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Greece faces last chance to stay in euro as cash runs out

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Black Sabbath - Thanks. For the entire interview, see here:

http://thewire.in/2015/07/08/thomas-piketty-germany-has-never-repaid-its-debts-it-has-no-right-to-lecture-greece/

Piketty is only considered influential by socialist economists like himself. Even the economists of his own country, France, believe that Greece should make more of an effort to pay, or prepare to pay, back it's massive debts. The money will be made available, IF Greece makes more of an effort to get it's financial house in order.

Since his successful book, Capital in the Twenty-First Century, the Frenchman Thomas Piketty has been considered one of the most influential economists in the world. His argument for the redistribution of income and wealth launched a worldwide discussion.

.....DIE ZEIT: Should we Germans be happy that even the French government is aligned with the German dogma of austerity?

Thomas Piketty: Absolutely not. This is neither a reason for France, nor Germany, and especially not for Europe, to be happy. I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea.....

.....Piketty: Nonsense! This had nothing to do with moral clarity; it was a rational political and economic decision. They correctly recognized that, after large crises that created huge debt loads, at some point people need to look toward the future. We cannot demand that new generations must pay for decades for the mistakes of their parents.

The Greeks have, without a doubt, made big mistakes. Until 2009, the government in Athens forged its books.

But despite this, the younger generation of Greeks carries no more responsibility for the mistakes of its elders than the younger generation of Germans did in the 1950s and 1960s. We need to look ahead. Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance. We need to remember this.

It seems that Piketty, as well as the Greek government, believe that Greeks should bear little responsibility for it's mistakes, and they shouldn't be held responsible for cleaning up their own financial disaster. They just want more money from the EU taxpayers.

0 ( +0 / -0 )

Alex

Thanks. For the entire interview, see here:

http://thewire.in/2015/07/08/thomas-piketty-germany-has-never-repaid-its-debts-it-has-no-right-to-lecture-greece/

0 ( +0 / -0 )

@Black Sabbath: best post so far. Germany forgot how the rest of Europe forgave it and helped after WWII, included Greece that had suffered a lot because of Germany aggression.

-1 ( +1 / -2 )

ZEIT: Many Germans believe that the Greeks still have not recognized their mistakes and want to continue their free-spending ways.

Piketty: If we had told you Germans in the 1950s that you have not properly recognized your failures, you would still be repaying your debts. Luckily, we were more intelligent than that.

ZEIT: The German Minister of Finance, on the other hand, seems to believe that a Greek exit from the Eurozone could foster greater unity within Europe.

Piketty: If we start kicking states out, then the crisis of confidence in which the Eurozone finds itself today will only worsen. Financial markets will immediately turn on the next country. This would be the beginning of a long, drawn-out period of agony, in whose grasp we risk sacrificing Europe’s social model, its democracy, indeed its civilization on the altar of a conservative, irrational austerity policy.

ZEIT: Do you believe that we Germans aren’t generous enough?

Piketty: What are you talking about? Generous? Currently, Germany is profiting from Greece as it extends loans at comparatively high interest rates.

2 ( +3 / -1 )

" having to introduce a parallel currency. "

HAVING to introduce it? They are all dragging their feet and screaming, trying to avoid the ONLY solution to the problem. WIthout its own currency, Greek can not get well.

Has none of these clows in government and media read up on all the other failed experiments with a hobbled currency, like Argentina with its failed "dollarization"? The longer they hesitate, the more painful it will be.

2 ( +2 / -0 )

As expected Greece has made a formal request from the ESM loan facility a three-year bail-out the conditions remain unchanged, ELA remains frozen, so the banks will remain closed, German Chancellor Angela Merkel is steadfastly sticking to her guns. However the France Government is beginning to wobble after US Treasury Secretary Jack Lew warning of economic and geopolitical consequences of a disorderly Greek exit. Sunday will certainly become a day of reckoning, the numbers suggest that Greece are days away, a week max from having to introduce a parallel currency.

0 ( +0 / -0 )

Bailouts will just buy Greece time. The country needs to bite the proverbial bullet and take its medicine.

1 ( +2 / -1 )

The Greek prime minister, Alexis Tsipras, recently remarked that if he were to meet alone with Angela Merkel for dinner, they would have found a formula in two hours. His point was that he and Merkel, the two politicians, would treat the disagreement as a political one, in contrast to technocratic administrators such as the Eurogroup president, Jeroen Dijsselbloem.

And, in case you forgot, no one ever voted for eroen Dijsselbloem.

1 ( +2 / -1 )

The next emergency summit on sunday is the big one. All EU nations are present to decide if they are willing to finance Greece.

0 ( +0 / -0 )

Strange how the mainstream media completely distorts the news.

Staying in the Euro is not a "chance" to be taken, it is the cause of the misery.

Returning to its own currency, suitable for its economy, is an absolutely necessary step for recovery.

So many economists have been pointing this out, why do the media still collectively miss it?

4 ( +6 / -2 )

And thats it. The world will not notice the absence of Greece or it's return and the EU, euro and the world will not fall apart.

You are absolutely correct. This threat of collapse has been used as black mail by Greece and those who want the gravy train to rumble on. Maggie said it best........." The trouble with socialism is; sooner or later you run out of other people's money."

1 ( +7 / -6 )

Greece leaving the euro will have no effect on the euro itself. Money always represents value, currency has no intrinsic value, regardless of what socialist economists believe. Since Greece has no value, it has no productive economy, no usable resources, not even labor or ideas, they are not contributing to the value of their euros anyway.

