Greece

Lenders to Greece: Show Us You Mean It

Tsipras needs to actually pass legislation, not just propose reforms.

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Greek Prime Minister Alexis Tsipras
Wikipedia

The proposed reforms delivered by Greece's new finance minister to negotiators from the International Monetary Fund (IMF), European Central Bank (ECB), and Eurozone leaders on Thursday was an almost total caving in of the country's position—or so it was widely reported.

Indeed, the new proposal looks strikingly like the terms Greek voters rejected at Prime Minister Alexis Tsipras' urging in a dramatic referendum last Sunday. It includes tax hikes, a pension overhaul, the privatization of state assets, and efforts to combat corruption—all things that Germany and the rest of Greece's creditors, which hold some 300 billion euros of the nation's debt, had been asking for before they would offer further financial assistance.

So in that sense, the last few days' reporting was correct—the Greek prime minister is offering to give the international community almost everything it wants in exchange for another bailout worth somewhere between 53.5 billion and 80 billion euros.

But an open question was whether the Greek government could be counted on to actually implement the changes it's promising to make. Does Greece have the political will to put its pledges into action?

"My biggest concern is whether all these plans will actually be carried out, as some of them (such as privatization) go against the ideology of Syriza," says Scott Sumner, director of the Program on Monetary Policy at the Mercatus Center, referring to Tsipras' far-left Syriza Party, which came to power in January.

The fear is understandable.

After all, Tsipras said more than four months ago that Greece would present lenders with an acceptable list of reforms. That never happened. The prime minister's decision to ignore an IMF deadline (thus allowing his country to become the first developed nation to default on a payment to that instutition), call a shock referendum, and encourage the Greek people to vote down the lenders' demands did not help to instill trust in the people he needs to get on board with his new proposal.

Speaking to the press, German Chanellor Angela Merkel earlier today said coming to an agreement to unlock another bailout (and keep Greece in the currency union) would be "extremely difficult." According to CNBC, she added that the "most important currency with Greece has vanished, which is trust."

"The issue of credibility and trust was discussed," echoed Eurogroup leader Jeroen Dijsselbloem, commenting on yesterday's meetings.

But the organizations seem to have come up with a solution to the challenge of not fully believing that Tsipras and the Greek people will stand for all the changes they're promising to make: force them to pass laws implementing the reforms right away.

The Greek Reporter outlined the Eurogroup's demands as follows:

Eurozone finance ministers decided that Greece must legislate a series of reforms within the next few days in order to continue negotiations for a third bailout package the country has requested from the European Stability Mechanism.

According to comments by top European officials after the end of the Eurogroup meeting, Greece must show willingness to reform and gain the trust of its partners that has been damaged in the past five months.

The measures and reforms should be implemented in two waves…

Tsipras has until Wednesday to get it done, according to Reuters. "For us the most important thing is that…this whole package has to be approved by both the Greek government and the Greek parliament," said Finnish Finance Minister Alexander Stubb, "and then we'll have a look."

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  1. Tsipras is a politician. You can just assume everything he says is designed to increase his power and that of his cronies.

  2. But the organizations seem to have come up with a solution to the challenge of not fully believing that Tsipras and the Greek people will stand for all the changes they’re promising to make: force them to pass laws implementing the reforms right away.

    No, they came up with the only sort of solution these kinds of people understand. More bureaucracy and laws. It boggles the mind that these other nations who have no respect for free markets are lecturing Greece on the need to develop a free market.

    The reality is – the free market already exists in Greece. It’s just off the books, and will stay there until there is a cultural change in which economic protectionism and regulations are done away with. That won’t happen because SYRIZA passes a few new laws that will be ignored.

    I’m sure Greece has all kinds of anti-corruption laws that get violated daily.

    1. The Mediterranean world is less hypocritical – more pragmatic? – when it comes to corruption. Maybe because they have an ‘ancient world’ memory bank and have been at this civilization thing a little longer.

      Greece is like France and Italy (ie large black market economies and low tax payments) when it comes to how corruption is dealt with; which is completely alien to a Northern mindset. It may look as ‘bad’ but in reality, it’s what keeps them going. And let us not fool ourselves into thinking there isn’t corruption up North. As one Armenian businessman once told me years ago, ‘Britain does corruption better than any country on earth’.

