Exit Polls Suggest Syriza Has Won Greek Election

[Colon™]

Ok, one more post:


source: tradingeconomics.com

source: tradingeconomics.com

source: tradingeconomics.com

No, the renewed growth didn't yet make up for the prior contraction and yes, it would have taken time before lost ground would be recovered (though history has shown recoveries can be very fast), but the Greek economy was on the mend and this time on solid ground instead of on piles of loans. And then the Greek said: "Nah, we wanna go back to 2008, when were spending a seventh more than we earned" and everyone else is supposed to go along with that.

[Sava]

if only greece cut taxes on the rich, then they'd recover

[Fake Boris]

This is it, the EU is officially a fascist dictatorship.



"There can't be democratic choice against European treaties"

- Jean-Claude Juncker, President of the European commission.

[C0ckney]

colon: when there has been a 25% economic contraction, and unemployment has risen to nearly 30% it's hardly surprising that at some point things will start to improve. even zimbabwe started to grow again, yet few will affirm that this is a ringing endorsement of the policies that caused its collapse in the first place. this is just part of the false narrative that it was "necessary", that "there was no alternative", that it was "price worth paying".

but who has paid the price?

all those who lost their jobs, the workers seeing their wages cut (25% in the public sector, more than 15% in the private sector) all those who had to go abroad, the million or so left without access to healthcare, the pensioners who saw their incomes slashed (25% between 2010 and 2013); in other words the same people who suffer in every crisis of capitalism.

[C0ckney]

Not long ago, German politicians and journalists confidently declared that the euro crisis was over; Germany and the European Union, they believed, had weathered the storm. Today, we know that this was just another mistake in a continuing crisis. The latest error, as with most of the earlier ones, stemmed from wishful thinking – and, once again, it is Greece that has broken the reverie.

Even before the leftist Syriza party’s overwhelming victory in the recent Greek election it was obvious that, far from being over, the crisis was threatening to worsen. Austerity – the policy of saving your way out of a demand shortfall – simply does not work. In a shrinking economy, a country’s debt-to-GDP ratio rises rather than falls, and Europe’s recession-ridden crisis countries have now saved themselves into a depression, resulting in mass unemployment, alarming levels of poverty and scant hope.

Warnings of a severe political backlash went unheeded. Shadowed by Germany’s deep-seated inflation taboo, Chancellor Angela Merkel’s government stubbornly insisted that the pain of austerity was essential to economic recovery; the EU had little choice but to go along. Now, with Greece’s voters having driven out their country’s exhausted and corrupt elite in favour of a party that has vowed to end austerity, the backlash has arrived.

But, though Syriza’s victory may mark the start of the next chapter in the euro crisis, the political, and possibly existential, danger that Europe faces runs deeper. The Swiss National Bank’s unexpected abandonment of the franc’s euro peg on 15 January , though posing no immediate financial threat,was an enormous psychological blow, one that reflected and reinforced a massive loss of confidence. The euro, as the SNB’s move implied, remains as fragile as ever. And the subsequent decision by the European Central Bank (ECB) to buy more than €1tn in eurozone governments’ bonds, though correct and necessary, has dimmed confidence.

The Greek election outcome was foreseeable for over a year. If negotiations between the “troika” (the European commission, the ECB and the International Monetary Fund) and the new Greek government succeed, the result will be a face-saving compromise for both sides; if no agreement is reached, Greece will default.

Though no one can say what a Greek default would mean for the euro, it would certainly entail risks to the currency’s continued existence. Just as surely, the megadisaster that might result from a eurozone breakup would not spare Germany.

A compromise would, de facto, result in a loosening of austerity, which would entail significant domestic risks for Merkel (though less than a failure of the euro would). But in view of her immense popularity at home, including within her own party, Merkel is underestimating the options at her disposal. She could do much more, if only she trusted herself.

In the end, she may have no choice. Given the impact of the Greek election outcome on political developments in Spain, Italy and France, where anti-austerity sentiment is similarly running high, political pressure on the Eurogroup of eurozone finance ministers will increase significantly. It does not take a prophet to predict that the latest chapter of the euro crisis will leave Germany’s austerity policy in tatters – unless Merkel really wants to take the enormous risk of letting the euro fail.

There is no indication that she does. So, regardless of which side – the troika or the new Greek government – moves first in the coming negotiations, Greece’s election has already produced an unambiguous defeat for Merkel and her austerity-based strategy for sustaining the euro.

Simultaneous debt reduction and structural reforms, we now know, will overextend any democratically elected government because they overtax its voters. And, without growth, there will be no structural reforms either, however necessary they may be.

