The Eurozone Crisis Thread

pay up, you lazy greeks!

The euro climbed to a one-week high against the yen of 137.27 yen and was last at 136.99, up 2.4 percent. The euro zone common currency was on track for its largest one-day gain since April 2013. Against the dollar, the euro was up 1.2 percent at $1.1167. MSCI's all-country equities world index jumped 1.3 percent. The Dow Jones industrial average rose 171 points, or 0.97 percent, to 17,719.62, the S&P 500 gained 20.37 points, or 0.99 percent, to 2,071.68 and the Nasdaq Composite added 58.10 points, or 1.18 percent, to 4,980.50. European shares were up 1.8 percent.

http://www.reuters.com/article/2015/07/10/us-markets-global-idUSKCN0PJ2ZW20150710

Chinese stocks were also buoyed by a raft of support measures from Beijing that appeared to calm investors. Panic selling had slashed a third of the value off mainland markets since its peak in June. China's worries have spread to other markets, with iron ore the hardest-hit industrial commodity and oil prices also hit.

I wonder at what point Tsipras accepted he would have to cave. There are rumours he was hoping the lose the referendum so as to have an "honourable" way out.

I think the referendum was a bargaining tool to scare Merkel et al into giving into their demands but they called their bluff. Still, some debt restructuring, right?

The idea that it was possible to proceed on austerity alone without investors making any concessions on debt restructuring was a wrongheaded notion from the first. There was brinksmanship on both sides, but when your position is as strong as the troika, employing brinksmanship just to gratify your sense of moral superiority is kind of like playing internet hardman with an entire country. Greece's brinksmanship was at least more defensible, because they really are standing on a brink.

they called their bluff

yup

employing brinksmanship just to gratify your sense of moral superiority

don't think this is quite or entirely accurate characterization of troika's considerations/ calculations here

morality aside, for one thing, there was potential that greece might set precedent for other countries to follow-- big reason why i've felt imf/eu would/could not make anything other than minimal concessions (if any) in response to greece's desperate gambit

^^^ Is exactly what this is about, deterring other countries from electing far-left governments - any substantial concessions to Syriza would effectively have rubber-stamped an enormous redistribution of money from northern European countries to southern ones. Northern European countries that appear to only be in favour of greater political union when it suits them.

I don't think this will deter people from electing Podemos or other parties on anti-austerity tickets such as Sinn Fein, and Syriza are still there - ultimately Tsipras is being a politician and this is still a long game.

Existentially long game

If the troika was concerned before about Greece potentially dragging their feet and not implementing the 'necessary structural reforms', well, now the government has a clear democratic mandate to drag their feet and not implement reforms.

That's all very well but barring a complete 180 in German or Greek public opinion there's no plausible end to this crisis that doesn't involve one government or another going against the democratic will of its people. And I have a feeling it's unlikely to be the guys with the money.

Major debt relief and another bailout would be both the morally and pragmatically correct thing to do but how is that going to happen with the German public so vociferously opposed? Could any other institution do more here? Serious question.

Markets distort democracy even during good times by effectively allowing governments to opt out of unpopular tax and/or spending decisions, until suddenly they can't any more. I can't remember any example of a government consulting the electorate on borrowing or making it an electoral issue during a boom.

Not that the Greece accepting every troika demand and accepting another bailout is going to get anywhere near ending the crisis, but whatever.

for those on the edge, the EU is not a v attractive proposition atm. i wonder how this will effect the UK referendum, it doesnt change anything for the eurosceptic right, it will harden the eurosceptic left, but lots of those in favour of further EU integration will have lost faith in the current set up & culture. otoh never underestimate the british publics ability to endorse the status quo

Britain is kind of a special case due to not being in the Eurozone though? I'm not sure the Eurosceptic left is really a big enough contingent to make much of a difference either way, although it must be growing.

My guess is enough of the undecideds will vote to stay in when faced with the possibility of their jobs abruptly disappearing.

the special cases are what's interesting though, the EU hasn't handled its periphery well lately. if it has ambitions of expanding either the EU or monetary union it's not obvious how it intends to do it

after the last 12 months how any leftist can not be sceptical of the EU beyond it's cuddly wuddly brotherhood of nations shtick and easier access to Tuscan holidays, god only knows

skepticism (or a bit different, critical awareness) is one thing, but EU integration isn't just a schtick in academic circles: lots of research, multinational degree programs, faculty mobility etc benefit from EU integration. and we are generally on the left, but not so far on the left that rhetoric merges with the FN e.g. (which you see in the left here at times)

yeah i recognize it's more complex than my own shtick acknowledged, but it's still been made pretty clear now exactly what kind of economic ideology commitment to the EU is to entail

I mean as someone newly hitching his post to the EU from Amerikkka I realize my views are suspect : but : nations considering entering the Eurozone might consider calling referenda on this membership, without their populaces having any real idea of the consequences. would Greeks have voted for Euro adoption in 2000? would that have been used against Greece now? I don't know what to make of the relation between democracy and the economics of the EU.

Greeks wanted the advantages of the Euro so they doctored their books to get allowed in. Which was bound to bite someone in the ass sooner or later. (how true or exceptional this is among Euro member states, I don't know, but it's brought up often re:current situation)

Eurozone member nations helped them cook the books though

the pensioners weren't the ones who doctored the books though. the idea of financial "discipline" for the working class is gross. even more so is the fact that it's being imposed on a sovereign nation against its will.

i understand why tsipras is caving to the creditors' demands. exiting the euro and not receiving a bailout wasn't a real option for a politician who cares about the immediate well-being of his people. still, it's tragic.

http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs-helped-greece-to-mask-its-true-debt-a-676634.html

goldman sachs bankers can buy greek islands now even cheaper than before. who cares if greek kids can't find any work? it's their own damn fault!

germany has reportedly drawn up a paper suggesting greece could temporarily exit the eurozone.

eh?

