Saturday, July 11, 2015

Bundesregierung — Comments on the latest Greek proposals


Very short.

European leaders don't trust Greece to deliver on a plan that is doomed to failure. So pony up asssets. Brilliant. Just as Michael Hudson has been saying all along is the plan and as economic hitman John Perkins has described is neoliberal SOP developed from the Mafia shakedown.

Bundesregierung — Comments on the latest Greek proposals
Posted and translated by Sven Giegold

15 comments:

Jose Guilherme said...

The second alternative suggested by Germany seems to be the best one.

Btw, this short WSJ article is a great, clear and concise explanation of the workings of TARGET2 and the Eurosystem of Central Banks:

http://blogs.wsj.com/briefly/2015/07/10/how-does-the-eurosystem-work-the-short-answer/

NeilW said...

Except that it doesn't very well. Still thinks that reserves are limiting and that recapitalisation is with the member states rather than the ECB itself.

Mostly right can be mostly misleading.

Jose Guilherme said...

But right on target when it says that TARGET2 debts aren't supposed to be "paid back".

With an interest rate of close to zero percent and no principal to be paid the more debt periphery countries have under TARGET2 the better for them.

NeilW said...

TARGET2 liabilities are just accounting balancing items. You get them in any group structure.

Anonymous said...

But, but.... certainly Greece needs more time to hand over public assets and fully compensate Germany for the right to do so.

Kristjan said...

Syriza is Trojan horse.

Jose Guilherme said...

The really new item is the German proposal number 2: a Grexit coordinated with the creditors plus debt restructuring.

Greece should definitely accept a Grexit if it is on these terms.

Dan Lynch said...

Anyone taking bets on whether Tsipras will capitulate to the latest demands?

Greece has battered spouse syndrome. They identify with the abuser. They may complain about the abuse but at the end of the day they refuse to stand up for themselves and leave the relationship.

Ralph Musgrave said...

Dan,

Another name for your “battered spouse” syndrome is the “Stockholm syndrome”. But I don’t think those syndromes are what’s going on here.

A recent survey showed that Greeks actually PREFER austerity plus the Euro to reverting to the Drachma. One possible reason for that is that they know they’re incompetent and dishonest and thus can’t manage the responsibility involved in managing their own currency.

Second, if you’re an irresponsible borrower, you want to get close to rich, sucker, irresponsible lenders. And that’s what the EZ offers Greece: the ability to borrow large amounts and not pay it back.

The irresponsible lenders almost DESERVE to lose everything if they’re that easily fooled.

Dan Lynch said...

Agree with all that, Ralph.

Brian Romanchuk said...

Ralph,

If Greece has 20% unemployment (not sure what the latest stats are), 80% of the work force has a job. Those Greeks are probably the ones who prefer austerity to exit. The other 20%? Well, they can just deal with it. Unfortunately, that 20% will only rise as the economy is locked in a death spiral.

Europeans should study some of their own history. The stability of political systems configured like this is questionable, at best.

Dan Lynch said...

Also @Brian, the pensioners and soon-to-be pensioners would rather be paid in Euros than drachmas. From a selfish point of view, they're probably correct.

Brian Romanchuk said...

Ah yes, good point. Considering that young people are being forced to emigrate, the pensioner bloc is more and more important.

Random said...

Yep, cheap imports and savings rise in real terms due to deflation.

Random said...

"One possible reason for that is that they know they’re incompetent and dishonest and thus can’t manage the responsibility involved in managing their own currency."
I would agree but the Troitka is so incompetent and negligent that the Greeks would be better off with their own currency, even if they don't think so.