Pretty corrupt but at least he knew what he was doing.

Syriza and Tsipras are out of their leagues.

But yes, you're right, Syriza and Tsipras are not "the" problem. They are symptoms of much bigger issues. The problem at this moment in time is Syriza and Tsipras show little political will or competence to fix seemingly any of those issues.

Greek problem actually have little to do with the crunch of 08. Maybe that has fast-tracked their default by a couple of years but that's about it. Greek banks were also involved very little in US subprime loans and things like that.
The problem was (and is) that Greek government spending was not sustainable in the first place. Prior to joining the Euro Greece had to pay about 8 to 9pc of their GDP on interest payments alone. After they got into the Euro that no. suddenly dropped to about 4 to 5pc GDP and the Greek governments were using that to massively increase government spending financed by new net debt. In 2007 about half of government spending was financed by new net debt (!). About 1/3 of the European money was used to pay off foreign creditors after the government had taken over the banks, the other 2/3 was simply used to uphold government programmes. The cliffs here are:
Even without the 08 crisis Greece would have defaulted, maybe 2 to 5 yrs later
Greek GDP was hugely artificially blown up by unsustainable debt (pre-crisis), without the European money and the capability to get new credit it wouldve shrunk maybe by 50 to 70pc instead of the 30pc it did.
Therefore as another poster pointed out it's quite LOL to even call what is happening austerity in the first place, it's more like reducing the Greek spending to levels that have any chance of being sustainable.
As a reminder, due to the low interest repayment terms of the European credit Greece is now paying less than 5 pc GDP annually for interest so it is on the same page as many other European countries and about half of what it was paying before the Euro. Even if there was a new haircut as long as Greece does not work both on the spending and the income side to levels it can sustain it will simply default again a couple of years later.
It's a long debunked myth that you can simply put new money into an economic system such as a state and it will pay for itself via economic growth. It has been shown that on average only around 1/3 of that money comes back via additionally generated taxes over the following years and that is assuming an efficient tax collection system, in Greece its prolly a lot worse.

LOL. Varou**** was/is a university professor at public universities all his life AFAIK. He was (or is, dunno) at the University of Athens long-time enjoying a splendid salary financed via an unsustainable state debt that he now calls unbearable/terrorist and what else. Yes, he had that consulting job at Valve and maybe a couple others but that's not uncommon for a University professor.

So Phone Booth's solution for a country with a completely unsustainable retirement system on top of a dysfunctional tax collection culture is... To throw money at it and let the economy grow so the state's income will increase? That's a high unicorn level of thought for someone who is normally so thorough in his posting.

I'm also curious why the rest of Europe would be afraid for a left-wing political success. Many of the eurozone leaders are social democrats themselves and Spain is the only country with a left wing populist movement that resembles the rise of Syriza somewhat.

And I'm surprised that you take Varoufakis seriously at all. I saw little substance policy wise, and a destructive attitude at the negotiating table.

Varoufakis was such a buffoon Tsipras had to sideline him even before the referendum.

Its also worth pointing out that the public sector and especially the civil service in Greece is highly corrupt, bloated and has been systemically built on cronyism.

In a vacuum, I can get behind the idea of realistic debt relief, stimulus etc etc, but the problem is Greece as an institution is just to mal-adjusted to recieve such.

This whole hypothesis and line of reasoning is totally mooted by the fact that the zero-ish primary deficit is only for one reason, because spending has been cut so dramatically.

Receipts have actually fallen, which is no surprise.

I am keen to see specifically in black and white which reforms demanded by the Troika you think have been so terrible.

It seems naive and borderline conspirationist to say that a stimulus package would work better than austerity and that other European governments just dont want Greece to succeed.

Btw, the first Greek austerity plan was decided in 2009 by the newly elected socialist government. Following their election, they revealed that the Greek finances were in way worst shape than thought and announced austerity measures. They had won the election by promising a stimulus plan. If it had been the solution, they would have implemented it instead of commiting political suicide by switching to austerity.

Only the 2nd part would sound tinfoily.

The main difference between Greece and the US is that Greece, at it's worst, had a structural deficit of 15% of GDP or something like that and the US had a much smaller one. The deficits might look similar in the year the US had tarps and stimulus or whatev, but they really werent.

Monetary policy and growth propects and stuff like that might have made difference too, but the main issue is that Greece would have run a massive deficit even in an average year.

Yeah, this will take some time to fix.



http://www.wsj.com/articles/greece-s...xes-1424867495

Anyone talking about Stimulus is ignoring that Greece has been given Grants by the EU that are totally independent of the bailout.

