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Piketty: Amnesia, Selfishness

by afew Mon Jan 5th, 2015 at 08:42:46 AM EST

Thomas Piketty is in the news for having refused the French decoration of Chevalier de la Légion d'honneur. Or, in other news, for a conversation with Bill Gates.

He's also a columnist at Libération. His latest offering starts by taking a swing at Juncker for his hypocrisy on the Luxleaks scandal, and goes on:

2015 : quels chocs pour faire bouger l'Europe ? - Libération

il est temps de reconnaître que ce sont les institutions européennes elles-mêmes qui sont en cause, et que seule une refondation démocratique de l'Europe permettrait de mener des politiques de progrès social.

it's time to recognize that the European institutions themselves are the problem, and that only a democratic refoundation of Europe would enable policies of social progress.

What gets in the way? Piketty singles out Germany and France.


2015 : quels chocs pour faire bouger l'Europe ? - Libération

La palme de l'amnésie revient quant à elle à l'Allemagne, avec la France en fidèle second. En 1945, ces deux pays avaient une dette publique dépassant 200% du PIB. En 1950, elle était tombée à moins de 30%. Que s'est-il passé, aurait-on soudainement dégagé les excédents budgétaires permettant de rembourser une telle dette ? Evidemment non : c'est par l'inflation et la répudiation pure et simple que l'Allemagne et la France se sont débarrassés de leur dette au siècle dernier. S'ils avaient tenté de dégager patiemment des excédents de 1% ou 2% du PIB par an, alors on y serait encore, et il aurait été beaucoup plus difficile pour les gouvernements de l'après-guerre d'investir dans la croissance. Ce sont pourtant ces deux pays qui expliquent depuis 2010-2011 aux pays d'Europe du Sud que leur dette publique devra être remboursée jusqu'au dernier euro. Il s'agit d'un égoïsme à courte vue, car le nouveau traité budgétaire adopté en 2012 sous la pression de l'Allemagne et la France, qui organise l'austérité en Europe (avec une réduction excessivement rapide des déficits et un système de sanctions automatiques totalement inopérant), a conduit à une récession généralisée en zone euro. Alors même que l'économie est repartie partout ailleurs, aux Etats-Unis comme dans les pays de l'Union européenne restés au dehors de la zone euro.

The amnesia award goes to Germany, with France a faithful second. In 1945, these two countries had a public debt at over 200% of GDP. By 1950, it had fallen to less than 30%. What happened, did they suddenly create budget surpluses that let them pay off that debt? Of course not: it was by inflation and pure and simple repudiation that Germany and France got rid of their debt in the last century. If they had tried to patiently build surpluses of 1% or 2% of GDP a year, they'd still be at work on it, and it would have been more difficult for the postwar governments to invest in growth. These are however the two countries that have been explaining since 2010-11 to South European countries that their public debt must be paid back to the last euro. This is shortsighted selfishness, because the new budgetary treaty adopted in 2012 under German and French pressure, that organizes austerity in Europe (with excessively rapid reduction of deficits and a totally inoperative system of automatic sanctions), has led to generalised recession in the Eurozone. And this at the same time as the economy has started up again elsewhere, in the USA as in EU countries outside the Eurozone.

2015 : quels chocs pour faire bouger l'Europe ? - Libération

Dans ce duo, la palme de l'hypocrisie revient sans conteste aux dirigeants français, qui passent leur temps à rejeter toutes les fautes sur l'Allemagne, alors qu'il s'agit clairement d'une responsabilité partagée. Le nouveau traité budgétaire, négocié par l'ancienne majorité, et ratifié par la nouvelle, n'aurait pu être adopté sans la France, qui en vérité a fait comme l'Allemagne le choix de l'égoïsme vis-à-vis de l'Europe du Sud : puisque l'on paie un taux d'intérêt très faible, à quoi bon le partager ? En vérité, une monnaie unique ne peut fonctionner avec 18 dettes publiques et 18 taux d'intérêt sur lesquels les marchés financiers peuvent librement spéculer.

In this duo, the hypocrisy prize goes without contest to French leaders, who spend their time placing all the blame on Germany, when the responsability is clearly shared. The new budgetary treaty, negotiated by the former (Sarkozy) majority, and ratified by the new (Hollande) one, could not have been adopted without France, which truly made, like Germany, the selfish choice with regard to Southern Europe: since we pay a very low interest rate, why share it? The truth is a single currency can't work with 18 public debts and 18 interest rates on which the financial markets can speculate freely.