In out in out shake it all about

Bitcoin to the rescue

Sort of feel that the EU is only ever as good as its constituent governments and there are some pretty repellant ones in power in key nations right now, although France and Italy look like they're privately if not yet publicly clashing with Germany over Greece right now.

Temporary Grexit is the stupidest back of a fag packet idea I've seen yet BTW.

That's all very well but barring a complete 180 in German or Greek public opinion there's no plausible end to this crisis that doesn't involve one government or another going against the democratic will of its people. And I have a feeling it's unlikely to be the guys with the money.

well, the ones with the money are also the ones with greatest contempt for democratic will of people, so you could flip that round and say it's the guys with the money who will eventually say fuck it. I do actually think 'popular outrage' against spendthrift greeks is a largely elite created phenomenon which could be easily reined in by those same elites if they thought it convenient. It's basically a small country having sovereign debt problems- who in Germany would really care, left to themselves? It's astroturfing.

i feel like you have to make a kind of 'false consciousness,' what's the matter with kansas type argument to believe that non-upper class nativism / protectionism / anti-immigrant sentiment / whatever is astroturfed and not sincere. ppl w/out a whole lot are very protective about what they do have and i think sincerely are afraid of foreigners trying to take it.

i'm like more inclined to think that elites and the public are both neurologically hardwired to think of some ppl as their landsman and others as strangers + resent the latter. obv i don't think this sentiment is in any way positive. considering that the whole euro project is predicated on this idea of europeans as having a shared identity + vision of the future this whole crisis would be a better opportunity to try and smooth those borders.

mmm, yes, I'm not keen on false-consciousness type arguments in general. I do think though that this is an issue which would never have gained popular momentum in the first place, had the whole issue been kept by the relevant governments at a dry, technocratic level: within-eurozone transfers are required between core and peripheral nations in order to secure the stability of the currency- that sort of thing. Instead, they insisted on making it about nation(s) vs nation, and rubbed the lamp of nativism / protectionism, the othering of outsiders, the closing ranks around ones landsmen, all that stuff that you're quite correct about. They had the choice, and emphatically rejected the opportunity to try and smooth the borders, to strengthen the idea of a European shared identity.

I don't think this will deter people from electing Podemos or other parties on anti-austerity tickets such as Sinn Fein, and Syriza are still there - ultimately Tsipras is being a politician and this is still a long game.
― xyzzzz__, Saturday, 11 July 2015 09:11 (Yesterday) Bookmark Flag Post Permalink

it will hurt sf imo

and rightly so. and for the better.

Depends on how it goes for Greece - what degrees of bad and who that is seen to be caused by.

At the mo its looking like (i) Eurozone splits mean Greece get kicked as they don't trust Syriza to implement but actually (ii) if Euro does approve bailout Syriza could fall apart within months, meaning greeks will get the centrist pap that has dominated Euro politics for most of my lifetime.

If Greece are kicked that could (i) teach Spain and France a lesson if its public go the wrong way in the polls or (ii) be the first step in finishing Europe, or large parts of the Euro project.

Like to think they'll approve but bullets in Sarajevo etc.

is this a coup?

Is the Euro (as opposed to the EU itself) even worth saving at this point?

for all of the stereotyping ("greeks are lazy / shifty / uppity" etc) passing for serious analytical discourse, there's not enough "germans are stupid" and "capitalism is bullshit"

It's us and them all over again, innit. They're always wrong and we're always right.

they're wrong insofar as "they" are banks charging interest rates too high to pay back. always

is this a coup?

― hot doug stamper (||||||||), Sunday, 12 July 2015 Bookmark Flag Post Permalink

The third one?

By trying to push out Greece the Eurozone wants to send a 'this is what happens if you even try to contemplate leaving the Euro'. Its not about whether its worth saying, the alternative is too messy to contemplate, the show must be kept on the road.

There was a temporary Grexit idea last night - that has been dropped. The 50bn sell off of assets (i.e. negotiation tactic, also called waterboardng) seems to be a 'up to' 50bn now.

This morning Eurozone wants all sorts of checks to be consistently applied as it doesn't trust Syriza. Or something.

A deal has been reached. Struggle to imagine it could include handing ports and national grid to Luxembourg to sell off to the highest bidder but we shall see.

Tusk has confirmed rumours of agreement but says several national parliaments, presumably including Greece and Germany, will need to sign off.

The concession Tsipras was able to win was that the independent group in charge of selling off €50bn of state assets will be located in Athens rather than Lux. Wouldn't bet on Syriza getting this through parliament without falling apart.

Even the idea of selling 50bn in the first place is crazy.

None of this will gte sign off - see you this time next week.

It's not just the value - it's the nature of the assets. Strategically and psychologically, losing control of Piraeus and other key ports would be a massive blow and I can't see how Tsipras would be able to convince Independent Greeks or his own party, let alone the majority of Greeks who voted against much less extreme measures, even if he'd had some sleep last night.

Agreement details here:

http://www.consilium.europa.eu/en/press/press-releases/2015/07/pdf/20150712-eurosummit-statement-greece/?utm_source=DSMS&utm_medium=email&utm_campaign=Euro+Summit+Statement+12%2f07%2f2015&utm_term=952.16310.1082.0.16310&utm_content=all+customers

http://www.newstatesman.com/world-affairs/2015/07/yanis-varoufakis-full-transcript-our-battle-save-greece

what a tool

cant believe that ppl who have to make shit happen didn't welcome his awesome powers of theoretical/analytical framing

Sounds as good an alternative to what is currently being proposed.

greece should sue the british for $50b for stealing the elgin marbles