tag:blogger.com,1999:blog-5882645467378797266.post3079039630314703167..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: Beware of Greeks Bearing Primary Budget Surpluses!kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5882645467378797266.post-20476203920190028292014-04-07T22:22:15.216+02:002014-04-07T22:22:15.216+02:00The problem with the analysis in the Geographis bl... The problem with the analysis in the Geographis blog is that it assumes that the really powerful discipline method is cutting off loans to the Greek government. This is wrong.The EC has a weapon so powerful it does not dare call its name:cutting off liquidity to Greek banks. Such a move will simply bring the country to its knees, but it cannot ever be mentioned, as it will cause the mother of all bank runs. This weapon can be used in a variety of ways, most indirect. If the powers that be decide that the Greeks are in need of a serious readjustment they will simply cut off liquidity (including note deliveries) and the local bankers will force the following dilemma: do as the EC says or the banks will not open tomorrow. The Greek governnment will cave immediately and nobody will notice anything. This weapon is still as potemt as ever and it will remain potent as long as the Greek economy is in need of liquidity injections ie for the foreseeable future. So don;'t expect any surprises there.theAthensdognoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-59116867068294422472014-04-07T14:33:45.496+02:002014-04-07T14:33:45.496+02:00Using a snapshot of the economy as negotiating adv...Using a snapshot of the economy as negotiating advantage, is far from reality. The truth about the 'Surplus' (which is mainly due to withholding payments towards third parties in the country...ie inner debt becomes surplus) can be found in the upcoming elections and the thousands of issues undermining the current government, in other words the Surplus is a communication prop, rather than an economic achievement....According to me the so called 'Surplus', even if it is actually 0,5 instead of 2,5 bln, has been based on the over-taxation (impose taxes in every irrational approach, pay 2-3 times for each asset/income etc) and the inhuman budget cuts which ended up even in loss life...Kill a few thousand pensioners and you have a surplus ...thanks a lot, can you sutain this ? Dimitris Felasnoreply@blogger.com