Senate Greek politics thread

I didn't say you were an occupying power. The hell?

The main architect of the relief granted to Germany in 1953 was the US. But it was the shared interests of the US, UK and France to alleviate German debt for economic and political reasons; they were also responsible for the rebuilding of Germany as occupying powers. I understand Greece forwent debt, but occupying power?!

Germany benefitted twice that I can recall from bailouts, both after wars they started. Critically though it was through those periods of barbaric aggression that they racked up debt. They were also able to engineer strong economic performance since and as a result could absorb the East in 1989 without a total meltdown.

The Economist noted that, due to the mismanagement we've already spoken of, Greece spent significant time in default. That's all.

We all agree debt restructures are a good thing; I think where we disagree is the extent to which the Germans are in the wrong.

 

A more skeptical take. Basically calling on an agreement sooner than later lest the far right continues to gain. Sounds like austerity has given the greek electorate almost no choice but to vote SYRIZA into power.

In the Greek case, backers of the incumbent New Democracy party and its austerity policies constitute that quarter of the electorate who still have assets (pensions, paper, and portfolios) after five years of depression and who want to preserve what they have. The 36 percent that voted for Syriza were the young, the asset-less, and the unemployed—people who either lost what they once had or never had much to begin with. Greece’s 1.9 percent of growth last year means essentially nothing to a society that has lost nearly 30 percent of GDP in a little over half a decade; on the current course, it would take, by latest estimates, two generations for the country to get back above water.


http://www.foreignaffairs.com/artic...d-cornel-ban/austerity-vs-democracy-in-greece

 

German defaults/debt restructurings/periods of non-payment in the 20th century: 1923, 1932, 1953, 1990 (have a look for details here: Economic Historian: 'Germany Was Biggest Debt Transgressor of 20th Century' from a German historian in a German newspaper, no less).

I take it that The Economist gave you all the details of Greece spending most of its modern history in default? In case it didn't, the last Greek default was in 1932 (and it had nothing to do with invading, destroying and exterminating the population of the countries that were asked to provide debt relief). EDIT: I'm not counting of course the Greek default of 1944, since it was under Nazi occupation.

Now to answer your question. An aspect of Greek history you may want to look at is how democratic and independent Greece has been since it became a recognised state after 1830. The answer is "not very much" (both in terms of democracy and independence), and that (as opposed to capitalism or lack thereof) is a key reason for rampant corruption, mismanagement, cronyism, etc. Another thing the nice, pale yellow countries from the Transparency International map have in common is that they are all healthy and independent democracies with robust institutions. Greece is not and has never been one. But I don't think that this sort of thing matters to that Economist writer (and I'm venting against him right now, not against you -- I remember saying a few days back that coverage of the Greek crisis is a case study in bad journalism, and the article you posted is a textbook example of that.)

From the article Shane posted, this is the most important thing:

(emphasis -- obviously -- mine)

 

Chyntuck No, it's not just you but the two author's drive of the whole piece: better to strike a deal with SYRIZA now that lessens the burden for the greeks or suffer the continued rise of the far right.

 

Default does not equal running deficits and being in debt, Chyntuck. That might be where you're getting confused. Defaulting is being unable to service debt obligations.

 

hey guys a libertarian murdered someone so we need to arrest Gary Johnson.

 

I don't think that I'm confused at all. You chose to quote an article that says "Greece has a long record of debt problems with around half of its history as an independent nation spent in default" while failing to mention that it's the first half of the history of the Greek state they're talking about. The least that I can say about phrasing the argument that way is that it's deliberately misleading -- or ignorant, but in any case it's a fallacious argument. Oh well. At least he didn't go for the default of some city-state in 377 BCE.

If we want to talk about more recent history (which I think would make sense), then let's drop the Economist article and discuss the real issues: when did Greece start borrowing beyond its means, where did the money go, who lent it to Greece, who benefitted from it, was the process transparent, etc. These are all issues of democracy, because when the electorate is kept in the dark, they can't make sound decisions (and this applies as well to the electorate of creditor countries, who were never informed properly of what their governments were getting them into.)

And most importantly, as ShaneP noted, the real question is what political forces are gaining from this, and what it means not only for Greece but also for Europe. For me the most worrying thing over the past five years is not the risk that we might leave the euro and lose our savings (not that we have any savings left), nor is it that we have the Nazis sitting in parliament. It's that we have the Nazis sitting in parliament both in Athens and in Brussels, and nobody seems to mind.

 

Wait, who is not on board with debt reduction, Chyntuck? We seem to agree in principle, the difference is I would argue Greece is more responsible for its woes than anyone else.

 

Everything I've read about Greece is that they turned tax dodging into a national sport and they also have a retirement age of 50 with full benefits. What did they think was going to happen with that system? So they want the benefits of modern civilization but without any of the responsibility and then expect Germany just to eat their debt because of their failures to maintain an economy and fudging their numbers to join the EU in the first place.