All that will happen is world wide socialists will hope the evidence of the latest example of the failure of socialism gets out if the news fast. The defaulted 400 billion isnt even vacation money to the world wide political class who funded greece and the trillions they steal each year.

The world wont even notice greece defaulted. Greece will then go through a period of turmoil as the parasite government class and the lazy on welfare all end up fired and pushed out of society. There will be 5 years of pure barter, better known as capitalism, and maybe these newly freed barter/capitalists will use the pound, dollar, yen or whatever is available. Greece will print money, peg it to the dollar and make a return. It will never pay those loans and they shouldn't. The former government people, imf, EU and other,politicians who used Greece as a playground for socialism can pay back the loans they never should have made.

And thats it. The world will not notice the absence of Greece or it's return and the EU, euro and the world will not fall apart.

-2 ( +3 / -5 )

Hi Christopher Blackwell, equity markets in Hong Kong and Shanghai have been routed, being reflected in early trading on the N225 in Tokyo, heavy losses, you rightfully stress playing second fiddle to the Greek debacle.

Greece - press and media have reported back office/3rd line OECD analyst/strategist involvement in conjunction with ILO (International Labour Organisation) on details reviews on structural reforms of tax and institutional reorganisation with a view to strengthen Greek collective bargaining laws. However from the outset EU/ECB, and Euro zone stakeholders are aggressively resisting any independent review of existing or past behaviours. No longer subject to confidentiality clauses.

1 ( +1 / -0 )

@fxgai - Oh, some very important lessons will be learned if Greece leaves the Euro zone. I trust that you will be following your own advice and paying attention.

-1 ( +0 / -1 )

Greeks have been sucking off the public teat for so long I'm surprised the other Euro nations even let it come into the club.. Let the country fail - that's what it's always been best at. People who think their nationality, history, or whatever, gives them carte blanche on financial responsibility will ultimately pay the price. A wheelbarrow full of worthless money for a loaf of bread? Who put them in that position????

1 ( +6 / -5 )

The Latvians and Lithuanians (and Estonians too, although not mentioned in this article) appear to have their heads screwed on the right way, in contrast to this crazy Greek government.

Is it really that ‘we don’t have proposals’ or is it that they don’t like our proposals?”

Probably the latter, but it's Greece that's about to totally crash and burn. A little more urgency and desperation might be in order? They probably just don't get it.

Even with the country on the brink of economic collapse, Greek officials said the government was still seeking exceptions from its reform pledges to protect special interests.

Best to collapse first then, so that all can be reset without such useless baggage weighing the ship down.

The Athens stock exchange was also ordered closed for two days on Tuesday and Wednesday to throttle speculation.

Thursday and Friday too, I'd wager.

Guy_Jean_Dailleult,

Greece will be able to print its own currency, but that alone will not lift it out of basket case status. I expect some important lessons will be illustrated from this episode, so pay close attention!

Christopher Blackwell,

I think you're right, I can't see Greece having much real impact, but millions of Chinese farmers and waitresses losing their shirts in the pop of their stock market bubble could have far more reaching consequences.

0 ( +3 / -3 )

Let's just have Germany solve this problem by having their people vote on a referendum asking do they support sending Greece more money under Greece's conditions. If they vote no then we should all respect democracy and let Greece figure a way out of their own mess.

8 ( +9 / -1 )

The Greek economy amounts to about 2% of the Eurozone's GDP. Germany can withstand a few tens of billions in losses due to default. Socialism in Greece is at a more advanced stage than in Spain, Italy, Ireland, and Portugal and is the first to go belly up. The EU will be better off ditching Greece now and worrying about their other sick members.

4 ( +8 / -4 )

Jeez how many chances do they get? Once im in debt, im sure the bank wont give me another 50 chances.

Countries and people are different things. If you don't pay your debt, your bank doesn't face major losses beyond your debt. But Greece leaving the Euro damages people's confidence in the Euro, meaning that it will be devalued. If Greece leaves, then Spain and Italy both could too, since their economies are not doing so great either. If they were to default without support from other Euro countries, then debtors would lose that investment.

It all boils down to confidence, and Greece defaulting and leaving the Euro would shake that confidence. This is why they keep getting last chances. If an individual defaults on a bank loan, only confidence in that individual is lost.

-1 ( +2 / -3 )

I am curious why everyone is ignoring the much more serious problem of China's economy which a collapse could have a far worse affect on the world? Chinese Government banks are lending money for people to buy stop to advert the present collapse of the stock market. When the United States did this in the 1920s it led to the depression. Greece is small potatoes compared to China that is a major world economic power.

4 ( +5 / -1 )

As usual, the MSM has it all backwards and claims that the risk Greece faces is that it will have to leave the Euro and issue its own currency. Well, as should be obvious, if having to print your own currency was the cause of economic disaster then the countries that do that would be the basket cases and not Greece. Or Spain, Portugal, Italy, and Ireland.

0 ( +2 / -2 )

Greek debt compared to the public bailouts of evil banks:

https://twitter.com/MeanwhileScotia/status/617773804807393280/photo/1

0 ( +1 / -1 )

Jeez how many chances do they get? Once im in debt, im sure the bank wont give me another 50 chances.

2 ( +6 / -4 )

Angela Merkel does not want to have a dead body on her hands -- not in Europe, not in her Europe. Greece wins. Hurrah!

0 ( +4 / -4 )

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