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After 5 years of undercover bank bailout, Greece is only indebted to the taxpayers any more, not to the banks.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 08:36:56 AM EST
[ Parent ]
Yes, I know, but I am like Varoufakis today, only commenting in retrospect, which also therefore kills Katrin's excellent proposal.
by Upstate NY on Mon Mar 16th, 2015 at 09:37:28 AM EST
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Why? My (rather, Ulrike Herrmann's) proposal does not say that Greece will pay back debt to anyone. It won't.
by Katrin on Mon Mar 16th, 2015 at 12:01:11 PM EST
[ Parent ]
Greece is going to pay back a huge portion of that debt in any case.
by Upstate NY on Mon Mar 16th, 2015 at 12:56:47 PM EST
[ Parent ]
It always has, in every default.
by Upstate NY on Mon Mar 16th, 2015 at 12:57:05 PM EST
[ Parent ]
It is quite possible that your tea leaves are better than my crystal ball, but how do you think they will do that? 320 billion Euros. How much is a "huge portion of that" and where will they take that money from? Or will they offer finance minister's fingers as payment? I have a hunch that debt that can't be paid won't be paid and that's that.
by Katrin on Mon Mar 16th, 2015 at 04:40:58 PM EST
[ Parent ]
All of them know pretty much they have to repay what they can. They will repay 100% debt to GDP on extended maturities that will make it look like they have paid it all.
by Upstate NY on Mon Mar 16th, 2015 at 05:28:47 PM EST
[ Parent ]
My eyesight is no longer what it used to be, but it isn't that bad. I doubt very much that the Greeks can beautify their inability to re-pay their debt so much that it will look like you would like it to. And that is one reason more to stop this aggressive tone and claims of superior morality. We need a different narrative, a narrative of cooperation.
by Katrin on Mon Mar 16th, 2015 at 05:40:10 PM EST
[ Parent ]
In order for a country to pay 180% debt to GDP, many years of very high surpluses are required.

When your debt load is more manageable, you're not required to extract as much from the economy.

Greece has been paying a large debt load for many years prior to entering the eurozone, so there's no reason to think it can't do so again.

While Greece's per capita income skyrocketed in the eurozone, it is now down to simply 1k more a year than it was prior to entering. In other words, Greece lost 2 decades. Is there a reason to believe it can't get back to where it was prior to joining the euro?

by Upstate NY on Mon Mar 16th, 2015 at 07:28:59 PM EST
[ Parent ]
Germany's debt is about 80% GDP.

And here is how it looks in absolute euros.

What will be the financial picture in 10 years?

by das monde on Tue Mar 17th, 2015 at 01:26:37 AM EST
[ Parent ]
Better. Te 80% stillinclude two bad banks and thaht will be gone in ten years time.
by IM on Tue Mar 17th, 2015 at 05:17:38 AM EST
[ Parent ]
Debt may never be repaid but the ratio will be reduced if nominal GDP growth is higher than the interest rate.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 17th, 2015 at 05:22:25 AM EST
[ Parent ]
The question is if Greece can bring that about, and how quickly, and if a policy of confrontation helps. Varoufakis made a good impression in that TV show exactly because he did not play that game. Actually he made only one mistake during the show.
by Katrin on Tue Mar 17th, 2015 at 09:39:40 AM EST
[ Parent ]
 
he made only one mistake during the show.

Which was? (The sound isn't working on my computer and I haven't felt like/had the time to fix it.)

