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Greek Democracy Causes Panic
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bobbdobbs
I haven't seen my friends in so long
Joined: Thu Apr 23, 2009 7:10 pm Posts: 5490 Location: just behind you!
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So a Politician voted in to deal with the problems of governing decides that what needs to be done is going to be too unpopular decides to go "to the people" thus avoiding the responsibility. Of course if the greek government actually collected the taxes they should and the politicians that decided Greece met the criteria to join the Euro actually said "no effing way" then this wouldnt be a problem.
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Thu Nov 03, 2011 2:26 pm |
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jonbwfc
What's a life?
Joined: Thu Apr 23, 2009 7:26 pm Posts: 17040
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Quite so. However the bare fact is that there has in fact been little democratic consultation on the 'euro project' and when there was and the people voted the 'wrong' way they were famously told to go back and do it properly. The population of the UK was never given any real say on the Maastricht treaty and we now find nice-but-dim is fleeing from his promise to hold a referendum on further integration.
So you can't really say 'we voted for the politicians so it's everybody's fault'. Politicians routinely renege on the promises they make in their manifestos. We actually only get a say retrospectively - we get to vote out people who do things we haven't agreed to but we never get a guarantee that the people we vote in will do what they said they would or that they won't do things we don't approve of once they're in.
The Greek government have very much contributed to the situation their state is in. However the leaders of the other countries are proposing a solution which requires everyone else to put in, and nobody in the other countries is being given a say in that plan. The Greeks getting to vote on whether they want to be saved is one thing, Why hasn't there been a vote in France or Germany to decide if the people of those countries want to make sacrifices to save them?
I have no actual problem with the idea of the Euro - I think it's a good idea on principle. I just think the whole project has been implemented in such a hubristic and arrogant way by set of people acting way beyond their mandate that I'm actually not at all surprised it's failing.
Jon
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Thu Nov 03, 2011 2:53 pm |
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ShockWaffle
Doesn't have much of a life
Joined: Sat Apr 25, 2009 6:50 am Posts: 1911
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The general idea of sovereign debt restructuring is that (like Argentina) you force the majority of your creditors to accept a pittance in return for actually paying them, then you pay more to get the last few holdouts and maybe a couple of vulture funds off your back. But that applies to old defaults that lacked this one's political dimension. You are in default from the moment you stop paying your creditors to the moment at which everyone agrees you are now paying again. When you are in default you cannot go to the money markets, there is nobody there who is allowed to buy your bonds if you have a junk rating. And until you exchange your debt, which requires creditor consent, no agency can rate your next issue as anything other than junk. Sure you can still sell bonds, but you have to have willing buyers outside the normal market. For the most part you sell them to your own citizens, Argentina also sold them to Chavez I believe. The necessity of raising finance entirely from the citizens has some very serious effects on things like the number of your citizens that you can afford to disburse the funds to - so you have to cut pensions, teachers and all that other stuff that the Greeks have failed to address so far. You basically take a government that you are unable to fund through taxation, and you fund it instead through a series of forced loans from the people who weren't paying you the tax. If you can't increase tax revenue, and if you can't force the people to loan you money, AND you can't cut spending fast enough, you print money faster. You have to, because the alternative lies in not paying soldiers, and in Greece that usually results in a coup. Argentina was able to bully most of its investors into taking a massive haircut. Greece is already getting 50% on that score for its privately held bonds. If it defaults it might get an extra 20% knocked off of most of those. But here's a nice list compiled by BarCap in July of who is exposed to Greek debt and the numbers involved (some of which are estimates) http://www.leimonis.com/wp-content/uplo ... olders.jpgPositions 1,2,5 & 7 are all held by organisations that will not be making that decision on commercial grounds, it's political. Those are the people who also have to pony up for Ireland, Portugal, Italy, and if it comes to it maybe even Belgium and France, but only IF this new Greek thing spreads around. If the markets don't believe Ireland, Portugal and Italy would dare default, it becomes less likely that any such default will be forced. So if these debt holders allow Greece to restructure its debt, or show any sign of letting it out of default for at least a decade, they are hosed. So they aren't going to take a huge haircut for the sake of convenience, as it would immensely inconvenience them, and they won't do so on economic grounds, as it would cost them massive sums of money. They will therefore not accept new bonds for old, and Greece will not emerge from default for a very long time. So for all of the extra pain they get, they will save very little money. If they go ahead and hold the referendum, we will get an idea of how much money the French and Germans think it would save them by watching whether those countries start talking about sweetening the deal somehow, or just ratchet up the threats. Well, first of all, this is the Greeks, so who exactly is expecting reasonable controls as part of their monetary policy? More importantly, you can only afford those controls if your fiscal policy is sound. This vote they are having is all about them not liking sound fiscal policy, and the crisis is presently upon them because they have never had one.
