Category: Eurozone

Economics, European Union, Eurozone

Greece said no to the E.U.

Well the Greek referendum is over with and the Greeks voted with a resounding no (61%) on accepting bailout terms. Plenty of European leaders may say that they believe in the Euro and want Greece to stay in the European Union. The opinion polls that showed the Greeks at a dead heat which each other appear to have been quite wrong. The Greek banks don’t exactly have a lot of cash anymore so the drachma will have to make a reappearance pretty soon.There are no laws written on how a member state would leave the E.U. so now might be a good time for the bureaucrats in Brussels to figure something out.

They're happy, but are they ready for what may come next?
They’re happy, but are they ready for what may come next?

The United Kingdom will be holding a referendum on E.U. membership by 2017. 260,000 Austrians signed a petition that will force the Austrian government to debate the topic of leaving the E.U. in parliament. The most recent E.U. elections went very well for Eurosceptic parties and the trend doesn’t seem to be bending towards those who believe in the Euro and the European Union as it currently stands.

Won't see these two flags next to each other for much longer.
Won’t see these two flags next to each other for much longer.

I don’t see how the Greeks can possibly maintain their current budgets and spending levels. I also don’t see how the people of Europe are willing to give up control of their currencies, much of their economies, and sovereignty to a body like the European Union. The intellectuals who believed and pushed for the Euro seemed to believe that a monetary union would bring political unification. Quite the opposite has happened though. Political differences and demands by different nations that don’t have a real Federal government or other institutions to bind them together are destroying the idea of European integration. Even space cadet Paul Krugman realizes that the Euro is a flawed idea.

Greece Bailout

Yahoo! News-“Europe is dying,” EU opponents say, as Greek “No” brings delight

Yahoo! News-German calls for Grexit mount as EU stunned by “No” vote

Forbes-Happy Birthday, Milton Friedman, The European Crisis Is Your Latest Vindication

Yahoo! News-Greece enters uncharted territory after referendum “No” vote

European Union, Eurozone

Greece and capital control

The Greek government recently announced that banks would be shutdown for six business days, ATM withdrawals would be limited to €60 per day, and that the Athens Stock Exchange would remain closed on Monday. Time is almost up for Greece and the actions taken by the Greek government won’t solve any financial problems. PM Tsipras and the Greek government are still blaming everybody but themselves for this mess. Tsipras wants the deadline for the bailout program to be extended past June 30th to allow time for a referendum. The following are some statements made my Tsipras:

“It is now more than clear that this decision has no other aim than to blackmail the will of the Greek people and prevent the smooth democratic process of the referendum,” and “They will not succeed. These moves will have the exact opposite effect. They will make the Greek people more determined in their choice to reject the unacceptable … proposals and ultimatums of the creditors,“

They're right you know, there's no future for Greece in the E.U. Time to start printing million drachma bills out...
They’re right you know, there’s no future for Greece in the E.U. Time to start printing million drachma bills out…
I bet Greece's Finance Minister is real happy right now. I wonder how he'll blame this on the Germans?
I bet Greece’s Finance Minister is real happy right now. I wonder how he’ll blame this on the Germans?
Members of left wing parties burn a European Union flag during a protest in the northern Greek port city of Thessaloniki, Sunday, June 28, 2015. Greek Prime Minister Alexis Tsipras says the Bank of Greece has recommended that banks remain closed and restrictions be imposed on transactions, after the European Central Bank didn't increase the amount of emergency liquidity the lenders can access from the central bank. (AP Photo/Giannis Papanikos)
Members of left wing parties burn a European Union flag during a protest in the northern Greek port city of Thessaloniki, Sunday, June 28, 2015. Greek Prime Minister Alexis Tsipras says the Bank of Greece has recommended that banks remain closed and restrictions be imposed on transactions, after the European Central Bank didn’t increase the amount of emergency liquidity the lenders can access from the central bank. (AP Photo/Giannis Papanikos)

Couldn’t Tsipras just be honest and say give my country more free money while forgiving our debt? If the Greek people are interested in regaining sovereignty they should vote to leave the E.U. and dump the Euro. The Greeks also need to reduce government spending and dump socialism. I suppose that there’s simply no way that anything will work out well for Greece. Even if Greece receives any help from the Russians or Chinese, the coming years will be even more painful than the last five have been. The Greek healthcare system has been going downhill for years now while Greeks pensions continue to stay fat. Obviously what Greece needs is more socialism and not less. I wonder how much higher the Greek unemployment rate can go, which is currently over 25%?