      1. That’s well and good, but besides the point I was making. The Greek government cannot sustain itself. The only thing allowing them to continue the culture of free shit is the bailout money stolen from the taxpayers of other countries.

        Simply put – if Greece were cut off, the Greeks would have no choice but to implement austerity. They have had 7 years to implement the recommended reforms, and haven’t done it. On the contrary, they drifted further to the left. Now far left SYRIZA is going to be the one to implement free market reforms?

        It’s absurd. European politicians are paying for their legacies with hundreds of billions of their tax payers money.

        1. Yeah.

        2. Most of the previous bailout money did NOT go to the Greek government. Zerohedge did a very good pie chart showing where stuff went – http://www.zerohedge.com/news/…..-situation

          34.6 billion went to German/French bankers to RAISE the price of Greek bonds bought from them by their govts
          81.3 billion went to German/French bankers (from German/French taxpayers) on debt maturity to keep the extend/pretend game going
          48.2 billion went to Greek banks to recapitalize
          40.6 billion went to pay interest on previously issued bonds
          27 billion went to the Greek government to pay deficits

          Reality is Greece was bankrupt 7 years ago. The first two items are pure crony payments that have really nothing to do with Greece – bailing out bankers – enabled by people choosing to avoid facing reality and by politicians seeking to divert money to bankers who threaten them if they don’t. Those bankers made a fortune by buying higher-interest Greek-euro bonds (and directly enabled the previous Greek government borrowing by lowering the cost) – and when the ‘risk’ side of that lending popped up, they sold the bonds at full price to their own governments.

          The last 3 are the direct costs of avoiding saying ‘Greece is bankrupt’ 7 years ago.

      2. The Mediterranean world is less hypocritical – more pragmatic? – when it comes to corruption.

        The Mediterranean world also has become less wealthy and less relevant over the centuries.

        Perhaps a the kind of libertarian-light world you imagine that consists of a free underground economy with a huge and corrupt government monkey on one’s back just doesn’t work so well?

    2. No, they came up with the only sort of solution these kinds of people understand. More bureaucracy and laws.

      I suspect it will always be such. I think once you go down the “free shit” path, there is no way to fix it short of allowing it to crash and burn and then start over. The whole, ya gotta hit rock bottom to realize you’ve got a problem thing.

      When Greeks are starving in the streets, they might come around. OR they go the other way to full up communism, guaranteeing even more suffering. But either way, it can’t be fixed by the current system. It’s too far gone.

      1. But this is exactly what Krugman said the Greeks should do!! I mean how can those nasty Germans think it’s fair to make Greece pay for the first bailout? I mean c’mon! Krugman thinks austerity will send the whole EU through the woodchipper!!! Dear Imaginary Friend! The humanity!!

        or not.

        1. I like the handle, loved the post. I haven’t seen anybody else awarded the internet today, so Ima give it to you.
          Congratulations. I think your prize is your choice of either pot, or Mexican ass-sex.
          Chose wisely.

      2. Let’s get real here –this is a culture where freeloading is fully ingrained and anyone with an ounce of common sense could have seen this coming a mile away. Prior to joining the EU, the Greeks built up a ton of debt providing relatively plush retirements to a government bureaucrat class, all the while turning tax evasion into a national pastime.

        So what do those idiots in the EU do? Take on all the Greek debt and expand their freeloading to continental levels, with Germany and other productive countries providing loan after loan with no real consequence, other than to keep the gravy train running. So why should the Greeks take the EU seriously when they say, “This time, we mean it!!” They’ve been enabling this behavior for years now and deserve where they’re at.

        The EU can’t let Greece go because it will mean their stupid continental experiment wasn’t a one-size-fits-everyone solution. The Greeks can’t leave and restore their sovereignty because there won’t be any money to enable the freeloading to continue. So we have this awesome game of chicken taking place in the hopes someone finally blinks.

  3. What happens if Russia befriends Greece? I can assume the Greeks and Russians have had some contact or even had some dialogue during this time?

    1. What the hell does Russia actually gain by pumping money into Greece endlessly to prop up their artificial lifestyles?

      I’m tired of talk about how strategically located Greece is. We aren’t going to war with Russia, and they aren’t a serious threat even if they were interested in massive aggression. Allying with Greece doesn’t just the calculus in any serious way. Armchair generals love to sit on the sidelines and pontificate as if they are looking over a Risk game board.