2015 : quels chocs pour faire bouger l'Europe ? - Libération

Alors, quels chocs pourraient permettre de faire bouger les lignes en 2015 ? Il y a, en gros, trois possibilités : une nouvelle crise financière ; un choc politique venant de la gauche ; ou bien un choc politique venant de la droite. Les dirigeants européens actuels devraient avoir l'intelligence de reconnaître que la deuxième possibilité est de loin la meilleure : les mouvements politiques qui prospèrent aujourd'hui à la gauche de la gauche, comme Podemos en Espagne ou Syriza en Grèce, sont fondamentalement internationalistes et proeuropéens. Plutôt que de les rejeter, il faudrait au contraire travailler avec eux pour formuler les contours d'une refondation démocratique de l'UE. Faute de quoi, on risque fort de se retrouver avec un choc autrement plus inquiétant, venu de la droite

So, what shocks could shift the lines in 2015? There are roughly three possibilities: a new financial crisis; a political shock coming from the left; or a political shock coming from the right. The present European leaders should have the intelligence to recognize that the second possibility is by far the best: the political movements that are prospering today on the left of the left, like Podemos in Spain or Syriza in Greece, are fundamentally internationalist and pro-European. Rather than reject them, we should on the contrary work with them to formulate the outlines of a democratic refoundation of the EU. Failing which, we run a strong risk of ending up with a more worrisome shock, coming from the right.

Display:
The translation, and any errors, are mine.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jan 4th, 2015 at 04:03:33 PM EST
Thank you!
by Ivo on Mon Jan 5th, 2015 at 02:29:08 AM EST

In this duo, the hypocrisy prize goes without contest to French leaders, who spend their time placing all the blame on Germany, when the responsability is clearly shared. The new budgetary treaty, negotiated by the former (Sarkozy) majority, and ratified by the new (Hollande) one, could not have been adopted without France

OK, France maybe had the power to block things. Certainly I was very disappointed (though not all that surprised) that Hollande did not appear to use every trick in the book to derail that, considering he had been elected on such a mandate.

But Germany was applying immense pressure while France failed to resist as hard as it probably could have (knowing that if it had done so, it would have at least faced some significant punishment, and maybe not actually managed to stop the whole thing). It's a bit disingenuous to send them back to back as sharing the responsibility.

If someone were to drag me into a room and I failed to attempt a freeing technique that would dislocate my shoulder but give me an 80% chance to not go into the room, I would feel a bit rich that I be called hypocritical for pointing out that I have, indeed, been dragged into the room.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Jan 5th, 2015 at 04:37:57 AM EST
I will add that in this case, France seemedc to me to be completely alone in the european landscape to ask for an end to austerity. This may be due to my lack of knowledge of local politics in other countries, but I am under the impression that every european country, including those suffering from austerity, embraced the austerian policies with a rather enthusiastic behavior.

Even in France, a lot of people are actually complaining that the policies implemented by Hollande are not austerian enough. I know for sure that some of my former colleagues would vote in favor of a cut in public servant salaries for example...

by Xavier in Paris on Mon Jan 5th, 2015 at 05:26:52 AM EST
[ Parent ]
That's why in France it will be Le Pen and not Mélenchon the one in position to go to the second round of the 2017 presidential election...
by Xavier in Paris on Mon Jan 5th, 2015 at 05:28:02 AM EST
[ Parent ]
"but I am under the impression that every european country, including those suffering from austerity, embraced the austerian policies with a rather enthusiastic behavior. "

Well, their governments anyway. I did not get the impression that the whole countries were in agreement.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Jan 5th, 2015 at 05:59:19 AM EST
[ Parent ]
The cult of the balanced budget is strong.
by IM on Mon Jan 5th, 2015 at 09:57:41 AM EST
[ Parent ]
Xavier in Paris:
France seemedc to me to be completely alone in the european landscape to ask for an end to austerity

But in a half-hearted way, totally disconnected from France's real hitting power in the EU.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 06:03:36 AM EST
[ Parent ]
OK, France could have gone all-in and did not, and I resent that it did not. Yes, there is an element of hypocrisy involved -Hollande probably never really meant what he campaigned on and paid only lip service to some of his promises. Yes, it is shocking that no more noise was made when Weidmann (or Schauble) went way over their remits.

