Russia.
(US State department)

Assming the countries are listed in decreasing order of importance, Germany is both Greece's leading importer and exporter. Now we just need to find a source for the actual amounts.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sun Feb 19th, 2012 at 04:31:04 PM EST
[ Parent ]
With bilateral trade worth more than EUR 8.5 billion, Germany is Greece's principal trading partner. German companies are among the most important foreign investors in the country. Over the past two years, Deutsche Telekom has gradually acquired a 40 per cent share in the semi-state-owned Greek telecommunications company OTE. In addition to companies including Siemens and Bayer that have been operating in Greece for many years, there has been a recent increased influx of retail companies like Lidl and Media-Saturn. Major infrastructure projects such as the Athens Metro and the new Athens airport have been conducted with the help of German companies. The 144 German companies operating in Greece employ a total workforce of approximately 37,000 and account for an annual turnover of some EUR 10.5 billion (German Federal Bank figures, as of April 2010).
(Auswärtiges Amt)

Nice how they give the gross amount of bilateral trade, but not the net.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sun Feb 19th, 2012 at 04:36:50 PM EST
[ Parent ]
It has three trading partners who are abusing the European fixed exchange rate system for protectionist gain.

Of those three, one is Germany and the other two (Finland and the Netherland - and Finland's inclusion on this list is actually questionable) are an order of magnitude (and some small change) smaller. As trade scales faster than linearly with size, Germany is well in excess of 80 % of the trade imbalance.

So for all practical purposes, yes, Greece's primary deficit went to German export companies.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 04:39:15 PM EST
[ Parent ]
The percent of total German exports going to the Euro area as a whole has actually declined since the euro was introduced because the Euro area has grown more slowly than other regions. Germany's bilateral trade balance in goods with each of the GIIPS, however, has improved. For example, Greece's bilateral trade deficit with Germany widened from -1.5 percent of Greece's GDP in 1999 to -2.5 percent in 2008. Other core European countries, like the Netherlands, saw similar developments with the GIIPS, suggesting that all of the surplus countries benefited from increased demand in the weaker Euro area members.
(Carnegie Endowment)

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sun Feb 19th, 2012 at 04:41:53 PM EST
[ Parent ]
Foreign Affairs: Why Only Germany Can Fix the Euro (November 17, 2011)
First, rather than providing peripheral countries with a market for their distress goods, the Germans have been enthusiastically selling their manufactured goods to the periphery. According to Eurostat, Germany's trade surplus with the rest of the EU grew from 46.4 billion euro in 2000 to 126.5 billion in 2007. The evolution of Germany's bilateral trade surpluses with the Mediterranean countries is especially revealing. Between 2000 and 2007, Greece's annual trade deficit with Germany grew from 3 billion euro to 5.5 billion, Italy's doubled, from 9.6 billion to 19.6 billion, Spain's almost tripled, from 11 billion to 27.2 billion, and Portugal's quadrupled, from 1 billion to 4.2 billion. Between 2001 and 2009, moreover, Germany saw its final total consumption fall from 78.5 percent of GDP to 74.5 percent. Its gross savings rate increased from less than 19 percent of GDP to almost 26 percent over the same period.


tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sun Feb 19th, 2012 at 05:11:04 PM EST
[ Parent ]
Not that you'll care, but I'd appreciate it if you used fewer rhetorical questions and more links to sources in debates.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sun Feb 19th, 2012 at 04:57:21 PM EST
[ Parent ]
If you don't care, why should I care?

I do overuse rhetorical questions, but I really don't think that matters . A assertion without a question mark is not really much better.

Now , according to the statistical annex of the OECD economic outlook report 90,

http://stats.oecd.org/Index.aspx?DataSetCode=EO90_INTERNET

Greece had a current account trade deficit of 14.9% in 2008. In absolute numbers 51.2 billion $. The trade deficit was 49,1 billion $. Now as big as 2.5% of gdp is, that is not everything and certainly not 80% of the total.

by IM on Sun Feb 19th, 2012 at 05:19:52 PM EST
[ Parent ]
In the Eurozone as a whole, there are five surplus sinks: Germany, the Netherlands, Austria, Luxembourg and Finland.

The rest are surplus sources, and the external account is balanced.

Therefore, any surplus generated by the deficit countries will eventually find its way to the five surplus sinks.

Germany is larger than the other four by a factor of what? Four? Five? Something like that, anyway.

The fact that the Greek sovereign primary deficit passed through Italy before ending up at Siemens and Rheinmetall AG is of no consequence to the conclusion that it did, in fact, end up there.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 05:37:14 PM EST
[ Parent ]
We follow this logic the greek primary deficit financed chinese exports.
by IM on Sun Feb 19th, 2012 at 05:55:06 PM EST
[ Parent ]
No, the Eurozone has balanced foreign accounts.

RoW is not a surplus sink for the Eurozone, which means that none of the money the Eurozone's members pay for import end up in China.

The notion that "China is bankrolling Europe" is American conventional wisdom that you're puking up as if it were fact.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 06:05:46 PM EST
[ Parent ]
The notion that "China is bankrolling Europe" is American conventional wisdom that you're puking up as if it were fact.

