Greek Default Ahoy!

[Spoonist]

@Stas Bush
Are those the corrected numbers or the polished ones?
I ask since their current crisis began with their gov admitting that their predecessors had fudged the numbers.

[Terralthra]

This is getting a bit ridiculous. Can't Thanas and Stas Bush take this EU economic imperialism thread to the Flavian Amphitheatre or something? It keeps coming up over and over.

[Sea Skimmer]

This is getting a bit ridiculous. Can't Thanas and Stas Bush take this EU economic imperialism thread to the Flavian Amphitheatre or something? It keeps coming up over and over.

Aye, thread after fucking thread is the same bullshit back and forth over and over again.

[Thanas]

I won't say entirely, but nobody forced them to live beyond their means.

Nobody forced them, but you can't deny that the EU enabled and arguably encouraged them to live beyond their means. I'm not forcing an alcoholic to drink by buying rum for him when he's too drunk to make it to the liquor store, but I'm definitely enabling his habit. It's the exact same idea with regards to Greece and the EU; Greece has a bad habit, you guys continue to enable it. You can't cure a debt junkie with more debt any more than you can sober up an alcoholic with another bottle of rum.

I am hearing a lot of "the EU" being bandied around here. As far as I know, "the EU" did not lend any money to Greece. Private lenders from all along the globe lend money, most notably Goldman Sachs who even concocted the whole stupid scheme.

So you will admit that Europe did not force Greece to live beyond its means?

All EU periphery was living beyond their means. Greek default happened in 2007-2010, not beforehand. And in 1990-2001 Greek debt was at ~100% GDP as well. So Greece was "living beyond its means" for a very long while before it entered the EMU and did not substantially alter that ratio UNTIL Europe started fucking goats and singing bailout songs.

If you take a look at the EU commision, you'll note that they were always concerned about Greece's debt but tell me - what where they supposed to do to stop the Greeks? Or for that matter, what was the EU supposed to do? You are crying about EU Imperialism but you do not seem to realize how few weapons the EU has at its disposal. Heck, the EU cannot even stop individual member nations from reintroducing illegal border controls and you demand the EU somehow should have stopped member nations?

Greek debt was stable and even slightly decreased before the crisis years.

Are these statistics based upon the cooked books or upon the real figures?

So no, your position that "Greece is alone to blame for this" won't fly. Who the fuck LENDS amidst a financial crisis, anyway? But of course, that doesn't raise any bells. Sure.

Apparently, private lenders do. The EU does not.

Europe has to speak with one voice, sure. You just wrote that above. Explain yourself. Why is being a confederacy not enough? Because you want it to be more than that? Maybe some people don't.

Because it is the stated goal of any EU treaty and further integration has been a politcal goal since whatever. Nowhere does this imply becoming an Empire as you seem to think in your paranoid delusions.

The EMU as a whole may not have benefitted anybody. News at eleven. Sans the wealthiest nations' special interest groups - e.g. exporters when the Euro became cheaper during the recent Greek default fear, and of course the corporations which are already setting their teeth at the Greek and other weaker EU nations' assets to be given away.

You act as if this is in some way proven. All I see is empty ideological bluster on your part.

I'm not demanding that Europe do anything.

Bull. Your whole post is "The EU should have prevented greece from getting into the hole".

In fact, Europe should have let Greece and the periphery default. That's the price for your EMU. That's the price for what you have been doing the last 3 years or so. Not the last TEN years, because at that time Greece wasn't at a threat of default, neither the decade before that. They were running a close to 100% GDP debt, sure, but they also had 20 billion Euros worth of reserves.

So Europe should just have screwed the greeks even further? You seem to have a particularly rosy view about a default, where only the bad guys suffer.

Weaker nations are the EU periphery - which includes a great majority of newly ascending East European nations, and those under the threat of bankruptcy... well, PIIGS is a shit acronym, but it's correct. Latvia almost defaulted in 2009. Hungary's own government acknowleged that they cooked the books and also said they were close to defalt in mid-2010, which were BTW factors behind the neo-fascists electoral successes in Hungary. You want more?

Yes, actually. Because you somehow neglect a lot of nations in the periphery. The fact is that the vast majority of them did not default and posted very strong growth before that.

