Quotulatiousness

March 1, 2012

A Kickstarter campaign for … Greece

Filed under: Europe, Greece, Humour, Media — Tags: , , — Nicholas @ 13:12

I guess it’s about their last available option:

Greece is a small country in the south of Europe known for inventing democracy and western philosophy and for its national motto, “Release the Kraken!” Our shores are a popular destination for backpackers and tourists wishing to relax amid sun-drenched beaches by day and intoxicated British tourists by night.

We wish to continue this good work, but to do so our creditors are demanding €14.5 billion ($18.6 billion) by March 20. We do not have this money, nor do we think we can raise it in time: Our asset sales have gone nowhere, and the EU has nixed our plan to close shop and re-open a few blocks away as “Greeze”. And so we come to you, our friends, for help.

A donation of any amount is appreciated, and gifts are available for those who give at premium levels. We promise these funds will be used only to pay down debt, and any funds received above the requested amount will be rolled over to our next, inevitable Kickstarter campaign.

February 28, 2012

Did Greece get bailed out or did it default? A little from column A and a bit from column B

Filed under: Economics, Europe, Government, Greece, Politics — Tags: , , , — Nicholas @ 09:56

Detlev Schlichter explains what happened in the “big fat Greek bailout”:

Greece was bailed out for the second time in four months. Or did it default? Well, a bit of both, I guess.

All bondholders are equal. But some are more equal than others. If you are the ECB, your Greek bonds were exchanged, par for par, for new Greek bonds, and you can go on pretending that they are worth their principal amount. You won’t have to report a loss for now. But if you are a ‘private’ entity — and that is a rather loosely used term these days as it includes the banking industry which is either now partially owned by the state or to a considerable degree dependent on ongoing support from the lender-of-last resort — more than half your Greek investment was wiped out. So Greece defaulted. But as you ‘agreed’ to the ‘haircut’ it was in fact a ‘voluntary restructuring’, although you really had no choice.

[. . .]

I guess we shouldn’t lose sight of the fact that Greece’s economic model is fundamentally unsustainable, whichever way you cut it. Greece has been living beyond its means for a long time, and has managed to do so by flying under air-cover of the EMU project and with the tailwind of cheap credit and easy money. Spending by the Greek state accounts for more than half of registered economic activity, and a third of the workforce is employed by the public sector. ‘Activities’ are being subsumed under the heading of ‘Greek GDP’ that nobody would voluntarily pay for, that are to a large degree wasteful, and that are simply unaffordable under anything but the most bizarrely generous credit conditions, i.e. precisely those that Greece enjoyed from 2001 to 2008. Easy money has been used to paper over grave economic imbalances. Some of what is generously labelled ‘GDP’ should be discontinued — and fast.

To even suggest that such an economic model would be manageable if Greece, a country with about three quarters of the population of metropolitan Los Angeles but with less than half of L.A.’s GDP, only had its own paper currency and could inflate and devalue to its heart’s content, is economically illiterate. No country ever prospered by running budget deficits funded by the printing press or by creating domestic inflation. Devaluing your currency may give your exporters a shot in the arm — for about five minutes. But it scares your domestic savers away for years to come and severely diminishes your ability to keep or attract capital, the backbone of any sustainable economic model. To even try and attempt to ‘inflate away’ a debt load worth 160 percent of a generously calculated GDP would cause economic damage of gigantic proportion. One must have swallowed the Keynesian mythology of deficit-spending whole to believe that the country could borrow and print itself out of this mess. A proper default on its existing debt and rebuilding from a lower base — but with a hard currency — are the better options.

February 21, 2012

Greece: “now officially a ward of the international community”

Filed under: Economics, Europe, Government, Greece — Tags: , , , — Nicholas @ 10:40

Felix Salmon on the dire Greek financial future:

Greece is now officially a ward of the international community. It has no real independence when it comes to fiscal policy any more, and if everything goes according to plan, it’s not going to have any independence for many, many years to come. Here, for instance, is a little of the official Eurogroup statement:

    We therefore invite the Commission to significantly strengthen its Task Force for Greece, in particular through an enhanced and permanent presence on the ground in Greece… The Eurogroup also welcomes the stronger on site-monitoring capacity by the Commission to work in close and continuous cooperation with the Greek government in order to assist the Troika in assessing the conformity of measures that will be taken by the Greek government, thereby ensuring the timely and full implementation of the programme. The Eurogroup also welcomes Greece’s intention to put in place a mechanism that allows better tracing and monitoring of the official borrowing and internally-generated funds destined to service Greece’s debt by, under monitoring of the troika, paying an amount corresponding to the coming quarter’s debt service directly to a segregated account of Greece’s paying agent.