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 17th, 2015 at 10:16:50 AM EST
[ Parent ]
Denying the video.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 17th, 2015 at 10:46:03 AM EST
[ Parent ]
He called the video doctored which is the perfect excuse for self described "journalists" to not engage with anything he said.
I mean he is right of course in the sense that he did not give the finger to anyone and the video as presented was a straight up lie.
Nonetheless the court press will go full attack mode, with Jauch starting immediately with "well if you believe that there are dark forces out there, fabricating videos we will of course check."
At least the Austrian state broadcaster mentioned that in the video he was talking about 2010 while it was presented as dealing with the situation now. Maybe the marching orders changed? One can hope.
by generic on Tue Mar 17th, 2015 at 10:48:28 AM EST
[ Parent ]
While he should have said his quote was "out of context," the video was actually doctored.
by Upstate NY on Tue Mar 17th, 2015 at 11:09:38 AM EST
[ Parent ]
You mean the youtube or the video that Jauch put up?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 17th, 2015 at 11:11:59 AM EST
[ Parent ]
The Jauch video spliced Varoufakis's words with a voiceover to make it seem as though he was giving the Germans the finger.
by Upstate NY on Tue Mar 17th, 2015 at 12:20:05 PM EST
[ Parent ]
V or a surrogate should have put up a Youtube video showing the original and the doctored version, along with expert analysis.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 17th, 2015 at 10:06:13 PM EST
[ Parent ]
The ARD has in the meantime admitted that their accompanying text was misleading--which was V's point. But it was easy to "misunderstand" him, and he gave this opportunity to attack him by his unfortunate wording. Schäuble, the guy who forgot a suitcase with DM 100,000, calls Varoufakis a liar. Everything else V. said was good, easy to understand and had the right tone. Varoufakis and Herrmann made the others look like the inimical nitwits they are.
by Katrin on Tue Mar 17th, 2015 at 11:13:24 AM EST
[ Parent ]
Right... (via)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 17th, 2015 at 11:25:15 AM EST
[ Parent ]
What Greece has to do is figure out how to take the money its own oligarchs are extracting for themselves from the country and use a good part of it to pay down the debt. Of course that is not how 'reform' is supposed to work! And it is called 'socialism'.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 17th, 2015 at 07:09:41 AM EST
[ Parent ]
When people speak of Greek oligarchs, we are talking about a conflation of issues.

  1. The political elite thought they had carte blanche to take bribes from oligarchs and international finance because of the law forbidding arrest for ministers and deputies (a law in place to correct the junta's habit of imprisoning political opponents).

  2. The shipping sector which cannot be taxed and will never be taxed beyond the ship tonnage it already pays.

  3. The banking sector which is largely an offshoot of shipping (i.e. shippers started the banks).

  4. Greece's distribution system for goods, which is organized vertically across sectors, by the same cabal. This needs to be broken up so that distributors from outside Greece can service retailers.

  5. The black market: cigarettes and fuel.

#1 is paramount and the one most easily addressed.
#3 controls #4 because you can't compete with the current distribution system unless you, ONE, reform regulations that prevent a challenge to the system, and TWO, fund that challenge through private banks.
#5 is just going to war with racketeers, which presents its own set of problems at the level of police and national security.
by Upstate NY on Tue Mar 17th, 2015 at 11:08:42 AM EST
[ Parent ]
Could end up like Mexico or Colombia...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 17th, 2015 at 11:13:44 AM EST
[ Parent ]
Or perhaps Italy, in which the likeliest version is a few show arrests, and beyond that, if anyone truly threatens, a prosecutor or judge fear for their lives.
by Upstate NY on Tue Mar 17th, 2015 at 12:18:09 PM EST
[ Parent ]
Perhaps Syriza's least bad option is to take a page from their opponents play book and hire their own private security forces to 'protect' their ministers. This would not create a new police force that could be subverted by the next conservative government. It could obviously lead to civil war, but that might be the only way any fundamental change will occur.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 17th, 2015 at 12:46:10 PM EST
[ Parent ]
I can't believe the discussion is veering in this direction, to be honest.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 17th, 2015 at 12:49:26 PM EST
[ Parent ]
You know since you have this leg injury your commentary has gotten downright apocalyptic. We're still quite a way from civil war.
by generic on Tue Mar 17th, 2015 at 02:51:28 PM EST
[ Parent ]
Six weeks on 60mg of prednisone and chronic sleep deprivation hasn't helped my mood, I agree. And I certainly would not advocate civil war for anyone. But effective preparations might be the best preventive. If Syriza does not push some initiatives to collect taxes and prosecute criminality out of fear of the assassination of the prosecutors, judges or even cabinet ministers that becomes a serious problem for the survival of the state. If this government is brought down by violence or the threat of violence from the right that would already be a de facto civil war that the government lost. The existing police and security apparatus seems highly problematic in their effectiveness and reliability in both protecting the new government and ensuring that its laws and actions are enforce as it is. Yet time is of the essence.

