How Merkel Failed Greece and Europe

[Leonardo]

Something to consider before laying the 'blame' at anyone's feet...

One widely held view is that Mr Tsipras has always intended to leave the euro, but wants to get kicked out rather than leave of his own volition. That way it's Brussels - and Berlin - which get the blame.

source

When you consider this scenario, then it's possible that no amount of 'negotiations' would ever sway the Greek govt to accept any real concessions. If this view is correct, and I suspect it probably is, then the only way for the EU to 'meet' with Greece over it's debt would be to accommodate everything the Greek govt asks for, without asking for any tightening of the Greek belt.

[questionmark]

Something to consider before laying the 'blame' at anyone's feet...

source

When you consider this scenario, then it's possible that no amount of 'negotiations' would ever sway the Greek govt to accept any real concessions. If this view is correct, and I suspect it probably is, then the only way for the EU to 'meet' with Greece over it's debt would be to accommodate everything the Greek govt asks for, without asking for any tightening of the Greek belt.

That suspicion was voiced weeks ago in some Greek media... but I would not be surprised if Mr. Tsipras wanted some turmoil to create a new "Worker's Paradise"... doubt he can control the Army though... they will not be amused.

[stevewinn]

Something to consider before laying the 'blame' at anyone's feet...

source

When you consider this scenario, then it's possible that no amount of 'negotiations' would ever sway the Greek govt to accept any real concessions. If this view is correct, and I suspect it probably is, then the only way for the EU to 'meet' with Greece over it's debt would be to accommodate everything the Greek govt asks for, without asking for any tightening of the Greek belt.

I highly doubt Greece will leave the Euro. All 28 EU members are meeting tomorrow in the Bunker, it'll be very telling if a deal isn't announced. It wouldn't surprise me if they threatened Greece with EU exit let alone Euro exit. - my thinking is the polls if they are to be believed - the majority of the Greeks are still in favour of EU membership, the EU will play on this, and turn it into a fear. End result is Greece remains in the Euro, Greek government removed from office.

[acidhead]

That suspicion was voiced weeks ago in some Greek media... but I would not be surprised if Mr. Tsipras wanted some turmoil to create a new "Worker's Paradise"... doubt he can control the Army though... they will not be amused.

Well considering in 2010 Greece was spending more % of their GDP on the military than any other EU member it's really no surprise they're meeting yet again to hammer out a deal.

Just curious....

Why has Greece spent billions on their military in the first place? Are the greeks preparing for a major war??? If the answer is because of Turkey it doesn't make any logical sense. Both are NATO members.

[questionmark]

Well considering in 2010 Greece was spending more % of their GDP on the military than any other EU member it's really no surprise they're meeting yet again to hammer out a deal.

Just curious....

Why has Greece spent billions on their military in the first place? Are the greeks preparing for a major war??? If the answer is because of Turkey it doesn't make any logical sense. Both are NATO members.

you are under the false impression that the enemy of your enemy is your friend... Greece and Turkey had a proxy war not 40 years ago (over Cyprus) and Greece has always played both sides of the cold war, NATO or not.

[acidhead]

The US may increase Interest rates this Year, could make for Interesting times in the Eurozone in the coming months.

It's highly unlikely the interest rate at the Fed will change upward this year from .25% Not without any major spending cuts or major raise in taxes. Plus a national election next year. It just aint gonna happen.

The talk here in Canada is the CCB is going to cut theirs this week from .75%

All the talk of a recovery has been a confidence game by fudging the numbers in many fields. There's been no recovery just a coverup. I wonder when the Keynesian talking heads like Krugman and company are going to finally admit its been a total failure to try and use monetary controls in their planned market scheme. Milton Friedman must be rolling in his grave right now. The policies pursued by the central banks have done the correction which could have prevented the Great Depression but its gone into the extreme opposite direction of what he implied monetary inflating could be used for.

[Gingitsune]

Are the greeks preparing for a major war???

There's Turkey, but they also fear FYROM will try to annex Greek Macedonia... Talking of which, Greece can't leave the EU, or else, no one will oppose FYROM to enter the club under the Macedonia name.

There's probably Abania too, which isn't too stable (the same could be said of the neighboring Macedonia) and could fall into civil war at some point. Or could try to annex some Greek areas where Albanians are numerous. Especially if Greece looks weak. NATO would come to the rescue anyway, but having decent fire power at home would limit the size of the trouble. But the first potential threat is indeed Turkey, which could potentially turn rogue.