The problem, of course, is that all the observers and “segregated accounts” in the world can’t turn Greece’s economy around when it’s burdened with an overvalued currency and has no ability to implement any kind of stimulus. Quite the opposite: in order to get this deal done, Greece had to find yet another €325 million in “structural expenditure reductions”, and promise a huge amount of front-loaded austerity to boot.

February 16, 2012

Getting rid of that messy, obstructive “democracy” thing in Europe

Filed under: Bureaucracy, Europe, Government, Greece, Liberty — Tags: , — Nicholas @ 10:40

Bruno Waterfield on the destruction of democracy in Greece and what it will mean for the rest of the European Union:

What happens in Greece will mark the opening of a new era in European politics. It is important therefore to understand what is and isn’t going on. The crisis is not, as many believe, being driven by ‘neoliberal’ economic policies. It isn’t caused by any Greek cultural propensity to fecklessness either. And, despite the protest graffiti and the timeless appeal of Nazi references, the Greek tragedy is not a plot to restore an explicit German hegemony in Europe. Angela Merkel is no Adolf Hitler.

What is happening in Greece is a crisis of European proportions because it is the sharpest expression of a destructive trend common to all countries in the EU: the twenty-first-century elite mission to place institutions, policy and statecraft above society. The Greek catastrophe, then, is an indicator of what happens when the question of interest or politics becomes the sole preserve of bureaucratic or state structures decoupled from, and increasingly defined against, the public.

Measures imposed on Greece are explicitly declared, even celebrated, as being in opposition to Greek society. Any attempt by political parties to uphold the democratic representation of Greek interests is met with aggressive hostility. Moreover, the EU-IMF programme, or so-called Memorandum of Understanding, for Greece is utterly divorced from economic reality. As documented in the Daily Telegraph, the Eurozone’s policies are pushing Greece into a ‘death spiral’ that defies any economic logic.

February 13, 2012

How Greece got into their predicament

Filed under: Economics, Europe, Government, Greece, Politics — Tags: , , , — Nicholas @ 10:18

Anita Acavalos wrote this article in 2010. It’s still relevant — perhaps even more so today:

Although at first glance the situation Greece faces may seem as simply the result of gross incompetence on behalf of the government, a closer assessment of the country’s social structure and people’s deep-rooted political beliefs will show that this outcome could not have been avoided even if more skill was involved in the country’s economic and financial management.

The population has a deep-rooted suspicion of and disrespect for business and private initiative and there is a widespread belief that “big money” is earned by exploitation of the poor or underhand dealings and reflects no display of virtue or merit. Thus people feel that they are entitled to manipulate the system in a way that enables them to use the wealth of others as it is a widely held belief that there is nothing immoral about milking the rich. In fact, the money the rich seem to have access to is the cause of much discontent among people of all social backgrounds, from farmers to students. The reason for this is that the government for decades has run continuous campaigns promising people that it has not only the will but also the ABILITY to solve their problems and has established a system of patronages and hand-outs to this end.

Anything can be done in Greece provided someone has political connections, from securing a job to navigating the complexities of the Greek bureaucracy. The government routinely promises handouts to farmers after harsh winters and free education to all; every time there is a display of discontent they rush to appease the people by offering them more “solutions.” What they neglect to say is that these solutions cost money. Now that the money has run out, nobody can reason with an angry mob.

[. . .]

