Having spent the 1980s in Chile/Argentina as a banker with direct involvement in the then debt rescheduling negotiatons, I have criticized from the very beginning that EU-elites adamantly refused to seek advice from those who could provide it, namely the then decision-makers in Latin American debt reschedulings.
When I first listened to Andres Velasco's speech at the recent INET-Conference in Berlin, I was most impressed by what he said. But then, I always was most impressed by Chileans!
Prof. Velasco has now published an article which outlines, based on Argentina's experience, very accurately what could be in store for Greece. I have lived in Argentina when inflation was around 25-30% per month (!) for a sustained period. When bank deposits had to be frozen.
Greeks, believe me, you ain't seen nothing yet when it comes to what may still be in store for you. Be nice to the EU because that could be the only thing which saves you from sheer agony which would otherwise grip a hold of Greece for at least a couple of years.
When I first listened to Andres Velasco's speech at the recent INET-Conference in Berlin, I was most impressed by what he said. But then, I always was most impressed by Chileans!
Prof. Velasco has now published an article which outlines, based on Argentina's experience, very accurately what could be in store for Greece. I have lived in Argentina when inflation was around 25-30% per month (!) for a sustained period. When bank deposits had to be frozen.
Greeks, believe me, you ain't seen nothing yet when it comes to what may still be in store for you. Be nice to the EU because that could be the only thing which saves you from sheer agony which would otherwise grip a hold of Greece for at least a couple of years.
So ist es, aber die Griechen gefallen sich in arrogantem Selbstmitleid gefallen, zeigen Reformbereitschaft nur auf dem Papier oder in ihren Worten, und verhalten sich wie die Kuckuckskinder im kuscheligen Eurozonen-Nest.
ReplyDeleteEs wäre daher unbedingt wünschenswert, dass sie real erfahren was es bedeutet, wenn "stupid Frau Merkel" (was die Griechen natürlich anders meinen als ich!) tatsächlich aus ihrer Dummheit aufwacht - und aufhört, unser Geld in Griechenland zu vergraben!
So your opinion is to sustain everything because we have no other option..with this rationale we will continue to be enslaved in central european geovernment's will in order to survive..not to live but just to survive!you can understand the difference I guess. No living thing in the planet deserves that..It is always best to go to zero and start again..this insecurity does not help the country's development and more essentially, the country's mental stability.Believe me..I am greek apparently, and never before the suicides were in this level, never before the citizens keep on living and working without knowing if they will possess their house the next day..the only point for the decision makers is for greeks to continue working with salaries reduced at 50% so the foreign investments (derived from the central europe mainly) would be done at lower cost for the investors..Otherwise in the agreement, it wouldn't be included that Greece will continue spending the same amount of money for military equipment as it was spent before IMF. Do you really suggest this is the best option??
ReplyDeleteMy best regards!
My opinion is that remaining a member of the Eurozone is Greece's best option, but I may be wrong and I am carefully listening to those, increasingly frequent, opinions voiced by Greeks that, regardless what it may cost, a return to self-determination (i. e. a Grexit) would be the greatest good for Greeks. You also seem to prefer going back to zero if that allows Greece to do its own thing.
DeleteHow much Greece spends on its armed forces is clearly a decision for Greeks and not for the EU. Make no mistake about it! Many tax payers in the North simply can't understand why Greece, with all its economic pains, would still continue to allocate luxuries to its armed forces.
It is also a decision for Greeks whether they want to take money from the living in order the pay pensions to the dead and, particularly, whether they want to primarily hit the "usual suspects" with pains. Those are those Greeks whose income is taxed at the source (salaries, pensions) and who have always had to pay taxes. My understanding is more than 50% of all Greeks in a working activity.
I only have to look around a little in Greece to see all that enormous tangible wealth all over the place owned by the few who I doubt have ever made a significant contribution to their society.
Last but not least, remember that part of Greece's foreign debt today exists because some Greeks had the resources to withdraw over 70 BEUR in deposits from bank accounts in the last 2-1/2 years and some other Greeks have 3-digit billion Euro figures on deposit in foreign banks. Those are the people you should get angry at, much more so than EU governments. Those are the people you should call for support!