Here are some of the more interesting comments from the articles I linked to:

Greekdebt Greekdebt1 Greekdebt2 Greekdebt3

Yahoo! News-Greece imposes capital controls, banks to remain shut

Yahoo! News-Parliament approves referendum; Greece’s future in balance

Bloomberg View-Greece and Germany Agree the Euro can’t work

Communism, European Union, Eurozone, socialism

The Greek tragedy continues… somehow

This game between Greece and its creditors somehow drags on. I really don’t understand why, the Greeks are showing few signs of making reforms. The Greeks have already received bailout money, aren’t willing to make any reforms, and continue to make demands of the ECB, IMF,  Germany, and anyone else who loaned money to the Greeks and expected the Greeks to not act like total deadbeats. Like I’ve written before, there’s no writing a parody about this. The actions of the Greek government are a parody and complete joke in of themselves. I wonder how many people believe that the Greeks will actually pay back all of the money that they were given?

Isn't PM Tsipras just full of smiles?
Isn’t PM Tsipras just full of smiles?

Belgium EU Greece Bailout European Commission President Jean-Claude Juncker welcomes Greece's Prime Minister Alexis Tsipras at the start of an EU-CELAC Latin America summit in Brussels

I suppose I can’t blame Greece’s creditors to harshly for keeping up the charade of negotiations. Who would want to take the blame for Greece default and going back to the drachma? Everyone has there limits though. IMF spokesman Gerry Rice stated: “There has been no progress in narrowing these differences,” and “There are major differences between us in most key areas“. I would read this as the Greeks just want free money and the IMF has had enough of that. European Union President Donald Tusk quipped: “The Greek government has to be, I think, a little bit more realistic“. Volker Kauder, the caucus leader for Merkel’s party in Germany stated: “It’s not possible that the borrower decides under what conditions the lender kindly gives his money”.

There goes Merkel, dour as usual. Why isn't she more interested in giving the Greeks more money?
There goes Merkel, dour as usual. Why isn’t she more interested in giving the Greeks more money?

Perhaps the Greeks are right and from now on the debtor should dictate the terms of the loan contract to the creditor? That sounds plenty progressive to me! Having to pay back the money one owes should be relegated to the last millennium. Only evil capitalists and enemies of the state would want their money back. What’s wrong with Greek proposals to borrow more money to pay back debt? Forward comrades, the revolution awaits!

I wonder how much more common this site will be in Greece soon?
I wonder how much more common this sight will be in Greece soon?

Yahoo News!-Greece gets wake-up call: coming week could seal its fate

Bloomberg Business-New Greek Budget Plan Falls Short of Last Week’s Pledge

European Union, Eurozone, socialism

Humiliating Greece

I’ve written about the Greek debt situation a couple of times now, and it continues to bring on the laughs. Prime Minister Alexis Tsipras recently stated the following concerning negotiations with Greece’s creditors: that Greece was willing to accept a “viable and long-lasting” deal and would refuse “humiliating terms“. PM Tsipras also stated the following: “Throughout, we have proven we are ready to make concessions in order to get a mutually acceptable deal. We demand of our partners the same respect and corresponding concessions. We have done our duty, it is now time for Europe to do the same,”. PM Tsipras is also claiming that the IMF is at fault for extreme terms such as: budget surpluses that are too high, reductions in welfare/handout programs, and not writing off debt.

A true people's hero, fighting to get more money for nothing!
A true people’s hero, fighting to get more money for nothing!