Greece is the perfect example of a country where the government attempted to create a utopia in which it serves as the all-providing overlord offering people amazing job prospects, free health care and education, personal security and public order, and has failed miserably to provide on any of these. In the place of this promised utopian mansion lies a small shack built at an exorbitant cost to the taxpayer, leaking from every nook and cranny due to insufficient funds, which demands ever higher maintenance costs just to keep it from collapsing altogether. The architects of this shack, in a desperate attempt to repair what is left are borrowing all the money they can from their neighbours, even at exorbitant costs promising that this time they will be prudent. All that is left for the people living inside this leaking shack is to protest for all the promises that the government failed to fulfil; but, sadly for the government, promises will neither pay its debts nor appease the angry mob any longer. Greece has lost any credibility it had within the EU as it has achieved notoriety for the way government accountants seem to be cooking up numbers they present to EU officials.

H/T to Steve Baker MP for the link.

Greek government expands categories of disabled to include “compulsive gamblers, fetishists and sadomasochists”

Filed under: Bureaucracy, Europe, Government, Greece, Health — Tags: , , , , — Nicholas @ 10:04

At a time most people expect the Greek government to be cutting back, the Labor ministry just expanded the recognized disabilities to include a few categories that will raise eyebrows:

Disability groups in Greece expressed anger on Monday at a government decision to expand a list of state-recognized disability categories to include pedophiles, exhibitionists and kleptomaniacs.

The National Confederation of Disabled People, calling the action “incomprehensible,” said that pedophiles could be eligible for a higher disability pay than some people who had received organ transplants.

The Labor Ministry said the categories added to the expanded list — that also includes pyromaniacs, compulsive gamblers, fetishists and sadomasochists — were included for purposes of medical assessment and used as a gauge for allocating financial assistance.

Der Spiegel: Is it too late to save Greece?

Filed under: Bureaucracy, Europe, Government, Greece — Tags: , — Nicholas @ 08:48

The Greek civil service is overstaffed, and has lots of quirky habits, proving the old adage that there’s nothing as permanent as a “temporary” government program:

One of Greece’s purported saviors is a short, rotund, 72-year-old man named Leandros Rakintzis. He was once a respected constitutional judge on the country’s highest court, the Areopagus. Since 2004, he has been the head of a government agency that is the first of its kind for Greece. Rakintzis is Greece’s general inspector of public administration.

His body twitches and shakes with delight as he talks about his successes and discoveries. For example, he discovered that on weekends, hospitals admit elderly people who require nursing care or are confused because their children bring them there so that they can take a few days of vacation. This, of course, drives up healthcare costs.

[. . .]

Rakintzis has stories to tell that take place throughout Greece, and some are downright unbelievable. For example, the government agency that was created to manage a bid to make Greece’s second-largest city, Thessaloniki, a European cultural capital in 1997 is still humming away. Its employees are supposedly working on winding down the major event and settling up the accounts — 13 years later.

How many people work there? “I don’t know. Not even the government knows that,” says Rakintzis. He adds, in an almost threatening tone: “Not yet.” Rakintzis and his staff are now in the process of investigating about 4,000 government offices and agencies in similar situations.

[. . .]

Greece has more than five times as many civil servants per capita than the United Kingdom. The country’s inflated government apparatus consumes tens of billions of euros a year. It’s money the Greek state doesn’t have — and actually never did. Greece’s gross domestic product is only slighter higher than that of the German state of Hesse and is just one-tenth the size of Germany’s total economic output.

February 8, 2012

A spectre is haunting the EU elite: the spectre of democracy

Filed under: Bureaucracy, Europe, France, Greece, Politics — Tags: , , — Nicholas @ 10:25

Bruno Waterfield on the worries of the movers and shakers in the fancy office suites in Brussels:

The European Union is currently straining every sinew in a campaign to stifle outbreaks of politics across Europe.

For the EU oligarchs, democracy sucks. What if the Greeks — voting in elections this April — decide to tear up an austerity programme painstakingly hammered out by their betters in the EU and the IMF? Imagine — and the memory of all those lost referendums still smarts among Eurocrats — if a country should decide it has had enough of the economic mismanagement and diktat that has characterised the Eurozone’s handling of the economic crisis.

A spectre is indeed haunting the corridors of Brussels offices and it is real: a well-founded fear that voters will reject the ‘fiscal compacts’, ‘debt brakes’ and ‘golden rules’ aimed at securing the EU’s reign in de facto perpetuity.