Actually, if you look above, my view is a bit wider than yours. I know about the problems of non-EMU nations as well (including Hungary and the Baltics, the latter being your "success" example - I'm curious how Latvia's near-default and bailout by the IMF with subsequent 23% unemployment is a "success", anyway).

Still does not change the fact that you have a simplistic view about the whole issue. Somehow, the EU is to blame (while of course you do not demand it does anything), the EU is also to blame for them cooking their books etc. In fact, the Eu is just as much a victim of the crisis than Greece, if not even more so because they did not lie to their partners.

**********************

This is getting a bit ridiculous. Can't Thanas and Stas Bush take this EU economic imperialism thread to the Flavian Amphitheatre or something? It keeps coming up over and over.

Aye, thread after fucking thread is the same bullshit back and forth over and over again.

I'd be willing to shut up about it if not every thread about the bailout becomes a caricature of the EU as some evil empire.

[K. A. Pital]

To those blabbering how debates about EU economic policies are not legitimate in a thread about the EU economic crisis - fuck off. Seriously. Our discussion with Thanas is neither off-topic nor useless and uninformative. If you have nothing to contribute in terms of knowledge or opinion, don't contribute anything. If you want to discuss something else in a EU economic crisis thread, sorry, we've got other threads for that.

You act as if this is in some way proven.

I haven't seen credible studies which would show substantial EMU benefits other than "easy lending". Yes, that includes benefits for core EMU nations too.

If you take a look at the EU commision, you'll note that they were always concerned about Greece's debt but tell me - what where they supposed to do to stop the Greeks?

I am not sure this is at all relevant. The average Eurozone public debt runs at 80% GDP. Italy has been running it at over 100% GDP, Belgium has been running at between 120% and 80% in pre-crisis years.

Because you somehow neglect a lot of nations in the periphery.

Which nations? On one hand, Italy, Ireland, Portugal, Spain, Greece, Hungary, Latvia. On the other side, Poland, Cyprus, Bulgaria, Romania, Slovakia, Estonia, Lithuania. A mixed blessing at best - no "vast majority of them" as you claim, that is totally false. By population, I would assume that the problematic periphery is a bit larger.

Are these statistics based upon the cooked books or upon the real figures?

Greece hid buget deficits and other shenanigans, but that was limited to the scale of their budget. It was not much more than EUR 1-2 billion. Which is not nearly enough to make a difference at the grand scale.

Apparently, private lenders do. The EU does not.

You forget that the EU threw a good trillion Euros at banks in 2008 during the bailout. Guess where that money went to? EU nations were irresponsible. All of them. Bank-saving bailout turned out to be a debt investment bonanza for greedy bankers. Europe was promptly fucked.

So Europe should just have screwed the greeks even further? You seem to have a particularly rosy view about a default, where only the bad guys suffer.

Right now the "bad guys" are just being bailed out while everyone else suffers. Whoa. How is that different from default?

In fact, the Eu is just as much a victim of the crisis than Greece, if not even more so because they did not lie to their partners.

Considering many EU nations ran 80-100% debt-to-GDP and Eurozone periphery nations listed above have been effectively bankrupted by that, yes, the EU is a victim. Of their own irresponsible, pathetic LENDING IS THE NEW GOD OF PROSPERITY attitudes. Well, not the high and mighty, certainly - mostly the ordinary people, who are royally screwed.

I'd be willing to shut up about it if not every thread about the bailout becomes a caricature of the EU as some evil empire.

The EU is not an evil empire. The EMU was a monetary union with unclear benefits for those who entered it - both developed and undeveloped alike. And disputing the beneficiality of the EMU is quite okay. As is disputing Europe's actions during the last 5, 10 or whatever years. I said it many times - those who have upheld bailout hysteria in 2008 have no right whatsoever to lecture anyone on "fiscal responsibility". And considering the excellent result of a large share of France's bailout basically ended up in Greek loans... I'm sure Europe has a lot of explaining to do. Why did they give money to private fucktard banks? Why did private fucktard banks give loans to Greece as it was effectively collapsing after 2008? France gave its banks €360 billion in bailouts in 2008. In 2008-2009, French banks issued over EUR 40 billion of loans to Greece, according to the picture above. And Greece was hardly the only periphery nation these banks were lending to. So not only a major EU nation irresponsibly and lavishly gave a lot of public money to their banks, they also failed to control where this money is going and in the end, their banks are now fucked with tons of periphery debt involvement. Excellent result there and of course accountability and big EU nation honor and justice for all. When I see Sarkozy running away from Champs Elysees for the bank bailout, then I hear you walking the walk with your own "live beyond the means!" idiots, sure. Until then - spare me your moralizing.