It would be hard for someone to write a better parody of the Greek government than what the Greek government itself is doing and claiming it will do. Syriza is asking for investment funding, infrastructure funding, debt write-off’s, to maintain excessive deficits, and blaming all of Greece’s problems on everyone but Greece. Some of Syriza’s brightest thinkers believe that leaving the Euro and going back to the Drachma will be no big deal. It’ll be just like the hyperinflation that the Weimar Republic experienced. Who else is ready to have a Greek million drachma bill as a souvenir?

I wonder if the Greeks are ready for this?
I wonder if the Greeks are ready for this?
A fine use for what the Greek drachma soon will be...
A fine use for what the Greek drachma soon will be…

I personally believe that no European country should have adopted the Euro without actually becoming a federal state or just maintained their sovereignty. Especially with a country that’s contributing as little as Greece is, but there aren’t any easy choices concerning a Grexit are there? But if the IMF doesn’t just give more money to Greece, how will the Greeks pay for healthcare? It’s not as if the socialist government is able to provide much and clearly the Greek economy is suffering from bad policies. I suppose that Syriza will just blame “austerity” though…

A Greek pensioner holds a flag during a demonstration for better healthcare in Athens
Can’t get enough of that government run healthcare.

A Greek pensioner shouts slogans during a demonstration for better healthcare in Athens

The Independent-Greek hospitals cannot afford painkillers, scissors or sheets as budget cuts bite

Yahoo! News-PM: Greece will not accept “humiliating” bailout terms

Almost forgot to take some screenshots of comments from the Yahoo News article:

Greecedebt1 Greecedebt2 Greecedebt3 Greecedebt4

Economics, European Union, Eurozone, Politics

Communist victory in Greece

BN-GP483_ngreec_H_20150125163620 Exit Poll Results Are Declared In The Greek General Election

The leftist Syriza party has just won the Greek elections with between 35.5 and 39.5% of the vote. The man who will likely become Greece’s new Prime Minister quipped of the victory “The Greek people have given a clear, indisputable mandate for Greece to leave behind austerity.” Because if anything is worth trying again after years of failure, that would be more socialism. I suppose that when the Panhellenic Socialist Party (PASOK) was in control that they just didn’t do socialism correctly. One way or another, these guys will get it right. It’s funny how the left always says “austerity” whenever someone else says that perhaps the budget should be balanced once in a while. As we all know, living within your means is for losers. Just raise taxes and you’ll get all the money you need right? Just keep promising “free” stuff and the voters will put you in power apparently.

Moving onto the Eurozone as a whole, who wants to take bets on who will leave the E.U. and when? The Germans are certainly preparing themselves for such an event. Anyway, I still think it doesn’t make sense for sovereign countries to share a single currency. In light of events such as the Greek election, why should countries with different desires, ideas, and goals all be forced into some sort of supranational state? The whole Euro project was never a great idea to begin with.

Now remember comrades, the failures of: the former Soviet Union, states of the former Warsaw Pact, Venezuela (lack of basic goods and near default), National Socialist Workers’ Party of Germany, Detroit, Argentina (two defaults in thirteen years), Cuba (but people still tout the literacy rate), North Korea and Zimbabwe (intermittent 1000% interest rates) all mean nothing. Just give socialism another hundred years, maybe it’ll work itself out by then.

spreadthewealth TruthinAdvertising_Econojustice notsocialist MEDAL_Certificate

The Wall Street Journal-Greek Vote Sets Up New Europe Clash

New York Post-Radical-left party wins historic victory in Greek elections

European Union, Eurozone

A breakup of the EU?

The United Kingdom has been considering the possibility of leaving the E.U. and will even be holding a referendum on this very idea soon. I’ve never thought it made sense to push over two dozen nations together in such a manner. It’s bound by a common currency, except for the U.K., yet has no common economic policy. Germany wants other nations to be more austere, a lackluster labor market, the threat of deflation, and a lack of any common economic policy are very dangerous for the E.U.. Continental Europe is bound by a common currency yet not bound to actually help other member countries out or have a common goal. There is no common defense policy amongst the various nations of the E.U.. Why shouldn’t the United Kingdom be able to control who enters their borders from other countries? Only time will tell if the E.U. can stay together, perhaps economic forces alone will pull it apart?

angela-merkel

The Economist-The euro zone: The world’s biggest economic problem