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They should occupy the central bank and start printing Euro notes for disbursement to the unemployed. 1500 Euro per month per unemployed would seem like a good starting point.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 12th, 2012 at 12:16:19 PM EST
Where are Greek euro notes printed? The central bank is probably superfluous for your idea.
by Katrin on Sun Feb 12th, 2012 at 12:29:37 PM EST
[ Parent ]
From wiki:
The euro banknotes are the banknotes of the euro, the currency of the Eurozone and have been in circulation since 2002. They are issued by the National Central Banks of the Eurosystem or the European Central Bank.[1] Denominations of the notes range from €5 to €500 and, unlike euro coins, the design is identical across the whole of the eurozone, although they are issued and printed in various member states.

While the ECB could complain that these notes were not 'authorized' and are, effectively, counterfeit, there would be no way, other than date, perhaps, to distinguish them from genuine, 'approved' Euro notes.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 12th, 2012 at 01:23:24 PM EST
[ Parent ]
Notes can be back-dated and serial numbers repeated, if you have access to the central bank's machinery. If the serial numbers are set using movable type, they can even issue German Euro notes.

Of course they would be counterfeit. But then, so is the current Greek government, and the other Eurozone countries don't seem to have any problem with that.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 12th, 2012 at 01:41:17 PM EST
[ Parent ]
Exactly! And if the system uses digital image generation it would be even easier. I don't suppose Germany would invade with troops if it seemed like this was what the Greek Central Bank was doing.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 12th, 2012 at 04:31:22 PM EST
[ Parent ]
Though people in other countries might start refusing to accept Greek money (though probably only coins, as most people don't know how to tell which country issued the bills).
by gk (gk (gk quattro due due sette @gmail.com)) on Sun Feb 12th, 2012 at 04:35:45 PM EST
[ Parent ]
Euro banknotes - Wikipedia, the free encyclopedia

Unlike euro coins, euro notes do not have a national side indicating which country issued them (which is not necessarily where they were printed). This information is instead encoded within the first character of each note's serial number.

The first character of the serial number is a letter which uniquely identifies the country that issues the note. The remaining 11 characters are numbers which, when calculated their digital root, give a checksum also particular to that country. Because of the arithmetic of the check-sum, consecutively issued banknotes are not numbered sequentially, but rather, "consecutive" banknotes are 9 digits apart.

But as noted here, if you control the machinery, printing X-notes (Germany) could be as easy as printing Y-notes (Greece). Leading to widespread distrust of euro-notes and a flight to safety in German euro-coins? Nah, probably not.

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

by A swedish kind of death on Sun Feb 12th, 2012 at 05:04:19 PM EST
[ Parent ]
Maybe the ECB would start minting €100 coins... Or just switch to the gold standard. It's after all probably what they've wanted all along. That such mad policies would destroy the economy hasn't stopped them this far.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 16th, 2012 at 07:49:10 PM EST
[ Parent ]
Googling I find:

Mints

Greece Bank of Greece341 Messogion Ave., 15231 Halandri, Athens, Greece

So I assume that the central bank of Greece also functions as the mint, and the mint branch has its office at this address. But the unions will know for sure, someone has to handle the machinery.

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

by A swedish kind of death on Sun Feb 12th, 2012 at 04:21:08 PM EST
[ Parent ]
well, I somewhat doubt that you find money printing equipment there.

But anyway - I'm pretty sure Europe has a second set of currency designs as a contingency plan for such a situation. So if Greece actually started to massivley attack the Euro with counterfeit bank notes, expect a hastily organized exchange against another set of notes.

Given the incredible hassle that produces that would, of course, eradicate whatever goodwill Greece has left with the other European countries and their citizens.

And it might even give a political opening for a fracturing into a northern hard and a southern weak Euro. Feel free to imagine the consequences.

by cris0 on Mon Feb 13th, 2012 at 07:25:25 PM EST
[ Parent ]
The Northern Euro could be called the Neuro, which would be appropriate.