      1. I’m a high chair general and haven’t played Risk in over 20 years.

        It’s a legit question. What if Greece said fuck it let’s go over to Russia to get some cash?

        Not talking about what it means beyond that.

        1. Then Greece would get another temporary bailout, but would be in the same boat they are in now only with an angry Russian creditor instead of pansy ass Eurocrats.

          What Greece wants is to have their economic endlessly propped up with free money. Russia isn’t going to give them that. Greece isn’t worth it.

        2. Greece, even under the so called ‘austerity’, requires about a billion a month. Putin doesn’t have that kind of cash to throw around just to fuck with the Euros and the US. Oil is in the high $50 per barrel. He’s got money, but he’s not spending it to on greek pensions.

          1. Perhaps but the idea of it happening was predicated on the fact the two countries have a shared common culture and religion that can be argued to be closer than with the West. In any event, it was just thinking out loud as a point of interest given the role of Byzantium on Russia.

            1. Well Tsipras has met with Putin a few times this year, but I think it’s a strategic show on his part and a bit of eye-pokery for Putin.

              1. Yeah, I think Putin did it to piss off the EU, and Tsipras did it to scare the EU into bribing Greece with new money to keep them in the western fold, but it wasn’t (or at least isn’t now) something seriously considered. What does Russia gain from having another financially dependent client state? They get trade privileges with their other client states; does anyone think Greece will throw away everything they import from the rest of the EU for Russian goods? Trade in their Nikes for some Russian shoes? I don’t think so.

                1. Fun fact. Nikes is Greek for victory, and was, according to tradition, shouted by Adidas when he ran to Athens(?) to announce the Greek victory in the Battle of the Bay of Marathon.

                  1. Oops, Pheidippides was the runner. I don’t know why I thought Adidas had anything to do with it.
                    Still, fun fact.

            2. Eh, their culture is vastly different, and the religion, while theoretically similar, is more of a ‘equals’ thing than ‘solidarity.’ Patriarch of Moscow is considered (by Russians) to be equal to any of the Big Four (Constantinople, Antioch, Alexandria, Jerusalem), so, while there’s sympathy, it’s on the order of Swedish Protestants looking kindly on German Protestants.
              If Putin didn’t go arse-deep into Ukraine and wasted his resources, he could have tried achieving the famous warm port objective for Russia by leasing some real estate when the Greeks need it, but too late now. China might squeeze them, the way they are doing in Africa, and it would be a good object lesson in being stupid if they go for it. But most likely is, they get bailout, everything goes on as before, and everyone starts praying for economy to recover so that debt-fuelled locomotive can start pulling the EU train again.

        3. “What if Greece said fuck it let’s go over to Russia to get some cash?”

          Pretty sure Russia isn’t currently in the bizz of handing out dough:
          “WTI Crude Oil – $52.74”
          http://www.oil-price.net/

        4. What if Greece said fuck it let’s go over to Russia to get some cash?

          I would laugh. A lot.
          I don’t think the Russians are likely to be any nicer than the Germans when Greece fails to repay it’s debts.

      2. What the hell does Russia actually gain by pumping money into Greece endlessly to prop up their artificial lifestyles?

        Same thing they got doing this sort of thing when they were the Soviet Union, same sort of thing we get when we do it – ‘friends’, for as long as the money keeps coming in.

        Russia gets a ‘friend’ inside the EU to help it look bigger and tougher on the world stage and act as a puppet to counter/control American/EU influence in the world.

        What do the *Russians* get? A bigger tax bill.

        1. Well at least they got a half century out of Cuba…

          1. And Cuba got Russian shoes out of it!! As Tony Montana loves to remind us.

      3. Russia would be better off pumping money into Australia, Papua New Guinea and Indonesia. because it’s a quick, easy two armies per turn. Doesn’t sound like much, but it adds up.

    2. The Greeks would be better off selling their ports and ships to the Chinese.

    3. Let’s remind everyone that Greece and Russia share a common church, which carries large weight when societies turn fascist.

  4. At this point it’s pretty clear the bailout is coming. The EU is just trying to appease the German parliament and voters so they have symbolic reason to say “this time is different”.

    1. While the Greeks get what they want in terms of having stood up to the EU’s ‘bullying’ as they perceive it.

      1. I might add, there’s definitely been a lot of posturing. But I think in terms of ‘perception’ on how other countries may view this, I think Greece loses. When countries like Estonia and Portugal tell you to knock it off, you know you may be a tad stubborn.