[+DieChecker]

So yet again it's the devious and feckless Greeks to blame for cheating the benign and patriarchal EU? And the financial institutions of the EU can only look on in a bemused and hurt fashion that the Greeks have cheated them? And the Greeks will have to put up with 30 years of austerity as retribution for cheating the EU, who only lent them this money* out of the sheer goodness of their hearts, and weren't at all behaving in the fashion of a loan shark? No, actually that's unfair to loan sharks; they at least are astute enough to only select as their victims people who they think they might have a fair chance of successfully putting the squeeze on. A loan shark wouldn't stay in business long if they behaved like the EU Financial Institutions have, and, this is a nice irony, if the EU Financial Institutions were commercial banks the only way they could survive if they behave in this way would be by begging for enormous bailouts from the goverment.

* of which Greece actually saw hardly any at all, nearly all of it going straight to the Banks that Greece owed to

So the Debt the Greeks ran up is NOT their fault? And the excesses in their budgets are also not their fault? They should be allowed to continue with living way past their income? And Germany should finance that?

[+DieChecker]

I guess the 5 year beating the Greek nation took just wasn't enough for the Germans?

Germany had substantial debt relief in 1953 and the Marshall plan before it that saved its ****...thanks to its friends and allies... all Greece got was constant lectures, insults via the German press and threats. I don't know what your idea about helping a bankrupt nation is BUT loading more debt upon a country just doesn't seem right to me nor Paul Krugman. You qoute Paul Krugman but he is of the opinion that Greece needs less debt not more... he even goes as far as to say that what Germany and that tyrant Merkel are doing is criminal.

You can call it a beating, but the Greeks must have been living too far beyond their income, or they wouldn't have been so far in debt. A man making 40,000 a year, but spending 75,000 will call living on 55,000 taking a beating.

Loading more debt on a nation SHOULD sound pretty good to Krugman, that is what he proposes all the time. Spend money you don't have to stimulate the economy, isn't that what his primary mantra is?

What you are actually saying is that the Big Bad Germans (and IMF) should just GIVE the Greeks the money and call it forgiven and move on. Which to a point, I'd agree with. Looking at the numbers (very roughly) it is clear that the Greeks are likely not going to really pay off the debts, so reducing the payments and the principal is probably realistically what will have to happen. Or, the banks then risk loosing ALL the money.

Edited July 9, 2015 by DieChecker

[+DieChecker]

Why has Greece spent billions on their military in the first place? Are the greeks preparing for a major war??? If the answer is because of Turkey it doesn't make any logical sense. Both are NATO members.

Hey, those bronze spears and helmets don't make themselves you know.

[kartikg]

And this goes back to a point i made about the EU ideology, the EU comes before everything and anything.

But the bloody cheek of Germany going on about Greece paying debt, Is this the same Germany that had most of its World War 2 debt written off, So it could recover economically after the war. just as the German economy was Blitzed, So as the Greek one. But elections are coming up in Germany, Frau Merkel cannot entertain writing off the debt. so Greece will suffer.

German debt would have written off after ww2 but not without some indirect benefits to their creditors, for example USA would have had plans for establishing military base, asked them to join NATO etc etc all of which will be beneficial to the creditors and also it was the onset of cold war. You ask as though the money is owned by Merkel what if Germany held an referendum asking her citizens wether we should write off Greece debt the answer will be resounding no like the Greek referendum.

[questionmark]

You can call it a beating, but the Greeks must have been living too far beyond their income, or they wouldn't have been so far in debt. A man making 40,000 a year, but spending 75,000 will call living on 55,000 taking a beating.

Loading more debt on a nation SHOULD sound pretty good to Krugman, that is what he proposes all the time. Spend money you don't have to stimulate the economy, isn't that what his primary mantra is?

What you are actually saying is that the Big Bad Germans (and IMF) should just GIVE the Greeks the money and call it forgiven and move on. Which to a point, I'd agree with. Looking at the numbers (very roughly) it is clear that the Greeks are likely not going to really pay off the debts, so reducing the payments and the principal is probably realistically what will have to happen. Or, the banks then risk loosing ALL the money.

Mostly it will be the taxpayer loosing all the money because most of the Greek debt is held by EU institutions at this point, a minor amount is held by private organizations and citizens. And all know that the Greek won't be able to repay, but they will not give a haircut again unless Greece cleans up its act. They did that in 2010 and by 2011 Greece had just as much debt as in 2009.

[Harry_Dresden]

You can call it a beating, but the Greeks must have been living too far beyond their income, or they wouldn't have been so far in debt. A man making 40,000 a year, but spending 75,000 will call living on 55,000 taking a beating.

Loading more debt on a nation SHOULD sound pretty good to Krugman, that is what he proposes all the time. Spend money you don't have to stimulate the economy, isn't that what his primary mantra is?

What you are actually saying is that the Big Bad Germans (and IMF) should just GIVE the Greeks the money and call it forgiven and move on. Which to a point, I'd agree with. Looking at the numbers (very roughly) it is clear that the Greeks are likely not going to really pay off the debts, so reducing the payments and the principal is probably realistically what will have to happen. Or, the banks then risk loosing ALL the money.