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 13th, 2012 at 07:28:38 PM EST
[ Parent ]
And the softer version would be the Seuro, which is, naturally, more mellifluous. It would, logically, mostly be used by countries south of the Rhine. But it would be harder to predict what the response would be to Greece creating only enough euros to pay government debts. Other than some neurotic fixations on absolute quantities of money by some Europeans what harm would that really do? Greece could just do what is has to do and no more and see what happens. The result is likely to be no worse than what will otherwise happen.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 14th, 2012 at 01:42:04 AM EST
[ Parent ]
I have no doubts France would make very sure to be on the neuro side.... (whatever it would be called in reality)

Aside from that, given the Rhine runs south-north, there is no such thing as its southern side.

by cris0 on Tue Feb 14th, 2012 at 03:55:42 PM EST
[ Parent ]
That would be a mistake for France.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 03:57:23 PM EST
[ Parent ]
French citizens would disagree with you.

Like every other citizenry they appreciate not beeing robbed by their politicians via inflation.

by cris0 on Tue Feb 14th, 2012 at 05:21:15 PM EST
[ Parent ]
???? via inflation??

What in the world do you think LTRO is through the ECB????????

by Upstate NY on Tue Feb 14th, 2012 at 05:25:41 PM EST
[ Parent ]
That's not inflationary.

The 3-year LTRO is the ECB's way of telling the European banking system "winter is coming and it may last years". Basically the ECB is helping the banks to get into an all-cash position is they so wish, and keep it that way for 3 years with an option to get out of the position at any time after one year.

It has nothing to do with lending to the real economy and any inflationary effect is minuscule because any asset that could be turned into 3-year cash at the LTRO was also able to be turned into 1-week cash any week, at the same interest rate. So any asset that the LTRO turned into cash was cash already for all intents and purposes. That's what monetary policy through the discount window (American usage) or refinancing operations (European usage) does. It does not increase the monetary mass and therefore, for those who believe in such things as the quantity theory of money, it is not inflationary.

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 Tue Feb 14th, 2012 at 05:32:55 PM EST
[ Parent ]
Wouldn't you say, however, that this is the sort of thing the neoliberals opposed precisely because of their overweaning fears of inflation?
by Upstate NY on Tue Feb 14th, 2012 at 05:57:02 PM EST
[ Parent ]
It's the sort of thing the neolibs should oppose if they believe their own theology.

Whether they actually oppose it or not is an excellent benchmark for whether they are deluded or deceptive. From casual perusal of the reactions, they seem roughly equally split between the two.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 06:00:00 PM EST
[ Parent ]
Spiegel: Deutschlands heuchlerische Monetaristen.

Essentially, monetarists should not oppose the LTRO. Only Austrians should. There are a lot of "neoliberals" who are closet Austrians and who only appear to be Monetarist because, during the 1970s stagflation, both Austrians and Monetarists agreed on policy.

In the current crisis, by and large Keynesians and Monetarists should agree on policy against Austrians.

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 Tue Feb 14th, 2012 at 06:13:07 PM EST
[ Parent ]
French citizens would disagree with you.

Improbable. No citizenry anywhere has ever preferred wage suppression and unemployment to inflation.

In fact, this is the precise reason the anti-democratic right had to come up with the garbage notion of "independent" central banks.

Like every other citizenry they appreciate not beeing robbed by their politicians via inflation.

Inflation takes purchasing power from lazy money and gives it to people who invest their money in real capital with real value.

Why do you want to subsidise lazy money and penalise productive capital?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:28:08 PM EST
[ Parent ]
Improbable. No citizenry anywhere has ever preferred wage suppression and unemployment to inflation

Er, not true. I know of one. :-(

by Katrin on Tue Feb 14th, 2012 at 05:32:39 PM EST
[ Parent ]
No, they have been offloading the unemployment on the rest of the Eurozone.

If you had 20 % unemployment in Germany (which you would if you had implemented the Hartz idiocy in a floating exchange rate system), no sober German would have supported the inflation first policy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:37:12 PM EST
[ Parent ]


The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Tue Feb 14th, 2012 at 05:42:51 PM EST
[ Parent ]
Well, yeah, Sarkozy is in denial.

