I don't understand why they're still talking about this and proposing a third bailout.
For all the talk about the irresponsibility of the Greeks in borrowing money that they clearly weren't going to repay, nobody seems to be paying much attention to the European banksters who lent money without caring whether or not Greece could repay it. In a business or consumer situation, that ends with the borrower going under and the creditors getting largely stiffed; which is why when you or HexBoltCo wants to borrow money, the lenders look carefully at your assets and cashflow before deciding whether to float a loan.*
The larger lesson for nations is that if you want to retain a degree of control over your own financial affairs, have your own currency. The Eurobanksters likely fear that if Greece exits, that other nations will follow.** With their own currencies restored, those nations become in a better position to tell the dweebs in Brussels to sod off.
As some form of trade zone, the EU may survive. But as to the EU's proponents' dream that the EU would become the United States of Europe, they should put down the opium pipe.
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* The banksters' refusal to do that during the `00s is largely responsible for the `08 crash.
** Ultimately, they might as well change the name of the central European currency from "the Euro" to "the Reichsmark"
Cat Pawtector!
2 hours ago
2 comments:
In fact, the 'irresponsibility' of the Greeks is mostly a false narrative put forth by the EU to justify their austerity demands. in 07, Greek public debt was 100% of GDP - a little high by historical standards, but nothing that could be fairly called irresponsible. At the same time, the budget deficit was 7% of GDP. If you figure 'normal' is 2% growth and 2% inflation, that's a fiscal gap of 3%. Again, a little high but not egregious as the conventional wisdom now shrieks.
The problem with the PIGS was massive currency inflows during a red-hot housing bubble in southern Europe. When the bubble popped, the cash stopped coming, and they fell into recession. Then, as you say, they needed to re-balance by devaluation but the Germans prevented any of that from happening with the Euro. Now the troika has essentially used their leverage to topple the Greek government, permanantly ending any belief they might have had in their own sovereignity. If the people vote Yes on the referendum next week, the EU will be clearly running things and Tsipras will have to step down...
The reason they are still talking about it is exactly because they don't want anyone to leave the Euro. Once in always in. That is why, when they are supposed to be governed by rules, they dropped all the rules a while back to keep Greece in.
Which probably would have worked if Greece had done all of the things they were supposed to do with the first bailout. Sell off the nationalized industries. Stop handing out retirement benefits at 50 years. Start actually collecting taxes owed. Stop handing out jobs in wholesale lots in nationalized industries in return for votes.
Maybe they could have done this all a few years back, but that time is past.
They defaulted on the original loans and got the first bailout. Then the defaulted on the 1st bailout and got a 2nd bailout. Now they want a 3rd bailout but they don't want any terms related to the loans. (I think any "loans" made to Greece at this time should just be written off as gifts.) You wouldn't get a deal like that from the banks, but a lot of people, and a lot of Greeks, seems to think that is their right.
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