I think the situation for many Greeks is simply terrible and the perspectives for the whole country are not much better, either. So we both agree on defining the problem. That's the easy part. When it comes to solutions it gets tough.
I see no solution whatsoever that Greece can painlessly return to a more self-determined way of life. If you do, please let me know what it is.
We don't disagree about a lot of things you mention. For example the specific example you use of paying pensions to the dead, and many other examples that have came up the last two years..Although my personal impression is that when a country is in the centre of the people's attention many things come up that deserve to be enlarged alhough there are other many actions which are against the law and are taking place in the whole world but they are never come to people's attention because there is not so publicity as Greece 'enjoys' the last two years..
DeleteOf course the political system is corrupted in Greece, but not only in Greece. Don't forget that Greece was accepted in the Eurozone as any other country of the EU, after the positive opinion of the rest countries of the Eurozone expressed by the appropriate councils ets.
Of course there are people as you said that withdrew money from their bank accounts just in case of a possible bankcruptcy.
Of course there are few people who have accumulated wealth while the majority not. But Greece is not an exotic islandic country with a dictator in the power who does whatever he wants and this has as a result that the majority of people live below the margins of pauverty. Greece is (or maybe was) a modern country where all the fundamental of the free economy is being applied. Everywhere in the EU the wealth is accumulated in a small amount of persons who live from the system and support the system. This is not a greek phenomenon..
And because we live in a free democratic country where capitalism exists I cannot demand from those people to pay more than they pay according the current legislation..Unfortunately that's capitalism!!Because these people are the ones who essentially govern.Every elected government in the world is in need for money in order to expand the pre-elective campaign..Who pays for that?Apart from the money that are given by the government, the rest is given by these people you claim..apparently they will ask something after the elections. I guess that pretty much the same apply also in your country.
Finally, regarding the military expenses you believe that it is each government's decision how much to spend. When the same companies sale guns to Greece and Turkey, when Greece and Turkey are both parties of NATO we are speaking for a war that will never be done. And who makes money of all these? Of course the correspodent companies, which are located (partially in case of Greece) in France and Germany. And you know better than me that when a multinational company is expanding to other problematic areas (see Iraq and the american oil companies) not only makes money but also serves its country politics and imperialistic views. (imperialistic with terms of economic enslavery). And above all Greece is not a powerfull country, millitary speaking, which will start a war. And apparently all in the EU know that..So these are decisions of the greek government but they are originated from a central entity which is not in Greece. So if you or other people cannot understand why Greece spends so much money to army equipment, you are not the only one..
My central meaning that EU is a central political and financial entity and it acts like this..The funding that Greece asks in order not to go to bankcruptcy is given for a reason. Otherwise Greece would be out of Eurozone two years already, due to the simple reason that the other governments would spend less than the loans they are giving to Greece.
So how is that better? Of course going to zero is much painfull but at least at some point some development and growth will take place again. I do not know when. Maybe in 5, maybe in 10 years.But this situation is horrible and you cannot ask from a society that has rates below zero in growth and development to pay more taxes..It is against the fundamental of the capitalism as I said before.
(Sorry for my poor economical vocabulary but I am not an expert in economics)
Thanks!
I have always argued that one of the worst consequences of the crises in the South is that it makes the North look like everything there is in good shape. Yes, my country Austria has many, many similarities with Greece in the area of politics, role of parties/politicians, corruption, etc. etc. Once the barrier falls and dirty laundry is publicized, things go overboard. Should Austria get into trouble, many things would be said about Austria which are now said about Greece.
DeleteThe great problem, in my opinion, is that no one to date - neither Greece nor the EU - has come up with a long-term economic development plan for Greece. Without such a plan, I see no future promise. Free market forces alone won't solve the problems at hand. Below is what I had first suggested over a year ago.
http://klauskastner.blogspot.co.at/2011/09/endgame-for-greece.html