Historic Syriza win in Greece

[BrainyMess]

Sorry if there's already a thread...

Could the win of Anti-Austerity coalition be the opening shot in the break-up of the Euro?

Interesting times.

Oh how I do so hope so. Bliss was it in that (non-Golden) dawn to be alive...etc

Unless Syriza adopts EU religion pretty quickly and tells the electorate 'we may have exaggerated quite a bit what we could achieve', the MORE LIKELY outcome for those that have invested so much in the project e.g. Germany, it will be Greece LEAVING.

The problem is that the Greeks overwhelmingly want to stay in the EU.

The problem for the Greeks who were floating government debt around 15% during the Eurozone crisis, is that when they leave the EU, trying to default on their EU debt, is who will fund them and at what interest rates?

The old ones may not be the best, but what does a middle class Grecian need to Urn to re employ those let go from a previously overweigh Public Sector, increase minimum wage etc etc etc - AND pay penal interest rates to those brave enough to invest in the Greek dream?

P.S. The Eurozone's ability last week to inflate their economies via QE was no coincidence, as this also gives them a new monthly financial tool to try and manage any market fallout. IMO.

I'm not surprised that Greece has voted for Syriza, given the really difficult economic circumstances most ordinary Greeks have been living with this past five years. However, the situation is so full of contradictions that I can't see how this will end.

i.e. Syriza says it will 're-negotiate' terms with EU and wants to write off half its debt. Um, okay, although I can't see the EU, the IMF or the ECB agreeing to that. Then there's the other big issue, which is that it also needs the EU to cough up the next tranche of its bail-out money - and how likely are 'the troika' to agree to that when Greece is already defaulting on the money previously owed?

I really feel for the Greek people, but their system of government has been so corrupt for so long that they're all used to getting something for nothing and now that the gravy train has come to a screeching halt they don't know what to do. Syriza is proposing an easy answer, but there isn't one. The obvious choice really is to leave the euro, but most Greeks are against this. So what's the answer?

Why does Greece need to leave the EU. Surely it would be better for them if they left the Euro If Greece returned to the drachma then it would be easier for them to get back to selling lots of cheap holidays which would create jobs.

I feel sorry for the Greek and I think that austerity has been taken too far. It is not acceptable to have people cold and hungry in the EU.

Twenty years ago I went on holiday to Greece. It was a proud country which earnt an honest living. Greece used to be an affordable holiday destination, but the strong Euro has made Greek hoidays too expensive to many British holiday makers.

ReallyTired .... most economists for years would agree with you that due to pooh paper bucket they are in, Greece would be better off OUTSIDE, but it probably means that for 2-5 years at least, things will get WORSE for the people.

And that would have been under the previous more fiscally responsible government, god knows how a country that would have defaulted on its debt will find Euro billions from investors in the current governments country economic model, as laid out in their manifesto.

Prior to the crash, Greece's economy was both unbalanced and used to borrowing at Eurozone interest rates similar to Germanys (and probably below the UKs) - and despite some reforms already made, Syriza does not seem to be run by individuals and an ideology that would get the country back on its feet.

Blimey anyone heard of Pablo Iglesias?

en.wikipedia.org/wiki/File:2014-07-01-Europaparlament_Pablo_Iglesias_Turri%C3%B3n_by_Olaf_Kosinsky_-14_(4).jpg

He's leader of a Spanish left wing party formed in 2014, now gaining parity with Spains two parties and gaining in popularity

en.wikipedia.org/wiki/File:ElectionMonthlyAverageGraphSpain2015.png

The Spanish General election is in December!

The omens don’t look good for Greece, Demis Roussos died yesterday.

“Forever and ever you’llllllllllll beeeee the one, who smiles on me like the morning sun”

^” Take me beyond imagination, you’re my … “ something or other, ending in “constellation”.

They don’t make songs like that any more, or the dresses for men, many thought he was sexy, I just loved the song.

According to Sky, one of his earliest English language appearances was on the Basil Brush programme, but it never held him back. lol

Blimey Demis died yesterday

RIP hairy one

Isitmebut

I agree with your point about Syriza. I am also curious to see how it is going to achieve what it has promised.

But I dispute your assertion that the previous government was "more fiscally responsible".

They repeatedly lied about the defaulters on the Lagarde list, quietly letting it slip into obscurity; they refused to do anything about chasing after tax evasion by the rich; such cases were very much on the back burner.