My preference has always been to try to think things through to their conclusions, however ugly that might get. Then, worse come to worst, you at least have considered, and perhaps made some preparation for such an eventuality. A small but highly capable group of security personnel whose loyalty, as a group, is highly likely could do a lot to prevent worse coming to worst. I have to wonder what Lloyds or other reinsurance companies would charge per million of coverage of top officials of the Syriza government against loss due to assassination or unexpalined disappearance over the next two years. I have never had much patience with the "I'd hate to think XXXXX" approach and my observation has too often been that that is exactly what should have been thought about. To wit, in the USA, JFK, RFK, MLK, and Malcom X, for starters.    

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 17th, 2015 at 10:00:14 PM EST
[ Parent ]
And I share Migeru's concern that Greece could end up like Columbia. I would hate to see that. It would be a victory for fascism.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 17th, 2015 at 10:09:36 PM EST
[ Parent ]
Even if Syrizia would win a civil war, talking about  a victory would be misplaced. So they put their right wing allies in charge of the military and the man in charge of reforming the police thought most of their leadership. If they instead tried to bypass the police with their own security force they'd instead fan  the flames. Saying that I'm not worried would be a lie, but in a lot of situations preparing for a war makes it more likely.
by generic on Wed Mar 18th, 2015 at 04:01:33 AM EST
[ Parent ]
taught most of their leadership. I think I'll just give up on typing.
by generic on Wed Mar 18th, 2015 at 05:36:38 AM EST
[ Parent ]
Then they should task him with addressing the problem effectively. In for a penny...

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 18th, 2015 at 05:55:05 AM EST
[ Parent ]
No, there is one more group, and a critical one: The construction, IT, and media (this is pertinent: these folks own all of the major private media in the country between them) moguls that oligopolize Greek state procurements and are involved in various privatizations. This includes but is not limited to, people from categories 2, 3 and 5. These are people like:
  • G.Bobolas, and his various construction and engineering companies, involved in almost every major public infrastructure (from highways to gold mining to garbage disposal),
  • S.Kokkalis (ditto for the telecom, informatics and network projects),
  • Kopelouzos and Mytilinaios in Energy and mining etc,
  • Melissanidis (a gangster and former petrol smuggler now shipping magnate, who bought the State Lottery and football pool company after it was privatized at the dictate of the troika)
these people and a few scores like them are powerful but controllable and vulnerable.
Then there are the Latsis and Vardinogiannis families (pretty much involved in everything) - who are almost like a shadow government in terms of real power

Hit these people (or most of these people) with fines and (where possible) criminal charges, along with categories 1,3, 4 and 5 and SYRIZA will be winning every election from now til 2020 with huge majorities

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Fri Mar 20th, 2015 at 02:29:39 PM EST
[ Parent ]
This is a first step in that direction:

Businesses will have to pay a 26 pct tax on expenses made for supplies bought from countries with preferential tax regimes which will be returned within 12 months, after it is proved the transaction was real, according to a new provision which will be included in the draft bill on settling overdue debts towards the state.

The provision concerns article 21 of the finance ministry's bill which aims at blocking tax evasion through triangular transactions through tax havens and countries which impose very low taxes on business profits.

The ministry's 2014 list with countries that have preferential tax regimes or low taxes on business profits include, among others, Cyprus, Albania, Andorra, Bulgaria, Gibraltar, Ireland, FYROM, Qatar and the United Arab Emirates.

They're watering it down a bit, since it could kill legitimate business especuially with neighbouring countries, and the "business community" is furious, but it will be implemented.

Note that between the Latsis and Vardinogiannis oil companies the fines that were dismissed buy the previous administration [link in Greek] (going back a decade) were of the order of 1.2 billion Euros and had to do exactly with this "triangular" tax-avoidance schemes

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Fri Mar 20th, 2015 at 02:41:35 PM EST
[ Parent ]
How will this impact Hellenic Bottling? They moved HQ but kept production in Greece. I wonder if they will think about moving production out of Greece now.
by Upstate NY on Sat Mar 21st, 2015 at 11:14:30 AM EST
[ Parent ]

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