[Crown]

I'm no economist, which is why when all these threads have popped up my one underlining position was consistent; 'the people of Greece who are by and large innocent are gonna be fucked over royally by the same people who fucked them over in the first place'.

I present the following, Debtocracy;

I would love to get some feedback on this, particularly from Stas Bush, Thanas and J. The opinions of Stas Bush and Thanas as this appears to be the heart of their disagreement and the opinion of J in particular simply because I believe she was the first to float the idea of 'odious debt' (although not naming it as such) when bringing up Iceland as an example way back when.

Cheers.

[Irbis]

Stas, if Euro is so evil and benefits no one, care to remind us when Iceland adopted Euro that caused all their problems?

Because my poor, bad memory suggests they nearly went bankrupt on your Holy Grail, their own currency, they then begged the evil EMU to let them in, and when told it's impossible without EU, they decided to end their decades long isolationism only in order to join the Eurozone. Why, if penis Euro is EVIL, own currency GOOD?

Also, these poor, peripheral nations include both Slovakia and Slovenia, both of which adopted the Euro before the crisis and somehow haven't bankrupted or defaulted yet, despite claimed lack of benefits. Or, Malta - small, weak peripheral country with tourism being main industry - when they will be defaulting, again? How about Cyprus or Finland? Again, periphery, and yet, haven't heard about any problems there. I must investigate further, then.

You claim the Euro is somehow the cause of all evil, but the group of peripheral countries that don't have problems is actually larger than these who do, and I well remember how weak and damaging currencies Greek Drachma and Italian Lira were long before Euro was introduced - all thanks to both countries economic decisions. Maybe these are the cause of problems, not EVUL Euro?

[K. A. Pital]

Stas, if Euro is so evil and benefits no one, care to remind us when Iceland adopted Euro that caused all their problems? Because my poor, bad memory suggests they nearly went bankrupt on your Holy Grail, their own currency, they then begged the evil EMU to let them in, and when told it's impossible without EU, they decided to end their decades long isolationism only in order to join the Eurozone. Why, if penis Euro is EVIL, own currency GOOD? Also, these poor, peripheral nations include both Slovakia and Slovenia, both of which adopted the Euro before the crisis and somehow haven't bankrupted or defaulted yet, despite claimed lack of benefits. Or, Malta - small, weak peripheral country with tourism being main industry - when they will be defaulting, again? How about Cyprus or Finland? Again, periphery, and yet, haven't heard about any problems there. I must investigate further, then.

Iceland, the place whose only industry was tourism and banking and whose population was less than 1 million men? Damn right, they went almost bankrupt. I would say that by contrast, many nations which have their own currencies did not go bankrupt or even close to that. Poland, for example. And many other periphery nations who either have not adopted the Euro yet or adopted it very late (2008 to 2010), when the crisis was already on. Slovenia, Slovakia, Cyprus and Malta were all very late adopters, in 2007-2008. How could they go on a lending spree? They could not. They barely had a year or, in some cases, zero time between adoption and the crisis. Slovenia adopted the Euro Jan 1 2007, Malta and Cyprus 1 Jan 2008, and Slovakia 1 Jan 2009. None of the nations had any substantial time to go on a lending spree. Periphery is not just a geographical term; it means weaker nations, and Finland's economy has been one of the strongest in the EU and EMU alike, so the example is misplaced.

You claim the Euro is somehow the cause of all evil, but the group of peripheral countries that don't have problems is actually larger than these who do, and I well remember how weak and damaging currencies Greek Drachma and Italian Lira were long before Euro was introduced - all thanks to both countries economic decisions. Maybe these are the cause of problems, not EVUL Euro?