        Then again, I just watched Paul Craig Roberts and read an article at Brookings taking entirely different perspectives on this.

        To us, I guess, it’s a simple case of one country living beyond its means refusing to adjust in order to cover debts. There’s been quite a difference of opinions for sure.

        1. Estonia actually did real austerity, so they have the moral high ground.

    2. Maybe. But there are also fundamental limits to what Estonia, Latvia, Lithuania, and Slovakia — four Eurozone members both poorer and less profligate than Greece — can accept.

    3. The Germans are still in deep delusion. They want a currency that is as strong as the Dmark (for good historic reasons) – and they want a mercantilist trade surplus (for bad historic reasons and a deep reluctance to ever allow their own economy to freely restructure). Mathematically, you can’t have both. The euro gave them the appearance of both for awhile – but all it did was force debt (rather than currency devaluation) into the deficit euro countries. And that has now run out.

      1. The real economic solution is for Germany to leave the euro. Not for them to force Greece – then Portugal – then Spain – then Italy into financial crisis and then exit. It can get its mark back and stop forcing debt on others instead of currency devaluation. Euro-denominated debts inside Germany will gradually devalue. Some other countries like Netherlands and Finland will join the nordeuro. And France can finally decide whether it wants to lead a declining euro Europe or be permanently cuckolded by Germany.

        1. I don’t know the economics behind this as well as I should, but if Germany leaves the euro doesn’t it essentially collapse? I mean, Germany’s been propping the euro up pretty much since its inception. Part of the desire, as I understand it, to bring the UK into the euro is to take some of the weight off Germany’s shoulders.

          1. It depreciates but it doesn’t collapse. Right now the euro’s strength (relative to other currencies) is there to satisfy Germany’s psychological need for a strong currency and the long-held habits that they’ve built up that assume a strong currency (cash savings, bond investing, low homeownership, low equity ownership). The med countries have always had the opposite needs/habits (some assumptions of inflation/devaluation, high homeownership, high equity ownership).

            The euro has proven once again that you can’t mix the two in a single fixed centrally-planned currency. Unfortunately few things are more persistent than the delusion that you can have a single global standard currency that covers all functions of money in all markets and between all markets at all times and with no adjustment possible.

            1. The euro has proven once again that you can’t mix the two in a single fixed centrally-planned currency. Unfortunately few things are more persistent than the delusion that you can have a single global standard currency that covers all functions of money in all markets and between all markets at all times and with no adjustment possible.

              The problem isn’t with the “single global standard currency”, it’s with governments trying to manipulate a single currency for disparate political purposes.

              1. No. The problem is EXACTLY with the single global standard currency. The need to manipulate is an inherent part of that. It really doesn’t matter one whit whether it is governments that are doing the manipulating – or whether it is JP Morgan creating financial crises in order to cartelize the economy.

                The need to manipulate occurs BECAUSE the single global standard currency creates balance sheet risks. The only way to reduce those risks is to use money to manipulate the economy itself.

                1. Except for the word “currency”, what you said was complete gibberish.

                  Fry: Hey I’m starting to get the hang of this game! The blerns are loaded, the count’s three blerns and two anti-blerns and the infield blern rule is in effect, right?

                  Leela: Except for the word “blern” that was complete gibberish.

  5. What happens when we run out of ways to mock Greece?
    What’s Albania been up to lately?

    1. Receiving a candidate status for accession to EU, if you can believe it. Utter madness, but EUrocrats won’t stop until they have destroyed EU.

      1. Yikes! Now I won’t be able to sleep tonight. Thanks a lot, Pan Zagloba!

        1. Any time you want heart-warming nightmares from the Balkans, let me know and I’ll find some for you 😀

  6. “the Greek prime minister is offering to give the international community almost everything it wants”

    And there I was touting the political brilliance of using the referendum as cover for Syriza’s acceptance of failure.

    Instead, Tsipras seems to be trying to have his Baklava and eat it too: be an icon of stubborn, Left-Wing purity to his people, and still sell himself as a credible economic reformer to the EU.

    I take back everything i said. He’s idiotically painted himself into a corner.

    You’d think if his mandate was to get a ‘doable’ deal, he would have had a far better opportunity back before he’d engaged in the political street theatrics.