[. . .]

Pierre Moscovici, the Socialist campaign manager, has further horrified the EU by hinting that a new French president could hold a referendum — a taboo in contemporary European politics. ‘I am convinced that we will find allies for a renegotiation aimed at a policy change to pull us out of this austerity spiral and recession. We don’t like the idea of a popular vote because we are pro-Europeans and we don’t want a “No”, but nor can we allow tensions to spill over’, he said last week.

January 31, 2012

Germany issues “secret” document to Greek government on debt repayment

Filed under: Economics, Europe, Germany, Government, Greece, Politics — Tags: , — Nicholas @ 09:41

Mick Hume recounts the machinations within the European Union:

One outraged Greek government minister described it as ‘the product of a sick imagination’. Another called it ‘absolutely laughable’. The formal title of the document in question is ‘Assurance of Compliance in the Second GRC Programme’. It is neither a joke, nor a sick fantasy. It reads more like the draft of a death warrant for democracy, first in Greece and then elsewhere in Europe.

This supposedly secret document was issued by Angela Merkel’s German government to its partners in the Eurozone — and then carefully leaked, to ensure maximum impact. It sets out two extraordinary measures that the Germans want to impose to ensure that the Greek authorities comply with the swingeing budget cuts which they promised but have apparently failed to deliver to the markets’ satisfaction.

First, it says Greece must ‘legally commit itself to giving absolute priority to future debt service’. All state revenues must go first to paying debts and interest due, before a cent can be spent on public services. And the Greek government will not be allowed to threaten to default on its debts in future; if it cannot pay, it must accept that ‘further cuts’ will be ‘the only possible consequence’.

Second, the Germans want the Eurozone to oversee the ‘transfer of national budgetary sovereignty’ from Greece to ‘the European level’ under a ‘strict steering and control system’. The plan is for the Eurozone group to appoint a budget commissioner to oversee Greek finances, with the power ‘to veto decisions not in line with the budgetary targets’ set by European and international officials. If that was not humiliating enough, the Greeks would also have to look happy to bend the knee by ensuring that this new system of outside control ‘is fully enshrined in national law, preferably through constitutional amendment’.

To get the Greeks to agree to these unprecedented conditions, the German document also offers incentives — or as we used to call it, threats. If Athens does not accept the compliance measures, then ‘the Eurozone will not be able to approve guarantees for GRC II’. That is the second huge bailout of €130 billion which Greece desperately needs if it is not to go officially bust in weeks. The ‘Assurance of Compliance’ document is a ‘secret’ blackmail note.

Update: Ah, Monty captures the absurd state of the EU perfectly in a throw-away line in today’s Daily DOOM — “Like German porn, the politics of the Greek bailout just keep getting weirder and more complicated.”

December 7, 2011

Greek army reduces from 30 to 19 brigades

Filed under: Europe, Greece, Military — Tags: , , , , , — Nicholas @ 09:15

Strategy Page lists the initial impact on the Greek armed forces due to the financial squeeze:

The current financial crisis in Greece has led to enormous cutbacks in government spending. The military has not been exempt. This year alone, the defense budget will be cut about a third. Over the next two years, the reduced budget will be cut another 15 percent. The army will lose 11 of its 30 brigades, but the air force has disbanded one of 16 squadrons, but kept the aircraft in service by moving them to surviving squadrons. The navy has retired some older patrol boats.

The army is apparently coping by disbanding many reserve units and retiring older tanks and equipment. There won’t be much new equipment purchased for the next few years, at least. Training will also be cut, because operating vehicles, aircraft and ships for these exercises is expensive. The reduction of training will decrease the combat capabilities of the troops. But the government does not want to dismiss lots of the 156.000 active duty troops. That will just increase the already high (approaching 20 percent) unemployment rate. It’s never a good idea to have a lot of professional soldiers among the unemployed.

