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steve2470

(37,457 posts)
Sat Jun 16, 2012, 05:27 PM Jun 2012

Greece bailout not negotiable, says Angela Merkel

http://www.telegraph.co.uk/finance/9335800/Greece-bailout-not-negotiable-says-Angela-Merkel.html

"That's why it's so important that the Greek elections preferably lead to a result in which those that will form a future government say ‘yes, we will stick to the agreements’,” Mrs Merkel said.

"We will have to speak to any government. I can only warn everyone against leaving the currency union. The internal cohesion of the euro zone would be in danger."

The Greeks vote for a new government tomorrow, facing a choice between the austerity-supporting New Democracy party, or the radical left Syriza party, which wants to reject the punishing terms of the €130bn European bailout

Jean-Claude Juncker, head of the eurozone finance ministers group, warned of serious consequences if Syrisa was victorious
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kenny blankenship

(15,689 posts)
1. The funny thing? Syriza would *actually* collect the taxes
Sat Jun 16, 2012, 06:14 PM
Jun 2012

Syriza would actually collect the taxes that the finger wagging Germans, ECB gnomes and assorted other Austerogarchs are always complaining that Greeks don't pay. Under the corrupt ND PASOK duopoly, the informal nature, let's call it, of Greek government and revenue collection will continue. Yes, tax collection on the working class will surely be stepped up. But the government controlled by those two bourgeois parties would resist dinging their own class in their perks and loopholes until the bitter end of the Greek state. They will prefer to placate foreign demands for Greek fiscal responsibility through austerity alone. Any social spending will be burned away like tears in the Sahara. Greece has been spending something like 10% of GDP on healthcare. The Austerity Anschluss Ultimatum which Frau Merkel forced them to sign instructs the Greeks to reduce that figure to 6%. The 4% gap will be filled with dead bodies of non-rich Greeks.

Syriza doesn't propose to leave the Euro, but they recognize the leverage Greece has in RE-negotiating the terms of the bailout memorandum. You can hear that leverage in Merkel's braying denials. If she refused to renegotiate Greece would end up being ejected from the monetary union in an uncontrolled event. French banks would be demolished, and Spain and Italy would come then under such pressure from skeptics in the bond market that their own collapse would be assured. With them goes the entire EU as a project of monetary union. Far from being liberated from having to prop up a bunch of mooches - which is how Merkel and the Eurocrats pretend to view this scenario - Germany would lose its primary export market. Whatever the original intent behind the EU's monetary union, it has been operated as a "Vendor Financing Scheme", meaning the strongest economy in a trading relationship lends money to the weaker partner(s) in order for the weaker to afford to buy the vendor's products. The importing country then owes the sticker price of the goods -whatever they are like cars, coffee makers, washing machines, etc.- PLUS the interest charges added on by "financing" the purchase. Obviously, if nothing changes in the relationship this arrangement can't go on forever because the importer just falls deeper and deeper down in the hole of debts owed to the vendor/financier country. Eventually their ability to borrow hits the wall. Imposing austerity and maintaining/reinforcing the shackle of the Euro on the Greek economy will in no way help that economy raise the revenues needed to meet its debt obligations. On the contrary, it will burn down whatever is left of the economy, and depress the prices of any assets that could be auctioned off in a national "fire sale". But the plan isn't really intended to improve things. Some people will wonder how Germany, the IMF and other creditor nations in the EU could be pushing a prescription for economic reform that they know won't help Greece. Some will shake their heads and state that they won't believe the respected creditors would do such a perverse thing! Doubters should just ask themselves if their credit card company really wants them to pay off their balance.

 

Scootaloo

(25,699 posts)
2. Merkel is revealing a bad hand
Sat Jun 16, 2012, 07:20 PM
Jun 2012

"You can't re-negotiate!" and "Pleeeeease don't leave the currency union!" are self-cacelling statements. All Syriza has to do is take up the proposal to leave the union, and use that as leverage to re-negotiate with.

Jack Rabbit

(45,984 posts)
3. There is no valid agreement
Sat Jun 16, 2012, 08:28 PM
Jun 2012

The latest agreement was made with a government headed by a Prime Minister appointed by the banks, not one from any normal electoral process.

The voters have said no. You know, as in "no" means "no."

tsuki

(11,994 posts)
9. I saw a joke on one of the
Sat Jun 16, 2012, 11:08 PM
Jun 2012

forums. What would Europe be like if the Nazis had won?

All of Europe would have a single currency and Germany would own Greece. (It may be too close to the truth to be funny.)

Nye Bevan

(25,406 posts)
10. Greek democracy still exists. The Greeks have every right to tell the Germans to get lost,
Sat Jun 16, 2012, 11:13 PM
Jun 2012

and go their own way. And they may do so tomorrow. The thing is, they still want to keep the bailout checks coming. Is it undemocratic for me to provide financial support for my deadbeat brother-in-law in exchange for him looking for a better job and turning his life around?

tsuki

(11,994 posts)
8. Apparently it is. The bail out installment was supposed to be 5.62 billion
Sat Jun 16, 2012, 11:06 PM
Jun 2012

Euros, 4.62 for the banks, 1 for Greece. The banks got their cash, Greece was stiffed.

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