I said nothing of the sort. Don't make things up.

I cuold have used Ireland. Or the Netherlands. But countries with a considerable trade surplus with Germany. Or Japan.

by IM on Sun Feb 19th, 2012 at 06:10:15 PM EST
[ Parent ]
No.

The Eurozone has balanced foreign accounts. RoW is therefore not a surplus sink for the Eurozone. RoW not being a surplus sink, and China belonging to RoW, China cannot be a surplus sink.

This is elementary graph theory. So elementary, in fact, that you can prove it simply by drawing a graph with the nodes "Greece," "rest of Eurozone" and "Rest of World."

Then impose the boundary conditions that inflows must exceed outflows for Greece, and that all in- and outflows to RoW must sum to zero.

The only sink in that graph is RoE. China is not in the Eurozone, and is therefore not a sink.

Q.e.d.

This has been your first and last fee lesson in elementary graph theory. If anything here is unclear, look it up before venturing into discussions of international trade again.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 06:25:41 PM EST
[ Parent ]
That, as so often from you is nonsense. Even after we factor out the eurozone, Greece is not running a balanced trade account with the rest of world.
by IM on Sun Feb 19th, 2012 at 06:30:51 PM EST
[ Parent ]
sigh

The Eurozone is running a balanced trade with RoW.

That means that the Greek deficit cannot end up in a sink outside the Eurozone. It. Is. Not. Possible.

As long as the Eurozone as a whole is running balanced foreign accounts, all Eurozone countries' aggregate deficits must end up as surpluses for other Eurozone countries.

This is not a difficult concept to grasp, so I really don't see why you continue this obtuse insistence that German surpluses are not the problem.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 06:47:53 PM EST
[ Parent ]
You keep (deliberately?) forgetting Greece is part of a currency union with aggregate balanced external trade.

Greece doesn't have a problem with its debt in Yuan either.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sun Feb 19th, 2012 at 06:06:28 PM EST
[ Parent ]
What would have been your attitude in 1953 when Greece forgave 55% of the pre-war debt you owed to Greece (an amount at least as high as the 15 billion Germany has passed through Greece to its own banks) and then, as an additional reward, Germany received massive stimulus funds?

Did Germany suffer the consequences of its decisions then, as you so put it?

by Upstate NY on Tue Feb 14th, 2012 at 05:40:29 PM EST
[ Parent ]
Well yes. Do you really want to argue that a relevant proportion under discussion at London wasowed to greece?

Germany received massive stimulus funds?

Just like anybody else, including Greece and proportionally the least.

by IM on Sat Feb 18th, 2012 at 10:22:47 AM EST
[ Parent ]
Greece received was funding for the war against the Communists that lasted until 1949. Literally nothing for industry or anything else.
by Upstate NY on Sat Feb 18th, 2012 at 06:40:06 PM EST
[ Parent ]
Greece did get:

1948/1949: 176

1949/1950: 156

1951: 45 million $

from the Marshall plan. That is not nothing.

by IM on Sun Feb 19th, 2012 at 04:24:00 PM EST
[ Parent ]
You're evading Upstate NY's point that Greece in the postwar years was a theatre for the "Allies" against Communism in a quite different way from West Germany. While West Germany was the poster child, Greece was literally a battleground.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Feb 20th, 2012 at 01:43:30 AM EST
[ Parent ]
You're evading

Say it ain't so!

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Feb 20th, 2012 at 02:12:14 AM EST
[ Parent ]
It is questionable whether additional debt really helps Greece. It is precisely the problem that Germany doesn't have enough money to simply give enough money to the PIGS nor the resolve to dissolve the Euro that is causing this prolonged crisis.
by oliver on Wed Feb 15th, 2012 at 06:26:40 AM EST
[ Parent ]
And what of all the other options that have been bandied about?

It's curious that when it comes to financialization methods meant to line the pockets of bankers, we dream up the most fanciful vehicles. But when it comes to addressing the sovereign debts of nations, it's direct deposits.

Or, as we say in America, "Straight cash, homey."

by Upstate NY on Wed Feb 15th, 2012 at 09:36:23 AM EST
[ Parent ]
I guess most of that is an attempt to avoid naming the dreadful truth. For Greece there are only two significant options. Either unquestioning obediance or an exit from the Euro. Matters have progressed too far to allow anything less radical.
by oliver on Wed Feb 15th, 2012 at 10:18:22 AM EST
[ Parent ]
It's clearly gone beyond that. Unquestioning obedience will not make the debt stability analysis come out positive. Unquestioning obedience has dug them into an ever-deepening hole :

austerity -> shrinking economy -> shrinking tax base -> unsustainable debt -> da capo al fine.

The name of the game now is "humiliate them until they snap".

Hence the endlessly moving goalposts.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Feb 15th, 2012 at 10:24:35 AM EST
[ Parent ]
This.

The lie (sold most vehemently of all to the German public) is that austerity measures were every going to put Greece into a position to pay off it's debt.