November 24, 2011

Nigel Farage on “German-dominated Europe”

Filed under: Bureaucracy, Economics, Europe, Germany, Greece, Italy — Tags: , , — Nicholas @ 08:59

November 17, 2011

Snapshots from Greece

Filed under: Economics, Europe, Germany, Greece, Media, Politics — Tags: , — Nicholas @ 07:54

Brendan O’Neill has a few snippets from Athens:

‘Prime ministers should be chosen by us, not Angela Merkel,’ says the taxi driver taking me to the Acropolis. Taxi drivers here love talking politics, and they love hating Merkel. She’s treated as the arch villain of this tragedy. Magazine covers show a massive Merkel playing with Greek politicians as if they were dolls. Graffiti invites her to do things that are probably anatomically impossible. My advice to her is to avoid visiting Greece for the duration of The 100 Days. Probably longer.

•••

The taxi driver also tells me he can’t relate to Papademos. ‘He’s not a man of the people’. But it’s precisely Papademos’s lack of experience in dealing with the grubby, demanding demos that endears him to the EU elite, which fought tooth-and-catapult to have him installed as PM. As one European economist put it: for Brussels the great thing about Papademos is that he ‘speaks the language and shares the philosophy of [the] EU and ECB’ and that he ‘comes in without officially representing a party’. That is, he’s apolitical, unchosen, boring and bureaucratic — just the kind of politician the EU likes. It’s already a cliché, but that doesn’t stop it being true: Athens is now both the birthplace and graveyard of European democracy.

•••

Yet the graffiti expresses exasperation as well as anger — a deep disappointment with Greek workers. Commonly scrawled phrases are ‘Wake up!’ and ‘Stop being slaves!’ You get the impression that the Greek left, which is rowdier and noisier than its western European counterpart, is as annoyed with the masses as it is with Merkel. In Syntagma Square, nothing much remains of the radical protest camp that so excited outside observers earlier this year and which provided the template for the global ‘Occupy’ movement. There is just a memorial tree, with political paraphernalia attached to it in remembrance of the camp. It’s like one of those shrines that pops up on roadsides where someone has been killed by a speeding car, only it is adorned, not with wreaths, but with balaclavas, goggles and batteries (which were thrown at the police). It has the unwitting whiff of being a gravestone not only for the Greek left, but for Greek politics itself.

November 13, 2011

The report from Greece

Filed under: Economics, Europe, Germany, Greece — Tags: , — Nicholas @ 12:16

Michael Petrou and Stavroula Logothettis survey the Greek debt crisis in a report that Maclean’s cheekily headlines “Acropolis Now”:

“We are finished as a nation,” says Marko Gjini, a 39-year-old unemployed construction worker in Athens. “The country has been sold off. We have no say in anything anymore. Greece is owned by the Germans.”

Like many Greeks these days, Gjini is bitter and despondent because of his country’s financial mess, and the austerity measures that have been imposed in an effort to contain it. His wife, Aleka, a public hospital nurse, has seen her income drop from 1,200 euros a month to 800 euros. Now, facing more taxes and cuts to public expenditures, the family expects to have a net monthly income of less than 500 euros. Marko and Aleka are investing whatever money they can toward English lessons for their twin eight-year-old boys in the hope that they might have a better future somewhere else. “Let the government fall,” says Gjini, “[German Chancellor Angela] Merkel is the boss now anyway.”

[. . .]

For Vaso Gildizi, a Greek freelance writer, events in Cannes were “a national humiliation for the country.” The Greek prime minister was scolded like a schoolboy and sent home. The incident didn’t sit well with many Greeks who were already sour on the bailout deal and the euro itself.

“We’re bankrupt,” says 44-year-old Vasilia Paneli, owner of Bliss, a trendy café a short walk from Syntagma Square and the parliament in Athens. “We know it. The EU knows it. And yet we continue this Greek tragedy. A referendum would at least give us a voice, a chance to speak up for our future.” Paneli was unmoved by French and German threats that a referendum on the bailout deal would have meant a vote on whether to remain in the eurozone. She’d rather Greece leave it. “It’s self-serving,” she says. “I say let’s go back to the drachma.”

[. . .]