No, if you care to look, most early peripheral Euro adopters in the EMU have problems. Most late or none-adopters have fewer problems (with the exception of Iceland). But sure, tell me how weak and damaging the national currencies of periphery nations, such as Polish zloty, Estonian kronor, Maltese lira, etc. were to their countries. Apparently they were good enough to keep these nations in a good shape until 2007-2008 and produce no risk of sovereign default.

You don't even see how your point is actually my point? Whereas early EMU periphery adopters (Ireland - 1999, Greece - 2001, Italy - 2002, Spain - 2002, Portugal - 1999) are all experiencing major troubles and default risks.

Among late or non-adopters, Iceland, Latvia and Hungary are or were experiencing a strong default risks. The summary population of these non-adopters with problems is roughly equal to the population of just one nation - Greece. If we add the other PIIGS to the mix, the population balance for the EMU will be awfully bad.

I present the following, Debtocracy;

That... will take time to watch, but I will. I wouldn't say my position is all that different.

And let me just quote this bullshit from pre-crisis years. With lavish praise for the Greek neoliberals from our daily corporate hypercapitalist propaganda mouthpieces who drooled over their performance. The titles are blowing your mind there and then:
http://www.internationaltaxreview.com/A ... -rate.html

Greece slashes corporate tax rate
21 November 2004 The Greek government plans to introduce a wide-ranging corporate tax bill that will cut the rate of corporate tax from 35% to 25% by 2007 The Greek government plans to introduce a wide-ranging corporate tax bill that will cut the rate of corporate tax from 35% to 25% by 2007. Despite concerns over the country's yawning fiscal deficit, the parliament is expected to pass the bill at the end of November 2004. George Alogoskoufis, the Greek finance minister, announced the changes on November 10 2004, which would see tax cuts for limited liability companies, cooperatives and foreign enterprises from 35% to 32% in 2005, falling to 29%...

So corporation tax rates are lowered. Bonanza! But actually... not. However, in 2007 Wall Street Journal still thinks everything is coolio:
THE WALL STREET JOURNAL: "Europe's 'sick man' gets well --- Greece cuts deficit, keeps robust growth; a lesson for others?" - 01.02.2007

Greece was once one of the worst offenders: it lied about the size of its deficit in the years before and after its entry into the euro-zone in 2001, and did not come clean until the new government admitted the deceit in late 2004. Since then, the Greek government's finances have been under strict EU supervision. Countries including Germany, Italy and Portugal are also under EU supervision, while France has just emerged after five years.
...
"The Greece of before the Olympic games is no comparison with the Greece of today," says Sara Bertin, vice president at Moody's Investor Services. "Greece has managed a very significant turnaround. That is why Moody's put it on a positive outlook, which means that it could be upgraded within the next two years."

Greece has turned its economy around by simultaneously cutting taxes to promote growth and raising tax revenue. The additional revenue has come from both faster economic growth and a severe crackdown on widespread tax evasion.

It's an approach that EU members like Italy, Portugal and Hungary -- all above EU budget deficit limits -- are just waking up to. Italy, for example, plans to raise nearly 8 billion euros, mostly by fighting tax evasion. Many analysts believe the plan is overly optimistic, however.

Since coming to office in March 2004, Greece's center-right New Democracy government has cut tax rates on corporations from 35% three years ago, to 25% currently. This year it will begin cutting personal taxes incrementally over three years.

Excellent! But maybe not so, when you remember that this is the neoliberal triumph of TAX CUTS without any spending cuts:
http://www.asecu.gr/Seeje/issue06/katsios.pdf

Another problem with the 2004 tax cuts is that they have not been matched by government spending cuts, making the large and persistent deficits even more difficult to master.

So Greek government was hailed by corporate mouthpieces for their policies at the same time as it was ruining the fucking nation! But who, praytell, would say that tax cuts are an excellent policy? Maybe the asshole idiots in charge of Bush's economic team in the USA? No, I bring you the ECB!