Do you have any more breaking news?

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 Tue Feb 14th, 2012 at 04:46:45 PM EST
[ Parent ]
I'm pretty sure Europe has a second set of currency designs as a contingency plan for such a situation.

Considering the amount of foresight and awareness displayed by the Troika, I seriously doubt that.

Given the incredible hassle that produces that would, of course, eradicate whatever goodwill Greece has left with the other European countries and their citizens.

The present amount of goodwill has caused these other European countries to embark on a course of industrial and human devastation that quite literally cannot be topped short of a full-scale shooting war.

I will leave it to the reader to evaluate the worth of such "goodwill."

And it might even give a political opening for a fracturing into a northern hard and a southern weak Euro. Feel free to imagine the consequences.

Troika exit, stage right.

Why is that not desirable, again?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 01:53:38 AM EST
[ Parent ]
Well, if you think the Troika exiting Greece ASAP is a good thing, then we seem to be in perfect agreement.
by cris0 on Tue Feb 14th, 2012 at 03:56:59 PM EST
[ Parent ]
Tell me you're not the cris posting on German-Greek affairs on DailyKos.
by Upstate NY on Tue Feb 14th, 2012 at 04:30:47 PM EST
[ Parent ]
You say "And it might even give a political opening for a fracturing into a northern hard and a southern weak Euro. Feel free to imagine the consequences."

I do imagine the consequences. A deutschmark zone, immediately revalued upwards relative to other national currencies, the countries enjoying the later becoming competitive overnight on export markets and, more importantly, relative to internal demand, and the countries adhering to the strict Austrian school rules governing the deutschmark zone finding the exports, in particular to European trading partners, less competitive overnight.

Germany and its zone (don't even get me started on the Swedes) have been playing beggar-thy-neighbor ever since the crisis began in 2008. It's time for that to stop.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Feb 14th, 2012 at 05:06:13 AM EST
[ Parent ]
I can't imagine that the consequences of a Greek disorderly default 2 years ago could have been worse for the Greeks than what they have already endured and what's in store for them.

Yes, they would have had shortages of essential imports, food and fuel, experienced a wave of business failures, personal bankruptcies and unemployment. But 1) have they not basically endured the equivalent of that without default? 2) Would the situation not be improving after two years, with the debt slate wiped clean?

Instead, more debt has been piled on top of Greece, under foreign law rather than under Greek law to add insult to injury, and all the consequences of default have occurred. And the likes of Juncker have the gall of coming out and saying that this constitutes "European 'solidarity'" and that the Greeks have to deserve it if they want more of it.

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 Tue Feb 14th, 2012 at 06:05:19 AM EST
[ Parent ]
Something worse has happened for the Greeks, I'm afraid. In talking to relatives, it seems the total disdain for the state and all that entails (taxes, services, etc.) has reached epic proportions and has only reinforced the sort of historical factors which have made Greek life problematic.

This isn't reform at all. It's calcification. It's anti-reform.

Greece responds to history by creating guardrails around it. Taxes are a tribute to occupying entities? Response: don't pay taxes. The leftwing liberates the country and is ascendant in its reconstruction? Response: Clamp down on democracy. Opposition politicians thrown in jail for their views? Response: Pass a law forbidding the incarceration of politicians (even if guilty of corruption).

The last two years are yet another chapter in Greece's woeful history, an extension of its 20th century.

by Upstate NY on Tue Feb 14th, 2012 at 10:48:14 AM EST
[ Parent ]
it seems the total disdain for the state and all that entails (taxes, services, etc.) has reached epic proportions

Well, if you look at things like this (note the date!) it's not hard to feel total disdain for the European Union and all it entails.

