Furthermore, the idea of needing to overhaul things at a global level makes many assumptions. For example, that anyone has the authority and intelligence to tell the entire world how it should function.
Meanwhile, Schäuble's policy of Austerity über Alles mean the Greek government has been forced to abandon policies that might've rebooted the economy, and be forced to cut spending in hopes that the "confidence fairy" shows up. Even the IMF has said this policy is stupid...
First I've heard of this, but I haven't been following it. It sounds quite far-fetched though. I must be missing something.
The current measures are beyond stupid. They've crippled the country's economy, shut down a large majority of businesses, made the climate hostile to new businesses, and generally ensured that the country doesn't recover.
I don't think we've still seen the worst of it, because the economy has shut down almost completely, and it's still getting worse. The effect of this much deterioration on such a large system will take years to show, and what we're seeing now are the results of policies five years ago.
I'm pretty confident it will get even worse in the next half-decade. Very much to blame for this is the leftist mindset of the average Greek, who thinks "bosses are the devil" and that making the country friendlier to entrepreneurship and investments is anathema.
At the end of the day, it's the banks' job to assess risk, they lent money to Greece, and they're only getting paid because of this bailout. What's greece paying in interest, again? Some kind of huge risk premium, probably?
> First I've heard of this
I suggest listening[1] to Yanis Varoufakis talk about his negotiations with the rest of the EU's finance ministers. He talks about the rigged process, and the ultimatum they gave him when he pushed for a saner refinancing plan. Schäuble's response, according to Mr. Varoufakis, was "Elections cannot be allowed to change the economic policies applied to Greece!"
For background on how this situation was created, see Mark Blyth's very nice discussion[2] of the Greek situation and how it fits in with the larger Euro problem.
- The Euro hid huge debts in the same way securitised debt did in US. People would lend (via bonds) to risky countries (Greece and Spain) at the same EuroBond rate they lent to less risky countries (Germany, and well just Germany).
And Greece took this and spent - at first on good infrastructure but slowly on low performing roads to nowhere and a lot on non capital spending (social welfare) And particular Greek social Problems made it far worse (a political class removed from the populace, etc)
As the crisis hit Greece could not repay these huge debts and could not devalue their currency (the Euro was not theirs). And they got loans from Germany (cos a lot of German banks owned the A rated bonds) and paid interest with the loans thus doing nothing to solve the problem. After a few years of this the Greek people voted in a whole new radical party. The goal was to cancel the impossible to pay debt and follow sensible Keynesian rebuilding. The cancelling of the debt (spearheaded by charismatic economist Yanis Varoufakis) was not insane but it would mean all other countries in similar problems would also follow suit. So the Big players in Euro (Schable being the biggest) opposed it everyway they could. The Greeks took it to the brink but the PM could not plunge Greece into leaving the Euro and not being able to keep hospitals open backed down
No solution - and we end up here
The EU was sort of a beta version of a United Europe. They weren't as luck as the U.S., where a highly educated but small group of people tried to come up with the simplest thing they could that wouldn't fail. Instead it looks like quite a bit of architecture astronaut syndrome going on. If I'm right, and I'm just a passerby, the sooner they start down the road to refactoring the better it will be for everybody.
pretty much
> architecture astronaut syndrome
Not really. It started well. The Euro currency was the great achilles heel, as it meant there MUST be fiscal harmonisation between countries that were arguing over the amount of meat in a sausage. That said the more I learn about USA and the states, especially the southern states, the more I realise we need things like TIPP and TPP and the WTO. The states generally hate being in a federal system.
I would try and listen to Yanis Varoufakis stuff online. (https://yanisvaroufakis.eu/ is his blog but there is a lot there with little organisation)
Is in favour of defeating Pikkety with UBI:
https://www.project-syndicate.org/commentary/basic-income-fu...
The current Greek government doesn't seem to want anything other than line their pockets. They've gone back on every single big promise they made before getting elected, and are spreading lies and propaganda to try and keep their positions, even while being wildly unpopular.
The entire system is fucked, and I would consider booting everyone out of the parliament and becoming an EU protectorate a better option for the future of Greece, austerity or no austerity.
More than 90% of the bailout money went to banks, not to Greece. Bank recapitalization via the back door while blaming Greece.
Well, they saved me by forcing me out of the country, so +1 there.
But the parent comment alleges a breakdown of the international system meriting, as I read it, global revolution. Given that we're in something of a golden age of humanity--what with record-low rates of per-capita violent-death rates, relative economic prosperity and technological advantage--the claim needs more than a First World country experiencing hardships around paying property taxes.
It's the way our system works - I want avocados now, even though I'm thousands km away from an avocado tree. One solution would be for me to give up on the avocado, but then the world needs me to buy it, otherwise the balance of avocados in the economy will move and the futures will go down and everyone panics and now maybe I will say no to mangos too ... sell, sell, sell!
This is how it works - not because someone conceptualised, thought through the whole complexity - it just ended up being like this..
> For example, that anyone has the authority and intelligence to tell the entire world how it should function.
I'm not getting my hopes too high for a global change - in fact I think this can't happen without some sort of global crisis or conflict preceding it.
It's very easy to see that the system is broken - much harder to fix it of course.
I would like to push back on one point of the top though, I don't think the world is so locked in to the consumption of a small nation or any small population. Indeed, panic would happen if America banned imports. But if many in Greece had to take a step back and dramatically reduce their IPhone consumption until they invented new ways to add value, I doubt anyone would notice. The panic of a Greek default seemed to more step from the many who invested there without expecting a collapse. Even now I think a Greek default would be pretty non-eventful given how much warning time everyone had. (Debt defaults of small countries being relatively common)
There is no self determination possible for Greece
Bingo! Greece can do whatever it wants. If they want to stay in the Euro, then they can stay in the Euro but have to follow certain guidelines. If they want to do what they want to do then they can leave the Euro, but they should not complain when their overspending ways catch up to them and it all falls apart.
"Elections change nothing. There are rules." -- Wolfgang Schäuble (in reference to the election of a Greek government in 2015)
[Well, in a way, they are free to do so -- at the risk of losing every bit of credibility as a debtor... What Schäuble pointed out is: if you want more money, respect your obligations]
> at the risk of losing every bit of credibility as a debtor
This mentality about debtor and creditor nations within the EU will eventually destroy the Euro.