You've failed to make the distinction between past Greek governments colluding with bankers and lax EU officials and governments that rubber stamped these Greek excesses... and the Greek people... the average Greek has very little to no debt. The Greek state was corrupted and took on more than it could handle. But this isn't about the past this is about solving and changing the present and that's not what's been going on in Greece for the past 5 years. Merkel and her cronies in the EU have been punishing Greece. Unemployment 30% GDP down 35% social cohesion in a shambles and no light at the end of the tunnel...

I don't know where you get your information about Krugman, but his call is for debt relief NOT loading on more debt. If you and Merkel think that the Greeks won't pay back any monies then maybe the EU should have just kicked Greece out 5 years ago... but guess what? They didn't and you want to know why? Well cause Greece and its suffering people were used as a firewall to protect German and European banks and other larger in trouble EU nations like Spain and Italy and even France. So when Tsipras says that Grrece has been a experimental debt laboratory he's absolutely right... put yourself in Greece's position. What if you couldn't manage your mortgage and the bank convinced you that MORE debt would solve your problems... and 5 years latter nothing has changed and your living standard has dropped. Greece finds itself in the same position and the social problems have just compounded its problems. Suicide in Greece has become epidemic and families are torn apart. And I blame the Germans!

If I was a Greek I'd be telling the banks to jump and to take Merkel too and I'd not be ashamed to default on a "bailout" plan that has utterly failed and only made things worst.

[Harry_Dresden]

Mostly it will be the taxpayer loosing all the money because most of the Greek debt is held by EU institutions at this point, a minor amount is held by private organizations and citizens. And all know that the Greek won't be able to repay, but they will not give a haircut again unless Greece cleans up its act. They did that in 2010 and by 2011 Greece had just as much debt as in 2009.

question mark suits you well as a login cause you have no answers. Just to educate you. The reason that EU institutions have the debt that is backed by sovereign euro nations is cause Greece was convinced not to default when they were well within their rights too and then loaded with even more debt so the Germans could protect their beloved EURO. In other words Greece was the sacrificial lamb and now that it's become expendable and excess to requirement it is forced out of the currency that it saved unwittingly with its blood sweat and misery.

But here's the best part questionmark... Greece has won the propaganda war and if Merkel thinks that Greece will be hamstrung with the debt like Argentina then she is badly mistaken. Geopolitics and strategic interests will solve this problem once Merkel leaves office. Merkel and the Germans know this but that vindictive b**** just isn't happy with the 5 years sentence she's imposed on Greece and wants more.

I think Churchill said it best when he said 'if the German isn't grovelling at your feet then he's got his foot on your neck.'

[Mikko-kun]

I think that's true; trading blocs based on geography are surely old hat now. Even for tangible goods (as opposed to information technology and so on), it's pretty much irrelevant where any particular country that one trades with is, isn't it. I suspect that's probably why the leaders of the EU have become so undemocratic and their power has become so authoritarian, because they realise that their organisation is losing its main reason for existence in the first place.

Location makes a difference in trading, work quality is very high in here Finland, but transport costs and times give us a disadvantage. Germany has the greatest advantage in that perspect, so it can afford a more risky trade policy. They dont realise how much closing the market can hurt eastern european economies.

Greece could refuse to pay and strengthen their domestic economy and warm up trading with Russia and any other oddball. It'd save everyone a headache. I know from personal experience it's not fun to wait them to pay big bucks when you know they can walk out any time. I'm not into breaking bones for money I can get in a year or less even with small income, doubt EU would use any military force on Greece either. Who'd like to be on EUu after that? They know it, ball's on them

[Deleted]

question mark suits you well as a login cause you have no answers. Just to educate you. The reason that EU institutions have the debt that is backed by sovereign euro nations is cause Greece was convinced not to default when they were well within their rights too and then loaded with even more debt so the Germans could protect their beloved EURO. In other words Greece was the sacrificial lamb and now that it's become expendable and excess to requirement it is forced out of the currency that it saved unwittingly with its blood sweat and misery.

But here's the best part questionmark... Greece has won the propaganda war and if Merkel thinks that Greece will be hamstrung with the debt like Argentina then she is badly mistaken. Geopolitics and strategic interests will solve this problem once Merkel leaves office. Merkel and the Germans know this but that vindictive b**** just isn't happy with the 5 years sentence she's imposed on Greece and wants more.

I think Churchill said it best when he said 'if the German isn't grovelling at your feet then he's got his foot on your neck.'

Though l like most part of your post, you could have spared the last sentence. Churchill said it within another context (WW2), and principally I am against an attitude which demands submission. Cooperation, unity and equality is the key not submission which leads logically to more conflict.

[Harry_Dresden]

Though l like most part of your post, you could have spared the last sentence. Churchill said it within another context (WW2), and principally I am against an attitude which demands submission. Cooperation, unity and equality is the key not submission which leads logically to more conflict.