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Thu Nov 03, 2011 8:42 pm |
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phantombudgie
Doesn't have much of a life
Joined: Wed Aug 19, 2009 1:45 pm Posts: 994
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I'm of the view (in my very unknowledgeable opinion) that only those with at least some idea of basic economics should be deciding. This does not include me. As for wisdom of the crowds, there may be a theoretical basis for it, but the thought of all the people I know trying to decide on monetary policy is terrifying  (just think of the UK's current credit card debt levels). I'm guessing that the wisdom of the crowd only applies where people can begin to understand the problem (to take a more ridiculous example than that of the aforementioned nutritionist, you cannot find out the mass of a black hole by asking everyone to guess!) The other problem is, of course, that the economic experts got us where we are now There is however something dark yet inspiring about the way the French and German leaders are horrified at the thought of a democratic process taking place (even though I agree that this is not the time to ask the ignorant).
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Thu Nov 03, 2011 10:49 pm |
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HeatherKay
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Joined: Thu Apr 23, 2009 6:13 pm Posts: 7262 Location: Here, but not all there.
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Well, that leaves out any of the European governments, then. Seriously, I applaud Papandreou for standing up to the Euro Elitists. I think I'd want to ask the people who elected me to run the country if it was okay for other countries to demand they should be thrown into poverty to ensure debts are paid back. Seriously, if Merkel and Sarkozy can offer to write off 50% of the debt, why not all of it?
_________________My Flickr | Snaptophobic BloggageHeather Kay: modelling details that matter. "Let my windows be open to receive new ideas but let me also be strong enough not to be blown away by them." - Mahatma Gandhi.
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Fri Nov 04, 2011 8:52 am |
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jonbwfc
What's a life?
Joined: Thu Apr 23, 2009 7:26 pm Posts: 17040
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Doesn't look like the referendum is going to happen now. Merkel and Sarkozy spent the last day making phone calls to well, pretty much everyone else in the Greek government other than the PM and the foreign minister has come out and said he won't vote for the referendum. This has caused a bit of a panic in the greek parliament and it now looks like the PM won't be able to survive a coming vote of no confidence and will be out of his job by the end of next week.
And there was me thinking forcing regime change in another country was against the UN regulations.
Jon
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Fri Nov 04, 2011 9:23 am |
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Spreadie
I haven't seen my friends in so long
Joined: Fri Apr 24, 2009 6:06 pm Posts: 6355 Location: IoW
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One of the likely successors, Antonis Samaras, is already on record saying he wants to re-negotiate the terms of the Euro in favour of Greece; something which the other member states are vehemently opposed to.
There is real danger that Greece could drop (or fall) out of the Euro altogether, rather than face an electorate already on a knife edge with the austerity measures already in place.
There really isn't a sunny side to this situation at all, is there?
_________________ Before you judge a man, walk a mile in his shoes; after that, who cares?! He's a mile away and you've got his shoes!