    1. I don’t think he expected the “No” vote to win. He stated if “Yes” won he would resign and I think that was what he was hoping for. Then he could maintain his hard-left image and say that the people got what they voted for. The IMF payment default was a real wake up call for him and that’s when he realized he was gonna lose. His escape pod failed to launch and now he’s stuck.

      1. “I don’t think he expected the “No” vote to win. He stated if “Yes” won he would resign and I think that was what he was hoping for.”

        mmm. Maybe. My basic understanding how politicians work however suggests they don’t generally look for ways to give up power. He can always quit.

        I think he was looking for a ways to *gain* power with the ECB/IMF, by showing them that Greek public simply wouldn’t accept too-much futher faux-austerity, and that they needed to “help him help them” (to borrow from Jerry McGuire).

        Instead they yawned and said, “do the deal or don’t”. And he’s capitulating. Which, as the piece notes, is exactly what people voted against. Which therefore Tsipras doesn’t have the political mandate for….and can’t be trusted to deliver.

        1. Possibly. You’re right about politicians and power but I think he was hoping to play a longer game for power. I don’t see any way for Greece to avoid dropping out of the Euro eventually. They aren’t going to find a long-term solution that works for both parties. Too many EU members suffered through tough austerity themselves and came out better for it. They aren’t going to give Greece a pass. Once the Grexit happens, Tsipras would have been in a pretty strong position (internally to Greece) to take up the reigns.

          He was talking plenty about a No vote strengthening his hand but I can’t imagine he believed it would. If 61% of the people in Detroit voted that they wanted more free money from the US government they’d get the same response (I hope).

          I think the Euro leaders agree (mostly) that Greece can’t be trusted to deliver reforms and the Greeks are just trying to get one last bag of cash. Even if they manage to pass the laws implementing the reforms by the 15th I’m highly skeptical they will last. I’d expect any future bailout will come in the form of small periodic infusions contingent on the reforms being enacted and verifiably in effect.

      2. His escape pod failed to launch and now he’s stuck.

        These guys feel Tsipras’s pain…

      3. He is certainly acting as though the ‘Yes’ vote won. I wonder how everyone in Greece feels about him agreeing to most of the EU conditions on another bailout. Has to be a big WTF moment for a lot of them.

        Should we consider the simplest explanation: that this isn’t strategic at all, but rather Tsipras merely suffers from multiple personality disorder?

  7. Because once something is passed into law, the government is bound to adhere to it, like the US Constitution.

  8. Greece to lenders: Oh you were serious about tha?

  9. If you’re going to default and exit the Euro anyway, you might as well take the money first.

  10. What happens if the Greek government just starts printing Euros?

    1. Like North Korea prints dollars, on the DL?

      yeah, uh, no. that’s the whole problem of a currency union with zero fiscal union.

    2. Zaytsev|7.12.15 @ 1:51PM|#
      “What happens if the Greek government just starts printing Euros?”

      BAD juju!

    3. Their press puts “Y” on the Euro. All “Y” Euros will no longer be accepted.

  11. “My biggest concern is whether all these plans will actually be carried out…”
    .
    Welcome to Planet Earth, enjoy your stay.

  12. “Indeed, the new proposal looks strikingly like the terms Greek voters rejected at Prime Minister Alexis Tsipras’ urging in a dramatic referendum last Sunday.”

    “If voting changed anything, they’d make it illegal.”
    Emma Goldman

  13. Please, please, please bail Greece out. They said they will pay it back, and they really mean it this time.

  14. As only the New York Times could put it: Greece Financial Crisis Hits Poorest and Hungriest the Hardest

    1. God, I thought you were kidding.

      I would have thought they’d have replaced most of their writers with autotext generators at this point.

      The idiocy of that kind of pathetic appeal is that a “financial crisis” by definition hits the actual financial institutions the hardest. The poor were already poor.

      As they say in finance, “you don’t break your neck falling out the basement window”

      Its the assets that get wiped out which destroy economic liquidity, the businesses that shut down, and the reduced opportunity for the actual productive people in the society. Which is why they leave ASAP and go somewhere things are less fucked up.

      1. The poor were already poor.

        And the poor were already poor because the Greek government didn’t do its job and the country was massively corrupt.

        They were already poor despite many billions in loans and gifts from Europe.

  15. Krugman is about to spit his keyboard into a short circuit:
    “Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.
    Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.”