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 Tue Feb 14th, 2012 at 10:51:53 AM EST
[ Parent ]
So, are you saying that the lesson learned (far from warning other countries not to consider default as Greece has) is to default forthwith rather than deal with the powers?
by Upstate NY on Tue Feb 14th, 2012 at 10:49:28 AM EST
[ Parent ]
Yanis Varoufakis has been arguing that Greece should have defaulted because it was insolvent, that it was negligent of the creditor states to lend money to a bankrupt (at penal rates!) and that it was negligent of the Greek government to accept piling more debt on a bankruptcy.

Note that the German "escrow account" basically means that any bailout money has to go to repaying the existing debt before paying for the Greek state service provision. Spain, allegedly under pressure from the powers passed a constitutional amendment along those lines last September:

In fact, most of the provisions of the new Constitutional amendment and impending Organic Law won't take effect immediately. The spending ceiling only becomes binding after 2020 (however, to bring a 9% deficit to 0.40% in 9 years does require reducing it by 1% per year in the middle of a recession, which will require biting austerity with immediate effect). There's only one provision of the proposed New Article 135 (in Spanish) which will have immediate effect:
Los créditos para satisfacer los intereses y el capital de la deuda pública de las Administraciones se entenderán siempre incluidos en el estado de gastos de sus presupuestos y su pago gozará de prioridad absoluta. Estos créditos no podrán ser objeto de enmienda o modificación, mientras se ajusten a las condiciones de la Ley de emisión.
Credits to service interest and principal on the public debt of the various Administrations will be understood to be part of the expense account of their budgets, and their payment will have absolute priority. These credits won't be subject to amendment or modification, as long as they keep to the conditions of the law by which they were issued.
Others will follow suit if the powers have their way.

And the lesson learned is that the powers in Europe have been demanding policy concessions or else horrible things would happen (democracy was at stake!) and then when everything they asked for has been done, horrible things have still happened and democracy is being lost. So another lesson is don't listen to the Barrosos, Trichets, Rehns, Bini-Smaghis, Merkels or Sarkozys of the world.

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 Tue Feb 14th, 2012 at 11:04:29 AM EST
[ Parent ]
So what happens when you have mutually exclusive provisions in your constitution?
by generic on Tue Feb 14th, 2012 at 11:43:26 AM EST
[ Parent ]
Then you have a constitutional crisis.

There are various ways to resolve those. Ranging from amicably amending out the stupid provisions, through the courts ruling that one of the provisions trumps the other, all the way to tanks in the streets.

Predicting ahead of time where on the spectrum your constitutional crisis falls can be a little tricky. The French politicians who signed off on the Grief and Stupidity Pact in Maastrict thought we'd get the "quietly drop the stupid provisions" version. But it looks increasingly like we're getting the "tanks in the streets" version.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 02:12:48 PM EST
[ Parent ]
Nothing. Things like article 41 which instructs the "public powers" to pursue a policy conducive to full employment is routinely ignored, especially post-Maastricht.

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 Tue Feb 14th, 2012 at 04:48:36 PM EST
[ Parent ]
Greece has considered default?

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 Tue Feb 14th, 2012 at 11:05:02 AM EST
[ Parent ]
They've considered it.

Just as I have considered certain inevitabilities.

The weird thing is though the Greeks pols may be at fault, they actually believed the troika and were suckered by them into the program.

This is the problem with a European political elite. They really put a lot of stock in the privilege of pan-European upper-classes. And people like Papandreou and Papademos come to discover that they were suckered from the very start.

by Upstate NY on Tue Feb 14th, 2012 at 11:26:37 AM EST
[ Parent ]
Varoufakis has a new article up claiming that the German elites have made up their minds to let Greece and Portugal go, push them out of the Euro. He says that the Greek and peripheral governments should not accept and play ball with such a plan However:

Any Greek or Portuguese or Irish government that serves its people's interests would point-blank refuse to play ball. The idea that exiting the eurozone is a simple matter of devaluing is dead wrong. It confuses the correct view that Greece and Portugal and Ireland would have been better off outside the euro with the quite different, and catastrophically erroneous, view that exiting is the optimal strategy. In this sense, our governments have no reason to go along with Germany's amputation strategy. But then again, the Greek government had no reason whatsoever to choose the Bailout Mk2 agreement, and the strings that it came attached with, over a simple default within the eurozone (which I was advocating; along with Wolfgang Munchau). And yet it did. Why? Because the politicians of the Periphery have neither the stomach nor the interest in disobeying orders issued from the North. Why that is is a matter for historians and psychologists. For now, we must take it for granted, unfortunately. Which leads me to the sad conclusion that, even though Germany has no way whatsoever to force certain countries out of the eurozone, the moment the Greek, Portuguese or Irish PMs get their marching orders, they will immediately start marching their way out of the eurozone.


