by Metatone
Mon Jun 29th, 2015 at 03:49:18 AM EST
At the heart of this crisis is the misinformation put out by the Eurogroup & Troika and by media sources across Europe.
Jake said it best in a comment on the other thread. (quoted below) But it's worth highlighting. He's responding to a critique of all the things the Greeks are not doing...
It appears that many members of the Eurogroup are resolved to "throw Greece up against the wall as a warning to others" and leaking and misinforming to justify that.
The IMF's desire to force tax rises and spending cuts when there is no possibility of devaluation goes against their own policies. Again, it's hard to find sane motives for such an action.
The great irony for me is that none in the IMF/Eurogroup seem to understand that their policy stance is only going to lead to vast market pressure and forthcoming crisis in Portugal and Italy. Just as with the ERM, once you show that there is money to be made in betting against the system, people will bet against the system.
This is a solvency crisis - and most of the periphery is insolvent - as others have noted, it's an inevitable result of the accounting identities. For Germany to run surpluses inside the EZ, other EZ countries have to be in the opposite state. In a real single currency this does not matter, but since the Eurogroup have decided this is not a real single currency, it will matter a lot - and it's very hard to see how it is not the end of the Euro.
JakeS:
Re: The last refuge of the scroundel (none / 0) Efficient tax collection?
In the Greek proposal, vetoed by the IMF. A 21st century grade well functioning public administration?
In the Greek proposal. Corruption at Swedish, not Swaziland levels?
In the Greek proposal. A well managed public service with a minimum of political patronage?
In the Greek proposal. A public service size commensurate with the financial ability of Greek society?
Pure sophistry, since the "financial ability" of a society is decided by political convention: The marginal cost of printing more money is zero, so sovereign financing can never be a scarce resource. Only a political weapon wielded by those with a pathological dislike of the public sector. A judical system that provides timely and workable resolution of business and administrative disputes comparably to other EMU members?
Already in the Greek proposal. Unless you meant to append "in favor of the businesses." In which case you can shove it where the sun won't shine. When every substantive proposal on your list is either uncontroversial or in fact the Greek position that the Troika is rejecting, it may be a sign that you need to maybe go read the Greek proposals, instead of Stasi 2.0's lies about them in FAZ.
- Jake