    Shame on those lenders for wanting collateral from a deadbeat!
    What does this guy do for a living?

    1. When your decisions with money are so poor that you’re in hock to anyone, you don’t get to whine about your creditors not giving you more choices.

    2. The ‘national sovereignty’ quip was too precious. As though right to other country’s taxpayers’ money is intertwined with self determination. Right or wrong, the EU is not violating Greece’s autonomy no matter what they do here. Krugman is out of his mind.

      Also, the irony seems entirely lost on him that he, a staunch supporter of undemocratically centralizing authority in Europe behind the unelected bureaucrats of the EU, is complaining about loss of national sovereignty. I can only assume he doesn’t actually know what national sovereignty means.

      1. MarkLastname|7.12.15 @ 10:58PM|#
        “The ‘national sovereignty’ quip was too precious. As though right to other country’s taxpayers’ money is intertwined with self determination.”

        I think we have a ‘red-herring-a-nado’ going on; anything to avoid the issue that Greece is a deadbeat.

  16. Oh, and the lefties have started a twitter thing; #thisisacoup. And it’s trending and Merkel had better watch out and stuff!

    1. Someone should immediately counter with #thisisaderp

    2. The only coup here is Tsipras overthrowing himself, or at least his other, anti-austerity, personality. Everyone else is just a confused bystander at this point.

  17. Bewildered Greeks left wondering what happened to referendum ‘No’ vote

    The answer is that Tsipras’ bluff was called, and all the Greek votes in the world won’t force some other country to empty its pockets into Greece’s lap.

    1. From the link:

      “Less than a week after they triumphantly gave international creditors a bloody nose by rejecting a harsh austerity plan,”

      Uh, no.
      Voting to demand loans without safeguards isn’t ‘giving the creditors a bloody nose’. As the adolescents are discovering, it really was nothing other than a tantrum.

    2. My favorite was the 23 year old therapy student who said they made a “mature” decision to reject austerity with the no vote, and now none of this makes any sense.

      I feel like I’m in the twilight zone reading this stuff. The mature decision was to vote to spend more of other people’s money on yourselves. Austerity is a choice when you are a beggar looking for handouts.

      I’m just going to start calling it Krugmanomics. And the funniest part was seeing Greek voters quote Krugman as an authority.

    3. The answer is that Tsipras’ bluff was called, and all the Greek votes in the world won’t force some other country to empty its pockets into Greece’s lap.

      Except, of course, that emptying their pockets into Greece’s lap is exactly what Europe is preparing to do again.

      A “rejection of austerity [measures]” would have meant an exit from the Euro and no more loans.

  18. It’s a measure of the Euros in general that they are deciding the financial fate of X million people during an all-nighter.
    There are people capable of making informed decisions during sleep deprivation, but not many. Any ‘agreement’ that comes out of this sleep-over ought to be rejected out of hand by those with enough sense to schedule their meetings.
    This smells of O-care.

  19. (thus allowing his country to become the first developed nation to default on a payment to that instutition), call a shock referendum, and encourage the Greek people to vote down the lenders’ demands did not help to instill trust in the people he needs to get on board with his new proposal.

    here is your problem: You are expecting Tsipras to do what is good for Greece.
    But, Tsipras is going to do what is good for Tsipras.
    So, you’re gonna get a (Greek) drama, where Tsipras postures for political points, then betrays the idiots who believed he could give them stuff for free, and pisses down the Greek voter’s neck while telling them that it’s raining. And you know what? He’ll get reelected.

    1. Of course he will…because he’s very talented at convincing voters that all of the problems they and their government created for themselves are not their fault.

      1. And anybody with a brain should learn from this. I grew up in the 80’s, and nuclear annihilation was a very real threat, and the evil of the USSR was very real and obvious.
        This might be good for an object lesson in basic economics. But why is such a lesson even needed?
        That’s what gets me, this shit has been shown, over and over and over, to not work, and to empower the rise of totalitarianism. It’s like, if the childhood myth was true and if you chant” bloody Mary”, then the ghost of bloody Mary will show up: If you it did once, and all these absolutely horrible things happened, then why, in the name of all that’s Right and Good in the world, would you try it again?!?