Fiscal consolidation plans should be part of a structural reform agenda that favours growth, competitiveness and employment. Expenditure reforms are crucial not only for consolidation without tax increases but also for paving the way for further tax cuts and making tax-benefit systems more growth-friendly. Expenditure restraint and reform are therefore central to creating a solid ground for lasting consolidation, increased confidence and more dynamic growth, which are also the objectives of the European growth strategy. The quality of public finances is also relevant for creating a more dynamic environment. Productive investment in infrastructure and human capital needs to be prioritised over current transfer. Such fiscal strategies will also renew confidence in the institutional underpinning of EMU, thus contributing to a favourable climate for growth and macroeconomic stability in the euro area.

So the European Central Bank has been pushing the "no tax increases" and "futher TAX CUTS!" mantra in 2004, and at that time neoliberals have triumphed in almost all Euro nations. Centre-right or simply right-wing governments were everyone's favorite pets.

And what happened in the end? Utter disaster. GROWTH, GROWTH, GROWTH, TAX CUTS, CUTS, CUTS. Fucking idiots. Fucking fuck, I'm sick from reading all this feel good Eurocapitalist poo poo.

[Starglider]

Why did private fucktard banks give loans to Greece as it was effectively collapsing after 2008?

One reason is that Greece still had a relatively high credit rating. The big three rating agencies are now finally starting to do their jobs and downgrade sovereign debt (US to lose AAA status this year). Guess what, EU politicians are screaming and wailing about 'sabotage', 'unfair', 'overreaction' and requiring European banks to pay less attention to credit ratings. They are even threatening to set up their own 'EU credit rating agency' (which will automatically hand out AAAs to all EU members and be about as useful as the farcial stress tests).

The EU and ECB in particular is now pumping out a greater volume of septic propaganda than the US federal reserve, no mean feat. However no one in the markets still believes any of that 'strong recovery just around the corner' nonsense, regardless of what they might say in their fund prospectus and guidance for dumb money investors. Loans are made because the interest rates are high and because lenders know the risks are negligible, because EU politicians will always bail out everything right up until the point that the euro collapses.

'Eurocapitalist' is nonsense though. The lending was mostly to governments to waste on useless public payroll expansion, handouts and corruption, i.e. bankers doing time delayed government extortion. Most of the rest was to speculative property price bubbles. Only a tiny fraction of capital was actually invested in productive infrastructure with the intention of returning a profit from business operations. No surprise though since the regulatory and social environment in south Europe was and is still hostile to capitalist development anyway, so extortion was much easier and more profitable.

[Magis]

Iceland, the place whose only industry was tourism and banking and whose population was less than 1 million men? Damn right, they went almost bankrupt.

In 2008/2009 Icelandic fiscal year, tourism contributed 5% to Iceland's GDP. By contrast, China's tourism industry accounts for 5.4% of its GDP, so I guess they have even less industry than Iceland, huh?

Facts are our friends.

[Fingolfin_Noldor]

Iceland, the place whose only industry was tourism and banking and whose population was less than 1 million men? Damn right, they went almost bankrupt.

In 2008/2009 Icelandic fiscal year, tourism contributed 5% to Iceland's GDP. By contrast, China's tourism industry accounts for 5.4% of its GDP, so I guess they have even less industry than Iceland, huh?

Facts are our friends.

This comparison hardly makes any logical sense.

[Magis]

Iceland, the place whose only industry was tourism and banking and whose population was less than 1 million men? Damn right, they went almost bankrupt.

In 2008/2009 Icelandic fiscal year, tourism contributed 5% to Iceland's GDP. By contrast, China's tourism industry accounts for 5.4% of its GDP, so I guess they have even less industry than Iceland, huh?

Facts are our friends.

This comparison hardly makes any logical sense.

That's because I was being sarcastic. I was merely pointing out the tourism industry accounted for only 5% of Iceland's GDP, contrary to Stas' claim that tourism was Iceland's only industry. I further pointed out, by using a comparison to China, that Iceland's tourism industry, in relative terms, was even smaller than that of very-industrialed China.

[J]

I am hearing a lot of "the EU" being bandied around here. As far as I know, "the EU" did not lend any money to Greece. Private lenders from all along the globe lend money, most notably Goldman Sachs who even concocted the whole stupid scheme.