But EVERYONE else was pushing the other way. Yes, France has a bigger hitting power than was often suggested, but this would have been single-handedly obtaining something with essentially no pro quo. It is far from certain that it would have been an unqualified success.

To say that France has by some distance the hypocrisy prize because it did not resist strongly enough when nobody gave indication on joining them should they push harder seems somewhat excessive.
Because that means being much, much more hypocritical than a country whose business model is based on supplier credit but treats debt as a sin, while having been the biggest debt reneger of the 20th Century to boot; that repeats pacta sunt servanda despite having taken the lead in violating them when it suited them, including a default event in 1993 when it refused to apply the clauses that were postponed until reunification in its debt restructure; that insists that the ECB fights inflation despite failing to hit its inflation target on the low side for years; that demands that everyone be a net exporter; that keeps lecturing the whole world that cutting public spending is the way to growth despite this being proven wrong (and not making any sense in the first place); that does its best to impose that even if a country does implement the crazy budgetary adjustments in the (misguided) treaties they rammed through, it be done only in the way they like, aka reducing public spending, even though nothing in the treaty says anything about it.

That takes some doing.


Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Jan 5th, 2015 at 06:36:48 AM EST
[ Parent ]
Yes, well, I have always seen Germany as the prime mover in the euro-mess, and I agree with all your points on that. But, since the famous Franco-German axis has always been supposed to be the locomotive of EU policy, it's fair to say that France has singularly failed to maintain its place and to punch its weight. Whether that makes France equally to blame along with Germany seems to me a matter for quibbling.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 07:14:29 AM EST
[ Parent ]
And Piketty is aiming his text at a French audience so it makes sense to target French agency rather then German.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Mon Jan 5th, 2015 at 08:19:40 AM EST
[ Parent ]
The problem is that dominant ideologies, such as austerity, have to be challenged publicly and effectively by high profile individuals, preferably by national leaders and preferably by ridicule. This has been needed since before 2008, though the specifics have changed. Imagine J.K. Galbraith or J. M. Keynes speaking through and for the President of France and other countries. If half or more of the electorate first laugh and then get angry things can change.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jan 5th, 2015 at 11:39:02 AM EST
[ Parent ]
And France has the best-developed satire media and is in the best position to provide the ridicule.
by rifek on Wed Jan 28th, 2015 at 12:35:29 PM EST
[ Parent ]
Unfortunately, as we have seen recently, it doesn't export well.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Thu Jan 29th, 2015 at 06:21:59 AM EST
[ Parent ]
No, it really doesn't. Again, we find the French and British senses of humour to be closer than one would think.
by Colman (colman at eurotrib.com) on Thu Jan 29th, 2015 at 08:32:25 AM EST
[ Parent ]
Cyrille:
But EVERYONE else was pushing the other way.

Looking from a smaller member state, and one without euro, I would say that for the Swedish political elite (red or blue) the EU have three major benefits:

  • A way to push special interests
  • Career possibilities
  • Photo-ops with major leaders

Austerity is neither here nor there. It fits with the common wisdom, but so would expansive financial policy (the common wisdom is not unified). All the three bullet points are however dependent on keeping on the good side of the powers that be in the union. So as long as everybody is pro austerity they will be (at least abroad).

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Mon Jan 5th, 2015 at 08:18:35 AM EST
[ Parent ]
The Euro as an opportunity for polite corruption via suborned political elites!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jan 5th, 2015 at 11:40:53 AM EST
[ Parent ]
The previous Swedish government was very much at the forefront of EU-level moves to pressurize Southern European states on debt and deregulation in general.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jan 5th, 2015 at 01:54:26 PM EST
[ Parent ]
Yes, but it is a loss for the Swedish export sector when the euro is depressed versus the krona. And Sweden is export surplus mini-Germany sans the currency union. So the gain from being attack dogs for the powers that be is political capital in the EU, better career opportunities in the EU and time in Swedish media grand-standing next to Merkel while playing on stereotypes of lazy Southerners.

Had the policy been different in the EU, the previous governments actions would have reflected that. Or at least that is my take on it.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Jan 5th, 2015 at 02:56:03 PM EST
[ Parent ]
I think the main point, and one I have made before, is that France (Sarko-Hollande) hung on to Germany to stay within the safe zone on interest rates. When we were daily watching the Bund spreads, France remained at a very low spread and at historically low real rates. Following a pusillanimous strategy, which harms other countries of the Union, while making feeble noises that France is on the side of growth, is indeed hypocritical.