Yeah in hind sight I probably could have left it out mate but the fact is when the Germans needed debt forgiveness they got it and now that the situation is reversed it seems that empire comes before solidarity. I mean what is the EU preserving afterall?

[questionmark]

Yeah in hind sight I probably could have left it out mate but the fact is when the Germans needed debt forgiveness they got it and now that the situation is reversed it seems that empire comes before solidarity. I mean what is the EU preserving afterall?

How fast do we forget that the EU pumped 280 billion into Greece for infrastructure measures before they went bankrupt. About 1/3 of that came from Germany. And about 180 billion disappeared into a black hole after arriving in Greece.

[Harry_Dresden]

How fast do we forget that the EU pumped 280 billion into Greece for infrastructure measures before they went bankrupt. About 1/3 of that came from Germany. And about 180 billion disappeared into a black hole after arriving in Greece.

Germany is not a charity. It has become paymaster for Europe for a reason. It now controls an economic empire. Life and financial death over anyone that displeases it or rocks the boat. Germany has a export driven economy that feeds off the rest. Nothing wrong with being sussessful but playing judge and executioner to punish a people is not what the EU was meant to do.

This supposed black hole surely wasn't just uncovered after Greece ran into trouble? Those sneaky Greeks.

[questionmark]

Germany is not a charity. It has become paymaster for Europe for a reason. It now controls an economic empire. Life and financial death over anyone that displeases it or rocks the boat. Germany has a export driven economy that feeds off the rest. Nothing wrong with being sussessful but playing judge and executioner to punish a people is not what the EU was meant to do.

This supposed black hole surely wasn't just uncovered after Greece ran into trouble? Those sneaky Greeks.

See, and there is where my critique over left wing welfare rhetoric comes in again: It is just the fault of those who were giving... nobody else did nothing and therefore they deserve more.

[Deleted]

Yeah in hind sight I probably could have left it out mate but the fact is when the Germans needed debt forgiveness they got it and now that the situation is reversed it seems that empire comes before solidarity. I mean what is the EU preserving afterall?

yeah Germany has the "imperial" attitude, they treat Greece as their vassal , the EU ought to be a UNION. Also as mentioned 1000 times already Greek is mostly in the situation because they have the euro, and because of the stupid policies which the creditors forced onto her.

[Harry_Dresden]

What about the Irish, Spanish, Italians? The French agricultural industry extorts more EU funds than the rest of the PIIGS combined. The British and rest are no Angels either. I guess Merkel will just file away all the fraudulent national theft for the future just in case any of them have the cheek to challenge her authoritah.

I think it's time for Hollande and Renzi to make a stand and provide some alternative leadership or at the least balance Merkels excesses.

[Harry_Dresden]

attention questionmark...having problems quoting.

Not sure I understand what you're saying in your last post bud or whether your being sarcastic. But if you're referring to Syriza casting blame on Merkel then he has every right to defend his improvised nation and its beaten down people.

Where was Merkels threats of kicking Greece outta the euro in 2010? I don't remember anyone forcing Merkel to bailout Greece. Hell she even instigated a coup to remove an elected leader in order to get someone to do her biding and NOW that she doesn't need any agreement puppet she feels that Greece has no place in the euro. That's a fact... will you comment on that?

[questionmark]

attention questionmark...having problems quoting.

Not sure I understand what you're saying in your last post bud or whether your being sarcastic. But if you're referring to Syriza casting blame on Merkel then he has every right to defend his improvised nation and its beaten down people.

Where was Merkels threats of kicking Greece outta the euro in 2010? I don't remember anyone forcing Merkel to bailout Greece. Hell she even instigated a coup to remove an elected leader in order to get someone to do her biding and NOW that she doesn't need any agreement puppet she feels that Greece has no place in the euro. That's a fact... will you comment on that?

Britain used to be the balance point that sided as needed with France or with Germany to avoid most national egotisms. Britain lost that role since they are talking leaving the EU and the other possibility, Poland, is not yet strong enough. Italy has the boss of the ECB, therefore too mighty already to make a honest broker. So don't hold your breath.

[Grey Area]

So, am I seeing this right? None of this is Greece's responsibility, corruption and mismanagement hasn't been rife in the Greek government? Bad Euro for giving a bankrupt country more money? What people are basically saying is that out of an 11 million population Greece was unable to find even one half decent economist to warn of the dangers of borrowing.

That's total BS, and everyone here who feels at ease to lay the blame solely on the shoulders of the EU and Germany is deluding themselves, because I'll tell you one thing, if Greece had not have received a bailout in 2008 the consequences of that would have been equally as contentious as the issue we face now .

I don't deny the responsibility of the creditors, but Greece is a big boy and needs to own the consequences of some very poor fiscal decisions.