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Fri Nov 04, 2011 9:44 am |
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ShockWaffle
Doesn't have much of a life
Joined: Sat Apr 25, 2009 6:50 am Posts: 1911
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Well the Greeks can finally learn that corrupt economies aren't productive. That not doing anything about the corruption is cripplingly expensive. That their traditional 19th century approach of getting into a pickle and then trying to play all the Great Powers off against each other to get it sorted out has stopped working. And that it's time for them to get their act together. Greece never got its national toilet training because it was a small low income country in what used to be a strategic location. Now its trousers are full and the time to become big boys has finally arrived. The question is whether they will master the big boys pot-pot, or flush themselves down it. If they crash out of the Euro they will be pretty much on their own, but they can still fix their problems that way if they don't kid themselves it will be easy. If they stay in the Euro, they will get more help, and they can fix their problems that way too, but it's still going to be very hard work. The only truly wrong thing they can do is pretend they aren't part of the problem, and demand an easy fix. But this, unfortunately, is Greece's longest standing tradition. That's the thing about toilet training. Clearing up the mess isn't pretty, but the long term advantage comes from not making the same mess again every day.
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Sat Nov 05, 2011 7:21 am |
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koli
Doesn't have much of a life
Joined: Fri Apr 24, 2009 5:12 pm Posts: 1171
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Are you sure you have your facts right? Greeks have cheated their way into EU by cooking their books, they have cheated by not complying with EU rules on deficits (and cooking their books agian) and now they want to cheat investors out of their money that they have borrowed on their ridiculous lazy ass economy. OUR MONEY!!! Not Sarkozy's and Merkel's money. Not EU's money. The write off offered will be suffered by PRIVATE investors. Which is your pension fund and ISA holding greek bonds. So when you come here to moan about your pension fund not growing just remember why that is...
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Sat Nov 05, 2011 8:51 am |
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HeatherKay
Moderator
Joined: Thu Apr 23, 2009 6:13 pm Posts: 7262 Location: Here, but not all there.
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Don't misunderstand me. I am very aware that this situation affects everyone. All I was pointing out was how shocked the EU leaders were when another leader they thought they were trying to help decided the former's electorate should have their say. Democracy is anathema to the EU. It's also entertaining to note how many words from Greek appear in the news covering it: chaos, for example. 
_________________My Flickr | Snaptophobic BloggageHeather Kay: modelling details that matter. "Let my windows be open to receive new ideas but let me also be strong enough not to be blown away by them." - Mahatma Gandhi.
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Sat Nov 05, 2011 9:29 am |
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MrStevenRogers
Spends far too much time on here
Joined: Fri Apr 24, 2009 9:44 pm Posts: 4860
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the EU now looks more like a 'dictatorship' greater then even Hitler imagined and they didn't have to invade this time ...
_________________ Hope this helps . . . Steve ...
Nothing known travels faster than light, except bad news ... HP Pavilion 24" AiO. Ryzen7u. 32GB/1TB M2. Windows 11 Home ...
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Sat Nov 05, 2011 9:44 am |
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ShockWaffle
Doesn't have much of a life
Joined: Sat Apr 25, 2009 6:50 am Posts: 1911
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Sat Nov 05, 2011 10:10 am |
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MrStevenRogers
Spends far too much time on here
Joined: Fri Apr 24, 2009 9:44 pm Posts: 4860
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'peace in our time'
read and weep ...
_________________ Hope this helps . . . Steve ...
Nothing known travels faster than light, except bad news ... HP Pavilion 24" AiO. Ryzen7u. 32GB/1TB M2. Windows 11 Home ...
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Sat Nov 05, 2011 10:16 am |
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HeatherKay
Moderator
Joined: Thu Apr 23, 2009 6:13 pm Posts: 7262 Location: Here, but not all there.
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There's another Greek word. 
_________________My Flickr | Snaptophobic BloggageHeather Kay: modelling details that matter. "Let my windows be open to receive new ideas but let me also be strong enough not to be blown away by them." - Mahatma Gandhi.
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Sat Nov 05, 2011 10:56 am |
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ShockWaffle
Doesn't have much of a life
Joined: Sat Apr 25, 2009 6:50 am Posts: 1911
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Good point. We could probably find some way to include xenophobia and hysteria in this thread too  I will award additional points to anyone who successfully crowbars onomatopoeia into conversation. Ooh, no, actually I've got that one too... What sound will it make if you drop your bus fare in Athens next year? Thud.
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Sat Nov 05, 2011 11:14 am |
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