Where I don't follow Piketty is when he says that French leaders spend their time blaming Germany. I don't think that is perceptible, at least at the level of public discourse - where, on the contrary, any attempt to discuss German attitudes to debt is immediately branded as Germanophobia (or Montebourg Madness).

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 05:41:56 AM EST
[ Parent ]
Greece spooks investors back to German bonds - The Local
French and German borrowing rates reached new all-time lows on Tuesday amid fears over the prospect of Greece leaving the eurozone.

 As of 0830 GMT, France's 10-year debt hit 0.772 percent on the secondary market, while the German 10-year Bund fell to 0.484 percent.

"Factors causing the recent risk-off mode are unlikely to fade rapidly," BNP Paribas analysts said in a note.

"Greece and the question of QE (stimulus) are keeping bond markets nervous," it said, adding that the anxiety is likely to persist through January.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jan 6th, 2015 at 03:05:37 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

French President François Hollande said on Monday that "Greece alone" can decide on whether to stay in the euro, writes Anne Penketh, a Guardian correspondent in Paris.

Hollande was asked about a German report over the weekend that Chancellor Angela Merkel would let Greece leave the single currency, during an interview on France-Inter radio. But he said that the Greeks were "free to decide their government" in the forthcoming elections, and that "as for Greece remaining in the eurozone it's up to Greece alone to decide."

He noted that both Greece and Spain had "paid a heavy price" to keep the European currency, and that there had been a "radical" reaction from fringe parties. But he played down the danger of electing the radical Syriza party in Greece and Podemos in Spain, saying that they could not be compared to the risks from the extreme-right. And if the radicals were elected in either country, he added, they would have to stick to the commitments of previous governments, in particular regarding the management of debt.

He added that "the rules governing the euro," should be respected.

Hollande used the turmoil in Greece to reaffirm that the EU now needed to ditch its unpopular German-led austerity policies. "Europe can't be identified with austerity, now that the euro has been stabilised," he said.

Asked about the divergence between Germany and France on austerity measures, he announced that he would meet Merkel and the President of the European parliament, Martin Schulz, next Sunday to discuss "the future of Europe and Franco-German relations".

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:19:21 AM EST
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

The German government has poured more cold water on that Spiegel story that Angela Merkel is ready to see Greece exit the eurozone.

Via the wires:

  • German govt spokesman says there is no change in stance of the German govt towards Greece.
  • German finance ministry spokesman, we expect Greece to stick to its commitments.
  • German govt spokesman says Greece has long-term commitments, a new govt will not change that.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:20:07 AM EST
[ Parent ]
Industry minister and SPD boss Gabriel declared that "Greece cannot blackmail us" and should stick to agreements. Nice way to package an actual blackmail.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jan 5th, 2015 at 02:02:13 PM EST
[ Parent ]
He actually seems to have said "no longer". Greece has been so devilishly efficient at blackmailing Germany, er, since when?
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 02:12:04 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours | Business | The Guardian

Gabriel told the Hannoverschen Allgemeinen Zeitung that the German government's goal was to see Greece stay in the Eurozone, but that it also expected Athens to fulfill its promises to the EU.

Regardless of who forms the next government, we expect that they stick by the agreements made with the EU. The Eurozone is considerably more stable and robust than it was several years ago, which is why we can no longer be blackmailed.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 02:16:38 PM EST
[ Parent ]
Though that translation into English may be more than he said:

Gabriel erwartet Vertragstreue von Griechen / Deutschland / Welt / Politik / Nachrichten - HAZ - Hannoversche Allgemeine

,,Deshalb sind wir übrigens auch nicht erpressbar,
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 02:24:33 PM EST
[ Parent ]
True dat. This is more along the lines of

"And btw that's alswo why we can't be blackmailed."

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Tue Jan 6th, 2015 at 08:21:12 AM EST
[ Parent ]
When a German throws in "deshalb" as a supposed add-on or afterthought, you know the real point is coming and is probably the tip of the sword.  Sort of, "Oh by the way, the Wehrmacht has just invaded Poland."
by rifek on Wed Jan 28th, 2015 at 12:41:13 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

Speaking at his party congress on Saturday, Alexis Tsipras, leader of Syriza, vowed to end "unreasonable and catastrophic"austerity.

He said a Syriza-led government would write down most of the nominal value of Greece's debt.