William Antholis, a senior fellow at the Brookings Institution think tank, likens flirting with a return to the drachma to “threatening suicide to avoid a lynching.” Greece is in for a painful few years whatever happens, he said in an interview with Maclean’s. The austerity measures are going to bite. But leaving the euro, he says, would be disastrous. The costs could include a run on Greek banks, as people sought to withdraw euros before they were changed to drachmas. Some banks would probably collapse. Greece would likely default on its debts, and would be unable to pay pensions and salaries. Some sectors of the economy built on export might benefit from a new, devalued currency, but at the expense of much heavier blows elsewhere.

November 4, 2011

Opening moments of the G20 in Cannes

Filed under: France, Government, Greece, Italy, Media, Politics — Tags: , — Nicholas @ 09:01

From the tone of the article, even the Guardian is finding it hard to take the politicians seriously this time:

The red carpet was drenched and sodden, the palm trees battered by a storm and even the trumpet fanfares of the French Republican Guard were muffled by the wind.

Nicolas Sarkozy’s glittering G20 summit at Cannes was supposed to be a showcase for his skill as the caped crusader: Super Sarko, fighting his way through the markets and eurozone crisis to rescue his personal damsel in distress, France’s endangered AAA-credit rating.

Instead, the opening hours on the French Riviera seemed more like a muted crisis-gathering of head-scratching politicians, some staring into the jaws of political death, fearing being punished at the ballot box or hung out to dry by their own governments.

Even without the specially summoned whipping boy, the Greek prime minister George Papandreou — who had a constantly furrowed brow and clasped hands, as pressure was heaped on him over his resignation-referendum ping-ping — the red-carpet arrivals ceremony often looked like a roll call of doom.

Silvio Berlusconi arrived in the rain with a huge black overcoat perched on his shoulders, shoulder pads visible from space, likened by his own press corps to a mafia boss from the Sopranos.

November 3, 2011

The “Euro-elites now see democracy not so much as a distraction, more as a disaster or even a death-threat”

Filed under: Europe, Greece, Politics — Tags: , , — Nicholas @ 12:12

With the agonized screaming coming from the various offices of the European Union, you’d think Greek Prime Minister George Papandreou’s announcement of a referendum was the next-best thing to the emergence of the Antichrist. Mick Hume explains that the reason the Eurocrats took it so badly is that, from their point of view, democracy is Kryptonite:

‘If voting changed anything, they would make it illegal.’ So goes the famous old slogan, attributed to the anarchist Emma Goldman, expressing radical cynicism about the capitalist elites’ traditionally contemptuous attitude to political democracy.

In the current Euro-crisis, however, it appears that matters have gone further still. Europe’s political, media and economic elites are now so insecure, isolated and fearful of any hint of popular opposition that even the suggestion of giving Greeks a vote seemed to change everything for them — and some of them would clearly like to make such referendums illegal if they could.

No sooner had Greek premier George Papandreou announced his plan for a referendum on the latest Euro bailout and austerity package than, in two shakes of an imaginary ballot paper, all that the elites hold dear had apparently been destroyed: the ‘historic’ deal to save Europe agreed days earlier was now reportedly ‘in ruins’, the financial markets were sinking like stones, there were warnings that the Euro itself was now in mortal danger and even that the world was heading for a global depression. All this panic and chaos, apparently, because somebody suggested the outrageous idea of giving the Greek people a say on their future? No wonder that many in authority talk as if they really would like to ban voting today.

[. . .]

Papandreou’s announcement of a referendum, described even by the sober BBC as a ‘nightmare’ for Europe, could hardly have caused more shock, anger and revulsion in high places if somebody had placed a bomb under this week’s G20 summit in Cannes. The mood of Europe’s rulers was captured by President Sarkozy’s French regime, which described the Greek prime minister’s dalliance with democratic politics as ‘irrational and dangerous’. Trying to square this disdain for public opinion with his own need to seek re-election by the French people, Sarkozy himself has generously conceded that ‘giving people a voice is always legitimate’ before adding the obligatory ‘but…’: ‘the solidarity of all Eurozone countries is not possible unless each one agrees to measures deemed necessary’. In other words, whatever the Greek or any other electorate wants, their government will have to adopt those ‘measures deemed necessary’ by the Euro-elite, primarily the Germans and the French, if they want to remain members of the club.

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