Really? Would you like to explain how the ECB owns €40 billion in sovereign Greek bonds with a nominal value of €50 billion? Furthermore, Greek banks have borrowed €91 billion from the ECB and you claim you have no knowledge of the EU lending them money. Well, now you know. Now if you want to argue that the ECB isn't the EU and blah blah woof woof whatever, well, I don't want to go there since I have neither the time nor interest to sufficiently familiarize myself with the relevant treaties.

[K. A. Pital]

Guess what, EU politicians are screaming and wailing about 'sabotage', 'unfair', 'overreaction' and requiring European banks to pay less attention to credit ratings.

Hahaha. What else is expected when you need to save capitalism? And guess what - Moodys said Greece is cool in 2007 and praised their fucking tax cuts. I just quoted them above. So rating agencies did not give a fuck about sovereign debt for a very very long time. All I can do is play the smallest violin for the idiots whose "knowledge" in effect amounted to stinky shit. And the banks were giving Greece credits (that includes the ECB) and the ECB was encouraging tax cuts and neoliberal reforms. You can't get around that.

Loans are made because the interest rates are high and because lenders know the risks are negligible, because EU politicians will always bail out everything right up until the point that the euro collapses.

So you agree with me - the European Monetary Union and the bailout practice has created and facilitated this situation where private entities effectively gamble with bailout money and get bailed out in the end anyway.

'Eurocapitalist' is nonsense though. The lending was mostly to governments

The lending was to governments after said governments threw hundreds (in case of stronger EU nations) to dozens (in case of weaker EU nations) of billions of Euros to private banks as pitiful slaves to "SAVE THE BANKS!!!" in 2008. If we're talking about Greece, that's exactly what happened.

Most of the rest was to speculative property price bubbles. Only a tiny fraction of capital was actually invested in productive infrastructure with the intention of returning a profit from business operations.

Bad debts of banks, private and state loans alike, were bailed out, so I don't see how that was a malinvestment for the bankers. They did not suffer. They just screwed everyone else over. End of story.

No surprise though since the regulatory and social environment in south Europe was and is still hostile to capitalist development anyway, so extortion was much easier and more profitable.

So you agree that the banks acted like good little poo poo capitalists and chose profitable venues among the ones provided? You're making my point for me.

[Thanas]

I am hearing a lot of "the EU" being bandied around here. As far as I know, "the EU" did not lend any money to Greece. Private lenders from all along the globe lend money, most notably Goldman Sachs who even concocted the whole stupid scheme.

Really? Would you like to explain how the ECB owns €40 billion in sovereign Greek bonds with a nominal value of €50 billion? Furthermore, Greek banks have borrowed €91 billion from the ECB and you claim you have no knowledge of the EU lending them money. Well, now you know. Now if you want to argue that the ECB isn't the EU and blah blah woof woof whatever, well, I don't want to go there since I have neither the time nor interest to sufficiently familiarize myself with the relevant treaties.

After the crisis the ECB purchased Greek bonds en masse. That does not translate to the EU lending Greece massive amounts of money before the crisis.

I haven't seen credible studies which would show substantial EMU benefits other than "easy lending". Yes, that includes benefits for core EMU nations too.

Export nations surely profited from it, by keeping the currency low.

If you take a look at the EU commision, you'll note that they were always concerned about Greece's debt but tell me - what where they supposed to do to stop the Greeks?

I am not sure this is at all relevant. The average Eurozone public debt runs at 80% GDP. Italy has been running it at over 100% GDP, Belgium has been running at between 120% and 80% in pre-crisis years.

Of course this is relevant, if you want to blame the EU for something it has no control over you have to show that this was the intention of the EU in the first place. The EU has little to no authority when it comes to forcing its members to do something.

Apparently, private lenders do. The EU does not.

You forget that the EU threw a good trillion Euros at banks in 2008 during the bailout. Guess where that money went to? EU nations were irresponsible. All of them. Bank-saving bailout turned out to be a debt investment bonanza for greedy bankers. Europe was promptly fucked.

The bank bailout was necessary because otherwise Germany's banks would go bankrupt overnight. Every single one of them. And guess what - the money is being paid back.

Right now the "bad guys" are just being bailed out while everyone else suffers. Whoa. How is that different from default?