They put such a massive hike on heating oil fuel that they ended up decreasing relevant revenue, as people were simply unable to pay and just did not heat their homes - there is a limit to how much money the ordinary person has got, after all. The same thing happened when they changed the rules on vehicle tax - many people were simple forced to give up their cars.

They did very little to combat endemic tax evasion in the tourist industry on lucrative islands like Mykonos.

Their ENFIA tax has also caused many people to end up homeless.

I do not consider this "fiscally responsible".

This pretty much sums up my worries for Greece:

www.telegraph.co.uk/news/worldnews/europe/greece/11370619/Hold-the-celebrations-Greece-is-still-doomed.html

Alexpolistigers ….. re your ”But I dispute your assertion that the previous government was "more fiscally responsible" and examples you gave.

I see your point, as I was looking for a collective term for numerous economic problems and probably should have just used ‘responsible’, and even that would have bee on a relative basis to Syriza, with their core political ideology based on their roots i.e. Communists and Greens.

Reading the papers of a Greece prior to the Great Financial/Economic Recession, the country was described loosely as a State with an overly large and inefficient government/public sector, a business/private sector held back by too much regulation and red tape and many annual taxes due were not collected, not just by the rich.

From what you say, tax collection is still a problem, but not so widespread.

I understand that in an economy where the gap between the tax take and expenditure was in percentage terms huge, the government wage bill has decreased by a third.

But the business/private sector supporting the State has been greatly reduced, with several thousand businesses alone years ago, having moved to Bulgaria, which may have been to avoid wealth grabs, but the annual cost of BEING in business I believe is cheaper there.

So in a Greek period of EU/ECB/IMF targeted austerity, where apparently if Greece now takes away it’s annual debt repayment bill it would go into a SURPLUS, once tax collection was seen as responsible governance, but the business/private sector was either tapped out or in another State, who else is ever left to be taxed if not ‘the people’???

Contd.

So with just under 11 million people and Greek economy I believe to be close to 25% SMALLER in GDP/output terms than prior to the crash, we have now a Syriza Party, with communist and other far left roots;

• Calling the EU with sustainable economies (relative to Greece), ‘neo-liberal’ and those controlling their purse strings, Nazis.

• Calling to rehire State workers which no doubt will include, sinecures, apparatchiks and god knows what.

• Calling to reverse many of the (always unpopular) cost saving measures the last administration put in place.

• Calling on the ‘creation’ of jobs yet don’t understand that there is no god given right for private sector jobs to exist – and if businesses were not scared shitless prior to this week, they will be now.

Even if Syriza only implements half of what they say, the Greek economy will become less balanced, and unable to support itself, IN or OUT of the EU.

The problem with ‘austerity’ is that if the STATE is dramatically cutting spending, the government has to ensure that the business/private sector is both encouraged and confident enough to INVEST=JOBS=TAX RECEIPTS, as if they don’t, penal taxation of the people is the ONLY way to reduce government deficit spending, if any government is serious about it.

For governments outwardly calling the likes of Germany ‘neo-liberals’, or policy wise just talk of ways to increase the size of the State, yet control, pressure and tax businesses, the outlook can never end well for the people’s pockets – as apart from local shops etc, when seeing obvious political risk ON TOP of economic risks - there is always a ‘Bulgaria’ to relocate medium to large businesses, jobs, & tax receipts to.

How much does a Grecian need to Urn

I dunno, but I 'cracked' your one yesterday. lol

"The old ones may not be the best, but what does a middle class Grecian need to Urn....."

But I have a feeling it could be the joke that keeps on giving.

Maybe they should do an Icelandic revolution?

Yeah, they should wake up the Spartans find a pass and have a go.

Unfortunately for Greece, unlike pre financial crash Iceland, they do not have a budget SURPLUS and little national debt.

It is one think saying 'screw you debtors' when in surplus, but when in deficit and still need international investors to buy your government debt at all, never mind at anything like serviceable interest rates - options are limited.

Without having to pay back the debt and interest on debt the Greek Govt would have a primary budget surplus. That is more tax coming in than payments going out..

The Greek Govt can be self sufficient without the debts it owes. Default is an obvious choice in that situation. Problem is that allowing Greece to default and stay in the Euro and the EU will give Italy, Portugal and Spain that 'best of all worlds' option as well and a mass EU default would swallow the entire global banking system - Financial Crisis II would follow.

The EU has not got a lot of choice though. It either agrees to some sort of fudged Greek debt restructuring and an eventual write off or the break up of the Eurozone and long term break up of the EU.