The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Tue Feb 14th, 2012 at 12:14:33 PM EST
[ Parent ]
I read that article and I was thinking, what would it really cost them to keep Portugal around. Would it really be that much of a hardship? I don't think so.

There are other reasons to keep Portugal around as well. In addition to its public debt to GDP, it has approximately 130% private debt. if you squeeze the Portuguese too much, some banks in Europe will surely feel it, unlike in Greece where the debt is mostly public and by now written off from many banks and also owned by the ECB.

by Upstate NY on Tue Feb 14th, 2012 at 12:16:40 PM EST
[ Parent ]
The weird thing is though the Greeks pols may be at fault, they actually believed the troika and were suckered by them into the program.

Worse, they held themselves hostage to their European inadequacy complexes.

In Greece, Portugal and Spain we have countries which were part of The West but, on account of their authoritarian anticommunist regimes, were kept out of the European Communities. Accession to the European Communities was seen as a recognition that they had graduated to "deserving Europeans". For these countries, being a good European means grovelling to whatever the Franco-German axis or Brussels say. It never crossed Zapatero's mind that he should have opposed Merkel in the Spring of 2010 (when Spain still had economic leverage), as that would have been "uneuropean". It was possible for ZP's successor Rubalcaba to claim that the Spanish constitutional reform (debt brake and unconstitutionality of default) was "a pro-european reform" and for 40 million spaniard not only not to die laughing but be soothed by the incantation.

The Greek government has evidently agonised over whether pursuing their self-interest would be construed as "uneuropean" by the Brussels opinion-makers, whereas German actors just played hardball. Nobody dares question the "europeanness" of French or German actions, which is rather toxic when naked self-interest (it is even arguable whether it's German national interest here) is pursued. In other words, nobody in Greece wants to be tarred with the brush of destroyer of the Euro, whereas Merkel, Weber, Stark, Weidmann know they will not be, no matter what they do.

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 Tue Feb 14th, 2012 at 05:00:06 PM EST
[ Parent ]
Varoufakis wonders whether this complex extends to compliance with an order the leave the eurozone when that comes to pass. Many have mentioned that the ECB will no longer help fund Greek banks, but then again the ECB owns a lot of Greek debt.
by Upstate NY on Tue Feb 14th, 2012 at 05:28:50 PM EST
[ Parent ]
The thing that Varufakis is missing is that Greece will have to leave the Eurozone in order to survive a default. It needs to reassert the authority of the state to conduct economic planning within its jurisdiction, and, short of going all-out wartime command economy, the only way to do that in the middle of a serious industrial depression is through seigniorage.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:32:52 PM EST
[ Parent ]
Greece needs to leave the Eurozone to conduct economic planning within its jurisdiction ONLY IF it feels the need to conduct a local expansionary monetary policy. There are plenty of U.S. states (almost all) that operate under balanced budget rules, and Greece could do the same...
by asdf on Tue Feb 14th, 2012 at 05:47:47 PM EST
[ Parent ]
Greece requires its own money for expansionary fiscal policy more than for less contractionary monetary policy.

The economic planning expected of US states does not include employer of last resort functions. That is a federal obligation. Since the federal level in the EU does not want to assume this function, and since Greece has no means by which it can force the EU to do so, Greece needs its own money.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:54:33 PM EST
[ Parent ]
I really wonder what they are going to do.

The gov't never provided any services.

There is something to be said about tourism in euros. They are making more money than ever before. The product is being upgraded slowly.