  20. Tsipra is the Greek Obama…promise everything, deliver nothing, blame other people for it.

    At some point Europe just has to accept that Greece is the houseguest who’s trying not to get evicted from your couch. He doesn’t want to leave, because he’s got no other options, but he’s not desperate enough yet to actually do anything to change the situation. At some point, you just say enough’s enough and kick him out on the street.

    1. Very apt, but the Greeks are actually hoping you’ll give them a cushy government job.

  21. The five year Euro vacation mentioned would seem to make sense. I read where it’s figured that Greece is 30% to 40% to expensive to operate inside the Euro so they should exit, adopt the Drachma (or something else) and get on with it. This would also allow them to renegotiate their debt that by all accounts will never be paid back. Seems reasonable and why is keeping Greece in the the EU so needed?

    1. “…why is keeping Greece in the the EU so needed?”

      The markets say it isn’t. Pretty sure it’s a bargaining chip that Tsipras hoped was enough to give him leverage, along with that tantrum disguised as a ‘vote’ for something or other last week.
      Instead, he’s found he has nothing other than the sympathy of some other lefties among the Eurocrats. Dunno if that’s enough to give him a deal he’s willing to tolerate and see B.W.C. at 10PM above; not sure he won’t be hung in effigy on his return,

    2. I don’t think membership to the eurozone is necessary at all. They should have left by now in fact, for everyone’s sake. Someone mentioned the issue of tourism; that fewer tourists would visit Greece if they knew they had to change currencies, which I don’t really think is that big of a deal. It’s a minor chore, which can be done at ATMs with a credit or debit card these days, so I don’t think that would have too bug an effect on many people’s choice of vacation. I think it’s more about politics than logic. Some people (including many eurocrats I think) fear that even the slightest movement away from economic and political centralization will lead to Europe degenerating into 19th century style constant warfare over small plots of land like Schleswig-Holstein or something. And of course, currency independence of member states greatly hampers the prospect of future eurocrats being able to test their noble dream of a centrally planned economy on an unprecedented scale.

      1. “Someone mentioned the issue of tourism; that fewer tourists would visit Greece if they knew they had to change currencies, which I don’t really think is that big of a deal. It’s a minor chore, which can be done at ATMs with a credit or debit card these days, so I don’t think that would have too bug an effect on many people’s choice of vacation”

        It’s not that currency change is a big deal, but if you are paying $2 for coffee today and $8 for coffee tomorrow, that becomes a big deal.
        You go on vacation to avoid concerns, not deal with them.
        ‘Gee, honey, should we go to this place that might be a bit more expensive, or should we go to the place where our credit cards might be worthless?’
        Pretty sure I know the answer to that.

      2. Currency exchange is not a burden for regular people – or for most governments for that matter. It is a risk for bank balance sheets. It is bankers who drive that ‘one global currency’ stuff. And they will always ally themselves with whatever political force is most inclined to help them reduce that risk on their own balance sheet. They don’t give a rip whether that political force is imperial or socialist or technocratic or whatever – as long as it too dreams big global dreams.

  22. Even if Greece implements all the agreed upon reforms, it is highly unlikely that the Greek economy will become solvent in the foreseeable future. This agreement is all about keeping Greece from defaulting on the over 300 billion they owe. Why is that so important? Because Greece is not the only teetering economy in the EU. Italy, the Union’s third largest economy isn’t much better off than Greece. If Greece were to exit and default it would set an ugly precedent for the rest of the economically ailing members. Ultimately, the EU will need to face the inherent difficulties of marrying disparate economies under a single currency. The current arrangement is not workable for the long term.

  23. But the organizations seem to have come up with a solution to the challenge of not fully believing that Tsipras and the Greek people will stand for all the changes they’re promising to make: force them to pass laws implementing the reforms right away.

    So they pass the laws on Wednesday, they get the money on Thursday, and…they repeal the laws on Friday.

  24. The problem is that, even if Greece never pays back it’s debts, without the economic reforms, Greece will just need another bailout in a few years.
    They aren’t running a primary budget surplus. If they were, they could just walk away from their debt. The fact that they are begging for more money indicates that they don’t have a primary budget surplus.
    And unless they make some reforms, they are never going to have a primary budget surplus.
    So, even if Europe writes off all of Greece’s debt, they still have good reason to demand reform, purely so that any *future* lending has a chance of being paid back. otherwise, they are just admitting that they’re going to subsidize Greece’s government in perpetuity.

  25. they have learned well from barry-tell them what they want to hear and do the opposite

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