A single currency for such a massively diverse economy as the EU is simply impossible to achieve. In the UK we actually need a different currency and zero interest rates for Scotland/North and another currency and higher interest rates for the South East/London.

Totally different economies need different currencies and interest rates.

You are arguing why Greece should never have joined the EU in the first place.

They did, the fact the size of their debt service costs are so large to the size of their overall economy, cuts little 'surplus' ice with those they owe money to.

The days of Greece defaulting and killing the Eurozone (via the banking system) is gone, and they no longer have the leverage to threaten it.

A deal is the only option to stay in, but will Syriza save face?

www.independent.co.uk/news/world/europe/9-reasons-greeces-experiment-with-the-radical-left-is-doomed-to-failure-10008608.html

Tomorrow morning Greece can just say it is not paying interest or any of the money it owes.

No one can stop them. No one will kick then out of the Euro. No one will kick them out of the EU. No one is going to invade Greece and demand their money back. Well lets hope not.

There is leverage. Russia and China are very interested in Greece. the Eastern Mediterranean is a very politically sensitive place on the planet. the US will tell the IMF to step in if the EU abandons them.

Gas pipelines run through that area and the US has tanks and troops in E Europe and Russia does too - that is the key to all of this.

"There is leverage. Russia and China are very interested in Greece."

What kind of leverage is that? Their economy is in the toilet. They are unable and unwilling to address the real problems like poor tax collection, unnecessarily huge public workforce, inefficiency, and early retirement. Nobody will lend them money for at least the next decade, and you can forget about investments, too. But no worries, Russia and China are interested in Greece?

"No one will kick then out of the Euro. No one will kick them out of the EU"

Don't be so sure. EU is massively helping Greece at the moment, and that ton of money is coming out of EU taxpayers who have by now had it with its shenanigans. If Greece now tells EU to fuck off after two rounds of voluntary debt reductions, extensions of debt maturity, and massive financial aid, I would estimate the chances of Greece being kicked out of the Eurozone at the very least and possibly also the EU to be substantial.

The first visitor to the new Greek Prime Minister after his inauguration this week was the Russian ambassador.

Control of alternative gas pipeline transit routes across the Adriatic will close off any possibility of circumventing Russia's control of gas supply out of the Caspian into Southern and Western Europe. The trans Adriatic route is an absolutely crucial future supply route which will stop Russia controlling gas supply to Europe. Russia invasion of Crimea is about control of gas transit routes.

Its all about strategic control of gas supply to allow the formation of a gas OPEC that Russia will be a dominant if not the largest player in.

Of more immediate interest is that Greece and other financially weak EU countries may be willing to vote against fresh sanctions on Russia over Ukraine in return for financial assistance and/or access to cheap supplies of cheap gas from Russia. Syriza has promised Greek citizens free or at least cheaper energy. Only one place that can come from.

Greece has to be kept in the fold by the EU to stop Russia peeling it off.

China meanwhile wants to buy the port of Piraeus which Syriza are proposing to sell.

This is all about geopolitics and the US is very very interested in making sure the EU does the right thing and keeps Greece in the EU and away from Russia/China influence. That is why the IMF are always 'in the room' during the negotiations over Greek debt.

Any medium term strategic cards Greece holds, re a Europe trying to ween itself off Russian energy, who is being forced to sell its wares to China, is just that.

Greece defaulting on its debt next week, running a honking great annual budget deficit, if reversing all recent budget cut reforms, will not be able to pay current public sector salaries soon after, never mind those they reinstate.

Greece has I think around several billion Euros of a loan maturing this year, time is not on its side.

Anti American motives for a Russian supplied economies, rarely end well for those economies, think Cuba.

And Russia's own debt has just been downgraded to junk status, as its economy is tanking and the people starting to protest, so hardly in any position to offer 'free' anything to anyone else.

Greece would have a chance outside the EU with the last government, but with the new and similar economic views of Castro, they would be buggered.

MoreBeta - You seem to be saying Greece can tell her husband (EU) "Buy me this diamond necklace, then that bracelet, then whatever else I want, or I'll go sleep with the neighbor (Russia)". And that after lying about being a virgin before marriage. I don't see that strategy working any better than it would for the proverbial marriage between a husband who has just had enough of his dishonest and lazy wife. She has maxed out multiple credit cards, sulks when told to save and pay back her debt, and now on top of it all she is threatening to whore around town if her demands are not met. Well, that should go swimmingly