But of course manufacturing suffers.

I simply wonder if Greece will become a neoliberal wasteland within the eurozone. In terms of gov't services, they are already threadbare. They may simply decide to continue on in this fashion.

by Upstate NY on Tue Feb 14th, 2012 at 06:30:22 PM EST
[ Parent ]
One of the big lies in this sorry mess is that of the lazy Southerners with their lavish welfare states. Italy, Spain, Portugal and Greece were, for the better part of the 20th century, right-wing regimes. They did not partake of the "social democratic" advances of post-war Europe like their northern neighbours did. As a result there is a dearth of capital accumulation, and a skimpy social safety net.

Daniel Cohn Bendit said it best and early (may 2010): one doesn't legislate into existence the level of social cohesion that Northern Europe enjoys



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 Tue Feb 14th, 2012 at 06:36:54 PM EST
[ Parent ]
But does it need to leave the Euro? Any reason a country sized Wörgl wouldn't work? Except for ECB interference of course.
by generic on Tue Feb 14th, 2012 at 07:08:04 PM EST
[ Parent ]
A country-sized Wörgl is leaving the Euro. De facto if not de jure.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:18:14 PM EST
[ Parent ]
But there is a big political difference between de facto and de jure in this case, no?

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Tue Feb 14th, 2012 at 07:23:16 PM EST
[ Parent ]
At this point? I don't think so.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:26:56 PM EST
[ Parent ]
Greece doing Wörgl would probably get Greece kicked out. From a political framing point that might be an advantage to leaving, but it is doubtful considering where media powers sits.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Feb 15th, 2012 at 05:00:11 AM EST
[ Parent ]
De jure, Greece can't be kicked out. And it can't leave, unless it also leaves the EU. But this is just lawyer talk. Too bad Brussels/Frankfurt is legalist heaven.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 16th, 2012 at 08:02:05 PM EST
[ Parent ]
Too bad that, 'in legalist heaven', the lawyers can't figure out how to deal with anyone who seriously breaks the system, or even that it has been broken. Completely comparable to the bought and paid for US Congress.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 17th, 2012 at 02:20:42 PM EST
[ Parent ]
If the circulation of Schillings stopped completely I never heard of it. Why should this time be different?
by generic on Tue Feb 14th, 2012 at 07:53:49 PM EST
[ Parent ]
But the Central Bank banned it and the Supreme Court of Austria declared it a criminal offense to issue more.

So says this book: The making of national money: territorial currencies in historical perspective - Eric Helleiner - Google Books

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

by A swedish kind of death on Wed Feb 15th, 2012 at 05:08:37 AM EST
[ Parent ]
Thanks for the link. Bookmarked!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 12:28:06 PM EST
[ Parent ]
If by "employer of last resort" you are talking about unemployment insurance, the states do indeed carry that responsibility. Well, it is a joint project strongly encouraged and partially funded by the federal government, but mostly it's a state function...
by asdf on Tue Feb 14th, 2012 at 09:52:39 PM EST
[ Parent ]
No, I'm talking about overall macroeconomic stabilisation. Or, to put it another way: Who prints and spends during a recession.

The federal government does.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 15th, 2012 at 03:15:45 AM EST
[ Parent ]
Many have mentioned that the ECB will no longer help fund Greek banks, but then again the ECB owns a lot of Greek debt.

Part of the Greek "bailout" currently under discussion involves the ECB swapping its holdings of Greek bonds for newly issued EFSF bonds, at face value. So the EFSF will be left holding the bag.

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 Tue Feb 14th, 2012 at 05:35:25 PM EST
[ Parent ]
And once again, the BuBa gets someone who is not the BuBa to pay for maintaining the BuBa's currency policy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:38:05 PM EST
[ Parent ]
And they are on the road selling EFSF bonds to China?
by Upstate NY on Tue Feb 14th, 2012 at 06:03:59 PM EST
[ Parent ]
They are making noises about wanting to, but I would not place any expensive bets on the Chinese buying into that particular pyramid scam. I have a hard time seeing what China would get better from that that they couldn't gain from dealing bilaterally with the countries being ECB'ed.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 06:07:07 PM EST
[ Parent ]
China is not buying.