That's what was done for Germany in 1953, it should be done for Greece in 2015.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:21:19 AM EST
[ Parent ]
Alexis Tsipras:
That's what was done for Germany in 1953, it should be done for Greece in 2015.

Just what Merkel and Schäuble needed: a potential Greek PM who can return 'Pacta sunt servanda' straight to sender...

by Bernard on Mon Jan 5th, 2015 at 05:09:22 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

German inflation fell to 0.1% in December, its lowest level in five years, according to figures just released by the Federal Statistics Office.

The figure was below economists expectations of a 0.2% increase in prices.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:22:24 AM EST
[ Parent ]
Grexit divides politicians in Athens | EurActiv

Eurozone membership is "irrevocable", the European Commission said today (5 December), after media reports about Greece leaving the single currency that triggered strong reactions in Athens. EurActiv Greece reports.

Der Spiegel reported this weekend that Berlin considers "Grexit" almost unavoidable if the left-wing Syriza opposition party, which steadily leads all opinion polls, wins Greece's parliamentary elections on 25 January.

Commission spokeswoman Annika Breidthardt, told reporters today that, according to the EU treaty law, "euro membership is irrevocable".

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jan 6th, 2015 at 12:55:11 AM EST
[ Parent ]
Actually, as I understand it, "euro membership is irrevocable" as long as the nation in question remains an EU member. So to leave the euro Greece would have to withdraw from the EU.

Also, while a nation can withdraw, the EU treaties make no provision for the expulsion of a member nation.

(http://en.wikipedia.org/wiki/Withdrawal_from_the_European_Union - since I'm not on my own machine right now I can't quote using Tribext.)

A Grexit ain't gonna happen. At least not within a timeframe that has any immediate relevance.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Tue Jan 6th, 2015 at 08:29:44 AM EST
[ Parent ]
Although Migeru pointed out that the current treaties do not prevent a country from having another currency as well.

Greece could state that they accept Drachmas, which they would use to pay salaries, and not contravene to the obligation of using the euro.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue Jan 6th, 2015 at 08:48:48 AM EST
[ Parent ]
Actually, according to this, that's not the case:

http://ec.europa.eu/economy_finance/euro/cash/legal_tender/index_en.htm

Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law.

Theoretically, I suppose, Greece could issue some kind of scrip à la Wöhrl:

Yet, contractual parties are free to agree to use in transactions other official foreign currencies with legal tender status in the state of issuance, e.g. the Pound Sterling or the US Dollar. The same applies to privately issued money like local exchange trading systems (e.g. voucher-based payment systems in certain communities) or virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them as private money and without prejudice to the official currency (euro or national currency) being the sole legal tender.

However, it would seem to me that it would be difficult to decouple the value of the scrip from the euro.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Tue Jan 6th, 2015 at 09:18:09 AM EST
[ Parent ]
it would seem to me that it would be difficult to decouple the value of the scrip from the euro.

It seems to me that, what governments cannot/willnot do by fiat 'the market', (esp. blackmarket), can do routinely and with ease.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 6th, 2015 at 09:58:12 AM EST
[ Parent ]
Probably. But in this case I would assume that the government would actually want its scrip to devalue against the euro.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Tue Jan 6th, 2015 at 10:11:25 AM EST
[ Parent ]
And it would likely get it, absent some extraordinary intervention by the ECB.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jan 7th, 2015 at 12:43:32 AM EST
[ Parent ]
Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law.

"Legal tender," however, can mean at least three different things:

  1. Legal tender for the settlement of all debts. In the minimalist reading this means that a debtor can void his debts by presenting the coin of the realm, in preference to whatever other currency or payment in kind is specified in the contract. In the maximalist reading, the debtor can do this with prejudice to all other obligations to settle in particular currencies, and the creditor can demand the coin of the realm in settlement in preference to other currencies. (Which would actually make for an interesting ECJ challenge to the requirements in various "trade" treaties that expropriations must be compensated in the currency of the former owner's choice, on the basis that this prejudices the status of the Euro as sole legal tender of the Eurozone.)

  2. Legal tender for the settlement of taxes. In the minimalist reading this means that you can always settle your debts to the tax man with the coin of the realm: The tax man cannot demand payment in kind if you are able to pay in the coin of the realm. In the maximalist reading, the coin of the realm is the only valid means by which to settle taxes.