What was needed was a short sharp ECB intervention at the beginning to show that it wasn't going to tolerate random speculation in Eurozone government bonds - and then an EU-wide dose of fiscal spending to dig Europe out of the worst situation since the Great Depression.

Ever since Austerity was chosen as the policy response, we've been locked into a death spiral. Many on this site (including me) kept hoping that we could break out of that - but the reality is as long as people keep pretending the Austerity could work in the middle of a Lesser Depression, the more doomed we are.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Feb 15th, 2012 at 10:59:29 AM EST
[ Parent ]
That's not the way the papers are phrasing it.

Last week, Greece agreed with the troika on the austerity package. When it went in front of the EU FMs, they demanded an additional 325 million that sent Greece back to the drawing board.

Commentators all over Europe noted that it appeared the EU was shifting the goalposts to antagonize the Greeks.

Others said, if the Greek parliament approved the new measures, watch the EU go back again and shift the goalposts.

The new package contained $325 million in additional cuts, and it was approved. Where did the cuts come from? The military.

This is part of the austerity deal the Greeks sent.

It's been less than a week since the additional demands (made Thursday night). what exactly is it that you want?

Greece agreed to an additional 325 million to be cut from defense procurements.

But I bet Germany wasn't expecting that since Germany demands Greece buy useless armaments from Germany, stuff that doesn't even work.

by Upstate NY on Tue Feb 14th, 2012 at 04:39:10 PM EST
[ Parent ]
well, according to the Papers I've read those 325 Million were included in the 3.3 billion savings package but not substantiated as of Sunday evening (according to Der Spiegel). So Juncker postponed the meeting.
by cris0 on Tue Feb 14th, 2012 at 05:18:45 PM EST
[ Parent ]
Is news traveling by pony in Germany these days?

http://www.washingtonpost.com/business/markets/a-look-at-the-austerity-measures-greece-has-to-introd uce-before-getting-bailout/2012/02/14/gIQArPpBDR_story.html

Note, 300m in military cuts that weren't there on Thursday. The additional 25m is coming out of pensions.

It's there. Junker can pretend, but it's there.

Moving the goalposts again.

by Upstate NY on Tue Feb 14th, 2012 at 05:43:26 PM EST
[ Parent ]
Hmm...

that was published tuesday.

Juncker postponed the meeting on Sunday evening.

by cris0 on Tue Feb 14th, 2012 at 06:55:39 PM EST
[ Parent ]
No, he postponed it today.

Everyone knew of what the Greek vote consisted. It was an actual vote on the program. Ollie Rehn said late this afternoon that the meeting was on.

You're telling me that the meeting was postponed on Sunday and Ollie Rehn was not informed until today?

I'd like to see a source for that.

They are moving the goalposts no matter how much you wish to deny it.

by Upstate NY on Tue Feb 14th, 2012 at 07:11:43 PM EST
[ Parent ]
From Eurointelligence this morning by e-mail:

The other issue is the €325m shortfall in savings.  Kathimerini  writes that the Greek cabinet examined a proposal to use cuts in defense spending, public investment funds and the health sector, but that this proposal was rejected by Euro Working Group -- low-level EU finance ministry officials who were meeting in Brussels on Tuesday. Kathimerini's sources said that the EU officials insisted that the additional savings should come from cuts to pensions.  
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Feb 15th, 2012 at 02:55:14 AM EST
[ Parent ]
>But I bet Germany wasn't expecting that since Germany demands Greece buy useless armaments from Germany, stuff that doesn't even work.>

Could we retire that lie?

by IM on Sat Feb 18th, 2012 at 10:18:57 AM EST
[ Parent ]
In the latest round of negotiations Greece proposed to cut its defence budget by a few hundred million and was told by the Troika to go back to the drawing board and cut pensions instead. Is that also a lie?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sat Feb 18th, 2012 at 10:30:41 AM EST
[ Parent ]
It's the truth.

The submarines were designed for the North Sea and they keel over in the warm med waters.

by Upstate NY on Sat Feb 18th, 2012 at 06:41:17 PM EST
[ Parent ]
Tell that to Israel.
by IM on Sun Feb 19th, 2012 at 04:18:21 PM EST
[ Parent ]
You act as if I'm making this up...

http://en.wikipedia.org/wiki/Type_214_submarine

by Upstate NY on Mon Feb 20th, 2012 at 11:38:51 PM EST
[ Parent ]
I find this extremely hard to believe. Swedish subs are made for Baltic waters, but the only thing needed to modify when they went to the Med IIRC, was improved air conditioning.

And as IM said, tell it to Israel.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun Feb 19th, 2012 at 04:40:27 PM EST
[ Parent ]
by Upstate NY on Mon Feb 20th, 2012 at 11:39:04 PM EST
[ Parent ]
There are many articles on this, by the way, and Cohn-Bendit is on the record in the commission.
by Upstate NY on Sat Feb 18th, 2012 at 06:42:03 PM EST
[ Parent ]

Display:

Occasional Series

24 July 2014
by dvx - Jul 23
59 comments