I keep wondering whether Regling is a useful idiot or a master snake-oil salesman.

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 Tue Feb 14th, 2012 at 06:07:29 PM EST
[ Parent ]
True believers often make the most convincing salesmen.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 12:29:42 PM EST
[ Parent ]
Part of the Greek "bailout" currently under discussion involves the ECB swapping its holdings of Greek bonds for newly issued EFSF bonds, at face value. So the EFSF will be left holding the bag.

You really couldn't make this shit up:

Jens Weidmann says the ECB cannot participate in a debt restructuring as this would amount to monetary financing; he also seems to oppose forgoing on the ECB's profits; also expresses criticism of the expansion of the ECB's balance sheet;
(Eurointelligence daily briefing summary, 15 February 2012)

The reference to "forgoing profits" is to the bond swap with the EFSF at par. The reason is that Greek bonds were bought by the ECB at a higher yield than the EFSF bond yield, and a swap at par value, while representing no loss in "hold to maturity" accounting, is actually a loss (forgoing of profits due to the lower yields).

So Weidmann really does think it's right for the ECB to make a profit off the penal rates of lending to Greece.

Weidmann opposes the eurosystem's help for Greece

Jens Weidmann is opposed to any mechanism like a rapid distribution of the national central banks' gains on Greek bonds to the governments that would lead to a contribution by the eurosystem to the second rescue package for Greece. ,,The key point is that we (the eurosystem's central banks) are not allowed to renounce to demands against a state. This would be a form of monetary financing of that state", Weidmann said in an interview with Handelsblatt. The Bundesbank president appeared to directly contradict ECB executive board member Benoit Coeuré who had told Libération on Tuesday: ,,Should there be a profit (on Greek bonds), like all monetary revenues, it is to be distributed to the (member) states", the board member had said. "They could use it to contribute to the sustainability of Greek debt".

Weidmann further stressed that he was worried about the increasing risks that the eurosystem is taking on its balance sheet. Examples are the SMP and the loosening of the collateral framework by the central banks in France, Italy, Spain, Portugal, Austria, Ireland and Cyprus with quality standards below the standards currently in place in the eurosystem. ,,Also Mr. Draghi has conceded that with this acceptance of additional collateral the risks increase", the German central banker said. Weidmann announced that the Bundesbank would probably announce an increase of its provisions of €1.6bn last year at its annual press conference in March in order to cover potential risks and losses.



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 Wed Feb 15th, 2012 at 05:46:15 PM EST
[ Parent ]
There needs to be an article in the next treaty revision saying that nobody who has ever served with the Bundesbank may be appointed to any position of trust in the ECB.

Insane, the lot of them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 15th, 2012 at 05:55:09 PM EST
[ Parent ]
who are these people, we have their names, but who are they, really?

and who are the birds of similar feather they flock to?

lemme guess... the usual suspects...the utility companies, the MIC, the banksters, and the slimeball meatpuppets who are the interface with the hypermediated public, you know the donkeys we pin our illusional tails of hope onto when we go vote.

how do they face their children? how do they rationalise plunging a continent into perdition, to avoid losing even one cent on their euros? how do they glide from meeting to another without recognition or the opprobrium they deserve? how are they able to continue to exist surrounded by the fruits of their destruction, veiled by firewalls of force? in this age of free(er) information, why aren't their faces plastered all over as enemies of the state? have they vanished into the mist of our own inability to connect dots?

has the capture really gone so far that our very minds are enslaved as to a cult, so whole populations slide into collective stockholm syndrome?