Im still looking for concrete numbers, but this looks fairly substantial:

http://www.anaptyxi.gov.gr/Default.a...language=en-US

Also the newest follow on grant from the above tranche totals 4B for the period 2014-20.

I think these are standard grants, if the EU does not have its a ****ing balls to the wall emergency grants, that seems very dumb, given they are all ready in the grants game.

http://www.theguardian.com/news/data...european-union

Cliffs: Greece receives around €5b annually more than it contributes out of the regular EU budget. It was also reported widely that they could spend more out of EU programs but dont because most programs require some national cofunding.

You're so cynical about the politicians you don't like, but you get all dewy-eyed about the noble self-sacrificing Greek guys you approve of. But on your account, Syriza seems to be either:

A. A bunch of incompetents who failed to grasp the basic nature of political negotiations (i.e., that they are political) even though they were elected for the sole purpose of managing a high-stakes political negotiation; or

B. Irresponsible and self-serving politicians like the rest who are only interested in seeing a deal that furthers their favored political narrative.

If the incentives of the center-right EU politicians are to avoid handing Syriza and the far left a political victory, then it seems pretty obvious that in order to get a deal done for Greece, Syriza would have needed to mitigate the appearance of the deal they wanted being viewed as a political defeat for the right and a victory for them. They did the exact opposite.

Is there a good market indicator or even a bookie line on the probability of grexit?

Betfair lines are at roughly 65% No, 35% Yes:
https://www.betfair.com/exchange/plu...et/1.117087478

Predictit also has a market on it, but the spread is huge there atm:
https://www.predictit.org/Home/Singl...?marketId=1294

European markets are up today. If there is a no deal after close, just pile in on the short side massively leveraged tomorrow.

We're apparently back to this weird incoherent narrative that Greece is so screwed up beyond belief that nothing can possibly done about it except pass STRUCTURAL REFORMS! yet everything was just fine before Syriza. Things have always been bad, Lou, there is no brinkmanship, just desperate people.

This is a false dichotomy because you're assuming that there was some kind of better choice out there somewhere. I don't think there was. From a purely economic perspective, going through the crisis now and killing the banking system may be marginally better than continuing euroreforms on euroterms.

I mean, even now, Syriza could probably capitulate and receive more money than had they capitulated earlier. Also, while the banking system being on life support is a bad thing, it both opens more options for more meaningful reforms and improves their bargaining position. After all, the main threat Europe held over Greece has always been that the banking system would completely fail without continued European support.

It's more that they represent the tax dodgers themselves. And it has to be emphasized - these are the people supported by the Eurocrats.

These aren't Syriza efforts - these are ideas they proposed. When you have a hard problem, you brainstorm and try a bunch of different things. If you're not coming up with stupid ideas, you're not trying.

Yeah, what does an economics professor know about economics anyway?

Yup, totally unicorn mainstream economics. Again, the interesting thing to me here is that not only is this completely mainstream economics, this is exactly what most people want for their own country. But those lazy greeks, just **** them right?

Are we pretending that you ever had any intention to evaluate the situation fairly?

That would be a discussion by itself but has nothing to do with your original point where you claimed he was a champion of the private sector.
I think you're simply trolling at this point anyway.

These Greek political clowns are the same clowns that brought up "war reparations" in April. Wasting everyone's time.

The Greeks voted in a completely incompetent ruling party and now these guys are in charge of turning things around. I don't have any confidence.

That you should just throw money at an economy regardless of major structural problems is far from mainstream economics.

The claim to mainstream economics is perhaps one of the most over used memes on the internet given how much divergence in opinion there is in economics, especially in Macro.

Yup those corrupt Greek politicians keep receiving bribes from our people to screw over their own, there's no choice but to starve the poor people!

https://en.wikipedia.org/wiki/Siemen...ribery_scandal

Even going back, was there ever a point where they would've run a large deficit with average-ish tax collection efforts? Aren't they collecting like under 50% of what they're owed? Either way, Europe's position is to cut more spending and increase tax rates and Syriza's position is to keep things where they are for the most part, right? So it seems, again, that what Syriza wants is completely reasonable and maybe even a little too right-wing/austerian, while what Europe is asking for is completely insane, like lunatic fringe stuff not dissimilar to taking serious the ramblings of subway preachers.

They are not really demanding "reforms" as much as just wanting Greece to cut random programs and tax everything until TARGETS are met. The beatings will continue until morale improves I guess.

Eh? Public sector corruption ok, coz private sector corruption....wat?

Also asking to put up VAT and increase pension age, the actual specific reforms (which I suspect you dont actually know, yet are hating on) which caused this impasse are lunatic fringe stuff????

Cmon man, your looking like the lefto pinko version of Steelhouse.