  3. Legal tender for the settlement of purchases. In the minimalist reading this means that merchants must offer their wares at prices denominated in the coin of the realm, and must transact if those prices are met by a customer solvent in the coin of the realm. In the maximalist reading merchants may only transact in the coin of the realm.

Greece could argue for an interpretation of legal tender as the minimalist reading of all three prongs, which would enable it to operate a dual currency system. This reading would actually seem to be supported by the EC document you link to.

In principle, maintaining a dual currency system is a major inconvenience. In practice, Gresham's Postulate will usually suffice to keep the hard currency out of general circulation. And even if it does not, operating a dual currency system is a considerably smaller inconvenience than regular major industrial depressions, which is the result of the current mismanagement of the eurosystem.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jan 6th, 2015 at 12:19:10 PM EST
[ Parent ]
Greece could fail to live up their obligations under the treaties regarding the euro.

A country that fails its obligations can be sued in Court by the Commission and get to pay a fine. Happens all the time and have never resulted in country leaving the EU or being expulsed.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Jan 6th, 2015 at 09:42:43 AM EST
[ Parent ]
There are actually obligations on both sides. The troika has reneged on some of its agreed to obligations.
by Upstate NY on Wed Jan 7th, 2015 at 10:58:25 AM EST
[ Parent ]
Yes, thanks for pointing out in another thread that Greece has already been promised a debt rescheduling.

So if Greece starts using something else, Greece fails its obligations.

After the Troika (which includes the commission and the ECB) failed on their promises for restructuring the debt.

After the ECB, the Commission and the Eurogroup totally ignored that the social protocol talked about social protection and not about destroying it.

After the ECB used a 3% deficit rule that the Italian minister at the time claims were non-binding to bludgeon member states with trade deficits into giving up powers that never belonged to the Troika.

All in all, there are a number of vioaltions and if Greece defends itself with vigor a case before the Court can be interesting.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Jan 7th, 2015 at 04:10:22 PM EST
[ Parent ]
Greece could balance its budget with the ticket sales and broadcast rights.
by rifek on Wed Jan 28th, 2015 at 12:29:31 PM EST
[ Parent ]
The truth is a single currency can't work with 18 public debts and 18 interest rates on which the financial markets can speculate freely.

In other words, the Euro is supposed to be a sovereign currency, but it isn't issued by a sovereign.  The EU really needs to do an analysis of how well confederacies have worked through the ages.

by rifek on Mon Jan 5th, 2015 at 01:54:43 PM EST
Wealthiest Americans say the poor have it easy

A survey by the Pew Research Center found that 54% of those with the greatest financial security believe that "poor people today have it easy because they can get government benefits without doing anything in return."

Only 36% of the wealthiest say "poor people have hard lives because government benefits don't go far enough to help them live decently.

by das monde on Wed Jan 14th, 2015 at 05:01:58 AM EST
Billionaire Greene, Who Bet Against Subprime, Goes Long on U.S. While Bemoaning Jobs Crisis
Billionaire Jeff Greene, who amassed a multibillion dollar fortune betting against subprime mortgage securities, says the U.S. faces a jobs crisis that will cause social unrest and radical politics.

"America's lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence," Greene said in an interview today at the World Economic Forum in Davos, Switzerland. "We need to reinvent our whole system of life."

[...]

Greene, who flew his wife, children and two nannies on a private jet plane to Davos for the week, said he's planning a conference in Palm Beach, Florida, at the Tideline Hotel called "Closing the Gap."

by das monde on Fri Jan 23rd, 2015 at 01:10:35 AM EST
[ Parent ]
das monde:
Greene, who flew his wife, children and two nannies on a private jet plane to Davos for the week

That's America's lifestyle expectations.

Do as I say, not as I do.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jan 23rd, 2015 at 02:15:00 AM EST
[ Parent ]
And the irony is wholly lost on him.
by rifek on Wed Jan 28th, 2015 at 12:31:38 PM EST
[ Parent ]
There Are More Slaves Today Than at Any Time in Human History | Alternet
If you look it up in Webster's dictionary, the first definition is "drudgery or toil." It's become a metaphor for undue hardship, because we assume that once you legally abolish something, it no longer exists. But as a matter of reality for up to 27 million people in the world, slaves are those forced to work, held through fraud, under threat of violence, for no pay beyond subsistence.
by das monde on Thu Jan 15th, 2015 at 05:16:37 AM EST


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