The scale is utterly different. Right now, Greek pensioners for example still get money from the state. If Greece defaults, these may very well starve to death because they cannot purchase anything anymore. There will be massive food lines like in the 20s if Greece would collapse.

Until then - spare me your moralizing.

Ditto for you, as apparently you like seeing bread lines.

[Thanas]

Also: Link for Stas, sadly in German.

[Starglider]

Guess what, EU politicians are screaming and wailing about 'sabotage', 'unfair', 'overreaction' and requiring European banks to pay less attention to credit ratings.

Hahaha. What else is expected when you need to save capitalism?

The politicians are doing the exact opposite of saving capitalism. A fundamental tennant of capitalism is free markets, without massive government intervention picking and chosing winners, or giant corporations paying off government regulators to go after their competitors. Liberals have the idea that big business is an opponent of government regulation, but in fact they are all for any and all regulation that destroys small competitors and errects barriers to entry. Similar to church/state separation, business/state separation is vital to an advanced economy, but constantly under threat by both the selfish and the foolish.

The only silver lining in all this is that when the debt load finally exceeds the carrying capacity of Europe at a whole, various bloated and corrupt socialist governments may be outright destroyed. Although even there there's no guarantee of a better system, indeed a strong possibility of reversion to 20th century horrors.

Moodys said Greece is cool in 2007 and praised their fucking tax cuts.

I am sure they advocated both tax and spending cuts. Of course governments never, ever actually carry out the later. The unforgivable error of ratings agencies was pretending the later didn't matter.

All I can do is play the smallest violin for the idiots whose "knowledge" in effect amounted to stinky shit.

Those people don't need or want your sympathy. They were and are rolling in money and even now get endless expense account lunches with politicians and fawning from much of the press.

So you agree with me - the European Monetary Union and the bailout practice has created and facilitated this situation where private entities effectively gamble with bailout money and get bailed out in the end anyway.

Yes. I was dubious about the Euro from the start due to the glaring structural differences in the economies involved; I disagreed with the UK joining due to the differences between the UK and German economies, and the differences between Germany / France and Greece / Spain / Italy are much greater.

The lending was to governments after said governments threw hundreds (in case of stronger EU nations) to dozens (in case of weaker EU nations) of billions of Euros to private banks as pitiful slaves to "SAVE THE BANKS!!!" in 2008. If we're talking about Greece, that's exactly what happened.

Why was it so necessary to save the banks? Not to avoid losses to the citizenary, no socialist government cares about that (and of course you don't, because only rich people have savings and rich people are evil). They saved the banks because they needed the banks to continue their massive purchases of government debt. A particularly foul and sickly ouroboros that is now finally on the brink of death.

So you agree that the banks acted like good little poo poo capitalists and chose profitable venues among the ones provided? You're making my point for me.

Yes. Capitalism is founded on self-interest and giant corprations will inevitably exploit and ultimately intermingle with giant corrupt governments when they exist to be exploited. The solution is to purge, cripple or destroy both kinds of institution. The virtues of capitalism are embodied primarily in small to medium enterprises and those are the ones that deserve support.

[Fingolfin_Noldor]

The politicians are doing the exact opposite of saving capitalism. A fundamental tennant of capitalism is free markets, without massive government intervention picking and chosing winners, or giant corporations paying off government regulators to go after their competitors. Liberals have the idea that big business is an opponent of government regulation, but in fact they are all for any and all regulation that destroys small competitors and errects barriers to entry. Similar to church/state separation, business/state separation is vital to an advanced economy, but constantly under threat by both the selfish and the foolish.

That's nonsense. This crises arose because banks and othe companies did their utmost best to pay off regulators so that they can do what they fucking want which included screwing with customers. How can there be no regulation in this case?

[Starglider]

[quote="Fingolfin_Noldor"banks and othe companies did their utmost best to pay off regulators so that they can do what they fucking want which included screwing with customers.[/quote]

Yes, that's what I said, but you missed out the part where large US banks also paid off the SEC to specifically go after hedge funds that were using trading strategies that cut into bank profit margins. The fact that all parties involved are evil assholes doesn't excuse the corruption. Much worse is Monsanto and Kraft using the FDA as a club to put small food producers out of business. As I said, giant companies will block any regulation that specifically targets them, but they will encourage any regulation that they can easily comply with but which destroys smaller competitors. The EU is a perfect vehicle for this due to its massive output of pointless regulations and the low visibility and accountability of its legislators.