That is Greece’s lesson for Europe. The question now is not whether the German government will accept it, but when. Will it take a similar debacle for Spain’s conservatives in that country’s coming election to force Merkel to come to terms with reality?

Nothing but growth will decide the future of the euro. Even Germany, the EU’s biggest economy, faces an enormous need for infrastructure investment. If its government stopped seeing “zero new debt” as the holy grail and instead invested in modernising the country’s transport and municipal infrastructure, and in digitisation of households and industry, the euro – and Europe – would receive a mighty boost. Moreover, a massive public investment programme could be financed at exceptionally low (and, for Germany, conceivably even negative) interest rates.

The eurozone’s cohesion and the success of its necessary structural reforms, and thus its very survival, now depend on whether it can overcome its growth deficit. Germany has room for fiscal manoeuvre. The message from Greece’s election is that Merkel should use it before it is too late.

though i don't often find myself in agreement with joschka fischer, here he presents a decent analysis of the political effects of syriza's win.

[Felch]

This is it, the EU is officially a fascist dictatorship.

"There can't be democratic choice against European treatises"

- Jean-Claude Juncker, President of the European commission.

I don't know about Canada, but in America treaties trump statutes.

[Pedotard]

If your country signs a treaty all you have to do is elect a new government and the treaty is now null and you can do whatever you want. Germany did this with the Treaty of Versailles in the 1930s.

[dannubis]

there's a lot you don't get, frankly. i see you've changed your argument, which is good because the old one was very poor. but just to be clear, is your point now that greece's problems stem from its below average labour productivity?

I did not change anything you dishonest person. My point has always been that in the run up to the meltdown in 2009 Greece grossly overspent for its wealth generation. This is primarily due to 2 reasons: 1 for their level of spending the efficiency of their wealth generation wasn't high enough and 2, their was a serious widespread problem of tax evasion (aka corruption). For that the Greeks are responsible themselves.

And I don't see how throwing another few billions at them is going to change anything when they revert measures that should have been taken 10-15 years ago.

[C0ckney]

you asked where the stats came from, implying they couldn't be trusted, but failed to provide any alternative; i told you. you asked why i left out productivity, i said because it's not relevant, but even so i provided you with the real figures. you said something about 'government functions', i asked you what you meant and why you thought it important; you promptly abandoned it.

now you're going on about productivity and their public finances. everyone agrees that greece's public finances were a mess, so on this you are at best preaching to the choir. productivity is not the cause of the greek crisis - its productivity is not low compared to similar economies, nor would improvements in productivity resolve greece's economic problems (though it wouldn't be unhelpful). greece's crisis is a solvency crisis: it had a debt it could not pay; it still has a debt it cannot pay, and now a much smaller economy.

[Fake Boris]

If your country signs a treaty all you have to do is elect a new government and the treaty is now null and you can do whatever you want. Germany did this with the Treaty of Versailles in the 1930s.

What procedure do you propose to void or modify a treaty?

[Sava]

This is it, the EU is officially a fascist dictatorship.

Yes... if you ignore the meaning of the words "officially", "fascist", and "dictatorship".

[Fake Boris]

Yes... if you ignore the meaning of the words "officially", "fascist", and "dictatorship".

Nice try buddy, but the European constitution has never been approved democratically.

[Dinner]

This is it, the EU is officially a fascist dictatorship.

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"There can't be democratic choice against European treaties"

- Jean-Claude Juncker, President of the European commission.

Did you even listen to the quote. It would just like an American saying you cannot have a popular vote which violates the constitution.

[FlameFlash]

What about in a criminal conspiracy? If someone is on lookout while his friends beat someone to death for being a homosexual, doesn't he share some of the blame?

Apples and oranges man. A "democratic style" government's citizens do not all jointly share responsibility for the actions of their leaders. What of the people who voted against said leaders?

if only greece cut taxes on the rich, then they'd recover

Tinkle down... er... trickle down doesn't work. They just get bigger and eventually beg for a bailout when they become too big to fail.

If your country signs a treaty all you have to do is elect a new government and the treaty is now null and you can do whatever you want. Germany did this with the Treaty of Versailles in the 1930s.

In the US it's a great way for the Federal government to violate the constitution without making amendments...

Did you even listen to the quote. It would just like an American saying you cannot have a popular vote which violates the constitution.

That happens all the time though. Look at the states that ban same-sex marriage and later such a voted in law is deemed unconstitutional.

[Hauldren Collider]

In the US it's a great way for the Federal government to violate the constitution without making amendments...

Pretty sure that's not true. It trumps statutes, not the constitution.