TINA may ass, it's that we have been too well taught that any alternative is unthinkable, so it can be right under our own noses and we'll see right through it as if it weren't there.

how did we get so cognitively messed up? and other that blogviating, wtf can we do to wake up from this insanely perverse reiteration of the worst of who we are, ruling events with such orwellian effectiveness? is it that we have been lied to for so long, truth flies under the radar? lays like a diamond under windblown sand? waits like an acorn in dry moss for the moisture needed for its transformation to begin?

is knowledge what we need? is that the rain we await?

a big thanks to all here for the space to share these concerns, it means a lot to me to have found such a funny, hip and wised up group of folks to vent to/with.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Wed Feb 15th, 2012 at 07:32:17 PM EST
[ Parent ]
Once again, the governor of the BuBa shows how dear to his heart is the sacred principle of the independence of the ECB.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 16th, 2012 at 01:10:33 AM EST
[ Parent ]
Well, he does sit on the Governing Council of the ECB.

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 Thu Feb 16th, 2012 at 08:34:07 AM EST
[ Parent ]
True. It's only the confidentiality of ECB deliberations that he's showing his respect for.

Confidentiality that Germany and the BuBa insisted upon at the time...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 16th, 2012 at 12:40:23 PM EST
[ Parent ]
IOKIYAG
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 16th, 2012 at 01:50:12 PM EST
[ Parent ]

nobody in Greece wants to be tarred with the brush of destroyer of the Euro, whereas Merkel, Weber, Stark, Weidmann know they will not be, no matter what they do.

Oh, if anything does happen to the euro, NONE of them will escape the blame. It will have happened on their watch.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sat Feb 18th, 2012 at 02:59:27 PM EST
[ Parent ]
What do you mean? Weber and Stark will be said to have resigned because they were not allowed to defend the Euro.

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 03:01:09 PM EST
[ Parent ]
You should use the present tense.
by IM on Sat Feb 18th, 2012 at 03:05:02 PM EST
[ Parent ]
The Euro hasn't imploded yet.

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 03:40:08 PM EST
[ Parent ]
They will be seen as part of the Serious People who "lost the euro" and destroyed Europe in the process.

Because the only way the euro is destroyed is if France and Germany split up.

As we know, the crisis will be resolved when France (or, possibly, Italy) tells the Germans - either you pay or you treat us as second zone Europeans and you will have killed Europe and we'll all call you nazis, and the Germans will blink - or not, but of course they'll blink.

France definitely has what it takes to put the gun to Germany's head that way (which will have a price as well, even if successful); it looks like Italy could succeed too as Germany doesn't seem to want a Europe without them - and thankfully that would not involve the same kind of nasty brinkmanship and collateral damage that the French solution will entail.

Or we can somehow drag this on until the next German elections and someone with a bit more sense joins (hopefully) Hollande. Or maybe Hollande's election (hopefully) helps change the debate already - maybe not abandoning the "good European syndrome" completely but at least not going along with all the nastiest moral stuff.

btw - just like in 1981, you're beginning to read stories in France about the rich getting ready to leave the country if Hollande is elected...


Wind power

by Jerome a Paris (etg@eurotrib.com) on Sat Feb 18th, 2012 at 04:36:15 PM EST
[ Parent ]
As we know, the crisis will be resolved when France (or, possibly, Italy) tells the Germans - either you pay or you treat us as second zone Europeans and you will have killed Europe and we'll all call you nazis, and the Germans will blink - or not, but of course they'll blink.

France definitely has what it takes to put the gun to Germany's head that way (which will have a price as well, even if successful); it looks like Italy could succeed too as Germany doesn't seem to want a Europe without them - and thankfully that would not involve the same kind of nasty brinkmanship and collateral damage that the French solution will entail.

We know how well that worked out last time (and I'm not referring to de Gaulle and the Empty Chair Crisis, but to May 2010).

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 05:07:56 PM EST
[ Parent ]
Germany and its zone (don't even get me started on the Swedes) have been playing beggar-thy-neighbor ever since the crisis began in 2008. It's time for that to stop.

Hey, at least we have a freely floating currency, and unlike the Swiss we are'nt capping it. Be my guest and put your money in Swedish sovereign bonds, we'll need every cent when our real estate bubble bursts.

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

by Starvid on Thu Feb 16th, 2012 at 07:55:50 PM EST
[ Parent ]

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