[Thanas]

Guess what, EU politicians are screaming and wailing about 'sabotage', 'unfair', 'overreaction' and requiring European banks to pay less attention to credit ratings.

Hahaha. What else is expected when you need to save capitalism?

The politicians are doing the exact opposite of saving capitalism.

No, they are saving US/UK style of capitalism.

A fundamental tennant of capitalism is free markets, without massive government intervention picking and chosing winners, or giant corporations paying off government regulators to go after their competitors. Liberals have the idea that big business is an opponent of government regulation, but in fact they are all for any and all regulation that destroys small competitors and errects barriers to entry. Similar to church/state separation, business/state separation is vital to an advanced economy, but constantly under threat by both the selfish and the foolish.

The only silver lining in all this is that when the debt load finally exceeds the carrying capacity of Europe at a whole, various bloated and corrupt socialist governments may be outright destroyed. Although even there there's no guarantee of a better system, indeed a strong possibility of reversion to 20th century horrors.

I have never seen such an amount of hypocrisy and sociopathy within one post.

[haard]

Just a note since Sweden and Norway were mentioned multiple times - Norway is not and never have been a member of EU or EMU. Norway are also in great shape thanks to the oil, and due to having no debts and huge savings.

Sweden is in good shape (imnsho) mainly due to fiscal responsibility and balanced budgets from before the financial crisis.

[cosmicalstorm]

Sweden does have something awfully similar to a property bubble going on. A lot of people have the idea that the price of a house or an apartment in any of the big cities can only continue to rise. If the worst come to worst within a few years, i.e. massive European economic meltdown combined with an American economic breakdown owed from the current fuck-uppery I fully expect it to burst and leave Sweden far worse off than right now.

[Starglider]

The politicians are doing the exact opposite of saving capitalism.

No, they are saving US/UK style of capitalism.

Ah, the inevitable last resort of the eurosocialist apologist, whining about the evil anglo-saxonism. If you are going to throw nationalist labels around like that then it is in fact entirely reasonable to say that the reverse is true; continential socialism has corrupted the US and UK, causing the governments of those countries to prop up and protect large 'socially important' companies, instead of allowing them to go bankrupt as they should under real capitalism.

I have never seen such an amount of hypocrisy and sociopathy within one post.

Enough with the pointless hyperbole already. SDN has had many many posters far more radical than me, although admittedly most of them aren't here any more.

[Stark]

I'm interested in the view that EU membership gave the Greek government access to better debt terms, which may have reduced the desire for any change. Is this a relevant idea, and does it change the fact that a nation crippled by corruption was a bad thing to have in the EU?

[Simon_Jester]

Yes, that's what I said, but you missed out the part where large US banks also paid off the SEC to specifically go after hedge funds that were using trading strategies that cut into bank profit margins. The fact that all parties involved are evil assholes doesn't excuse the corruption. Much worse is Monsanto and Kraft using the FDA as a club to put small food producers out of business. As I said, giant companies will block any regulation that specifically targets them, but they will encourage any regulation that they can easily comply with but which destroys smaller competitors. The EU is a perfect vehicle for this due to its massive output of pointless regulations and the low visibility and accountability of its legislators.

What capitalist systems have avoided this kind of regulatory capture? I think people are entitled to doubt whether this is anything but the normal practice of capitalism.

In the early stages, capitalist economies will be polyopolistic*, there will be intense and hopefully healthy competition, yes. But once an industry is dominated by a handful of big players who fought their way to the top, what happens next? Is the result of that any less "capitalism" than what came before it?

Capitalism runs on the profit motive- everything beneficial that large corporations are supposed to do under capitalism, they do because it makes them money. Why should we expect them to refrain from altering the rules of the game to their own advantage, if that makes them money too?

You can have a healthy capitalist economy- but it will only remain healthy as long as the tendency of large companies to start breaking the rules for profit is kept in check.
_____________________

*Maybe that's not a word, but I think you understand my meaning.