 

Cool soundbites, bro.

I've been wondering where that tedious "tax (evasion|dodging) is a national (pastime|sport)" bromide came from, so I did a cursory Googling. It's been widely applied across Europe and elsewhere (India, Latin America, etc.) for at least a decade, probably longer.

Most amusingly, guess what other country's citizenry avoids taxes as a part of their national pastime, according to The Economist?

 

I believe a few frustrated former Greek ministers have referred it to it as a national pasttime, Follower. But yes, any nation with a tax code will have provisions for avoidance (Part 4A in Australia - sad I know that).

Where Greece gets extra attention, and may warrant it, is the scope and scale of the avoidance, and the duration.

(Also, FIDO, retirement age in Greece is 61. Germany just moves theirs to 67 from 65).

Still, this piece sheds some light: http://www.economist.com/blogs/charlemagne/2010/02/greeces_generous_pensions

Greek civil servants retire after 35 years of service on a pension which is 80% of salary. German public servants retire after 40 years service with 70% salary as pension.

This quote was interesting:

It is not only that our EU partners are angry about our lying to them (and to ourselves) about the state of our finances, nor is it only that they will have to help us politically or economically (or both), but there is also the rather damning fact that in many aspects the Greeks enjoy a more privileged life than their German partners in the EU. Through all this borrowing, Greek salaries and pensions rose far above (about 30 percent) Greek productivity. This means that even if salaries in many cases (though not all) were still lower than the German equivalent, pensions were higher, and usually paid at an earlier age. So there is no longer a feeling of the richer EU countries helping their poorer partners – Greece's mess comes across as exploitation of the underprivileged by the pampered

This comes from an English supplement to the Greek daily Kathimerini.

Note, the Economist is using this highlight part of the perception gap from in- and outside Greece. The truth of the matter is probably that in part some of the above is true, but also Greek citizens have been made to appear to benefit from insanely generous pensions, high income and low cost living but in reality there's been systemic rot and corruption that Greek people are being de facto held accountable for now.

If I am correct, and Greek citizens have been made to wear austerity because of poor governance in Greece (accounting for a myriad of issues) then I think the turn to Syriza is a natural thing. But the proposals put forward by Syriza were remarkably mature and possibly out of line with voter expectation. It will remain to be seen if Syriza can implement actual structural reform and help rescue Greece. I do hope they can.

 

Err, no. 61 was the average actual retirement age in 2009, including people who choose to retire early on reduced benefits (to be precise, it was 61.9, while Germany's was 61.7). The official retirement age for full benefits was 65 before the crisis and was increased to 67 in 2012. And as I said in an earlier post, the average Greek pension in 2009 was €617/month, i.e. 55% of the Eurozone average

I said it before, I'm saying it again: news coverage of Greece was and is still based on data that was at best the selective, apples-and-oranges type, and sometimes just faulty or even entirely made up.

You want to be very careful with information from Kathimerini or any Greek media outlet for that matter. With very few exceptions, they are notoriously unreliable and are owned by oligarchs who came up with the most ridiculous figures to support austerity. For instance, in the beginning of the crisis, Kathimerini claimed that there were 1.5 million civil servants in Greece because they counted everyone who earns money from the state one way or another, up to and including young men who were doing their compulsory military service (another, not crisis-related but hilarious instance of made-up reporting was when To Vima published a double page about Erdogan's visit to Athens, complete with details of his talks with Papandreou, when Erdogan had never come.) With regard to the quote above, every possible indicator available from Eurostat or the OECD -- earnings, working hours, paid leave, pensions, cost of living, purchasing power, etc -- proves that "Greeks enjoy a more privileged life than their German partners" is a blatant lie.

The one little piece of truth in there is that yes, salaries and pensions rose far above productivity -- but also far below price hikes for basic goods and services, so in reality purchasing power collapsed. If those pay rises hadn't happened, by the mid-2000s you would have had African levels of poverty in Greece -- which in a sense would have been a good thing, because this whole euro masquerade would have fallen apart much earlier.

An important problem with the sorry state of the Greek media is the knock-on effect it had on international coverage of Greece. Greece is ranked 99th of 180 countries in the RSF press freedom index behind countries renowned for their healthy democratic regimes such as Mauritania, Northern Cyprus and Kenya, so you'd think that this would be a strong indication to foreign journos that the Greek media is unreliable, but no. Because foreign journalists don't speak Greek, they borrow information from the few English-language media outlets we have here without double-checking their data, and if you combine that with a knack for sensationalist reporting like in the Vanity Fair piece Darth Punk quoted, it leads to articles so ludicrous that I simply can't understand how anyone would believe them.

Another pet peeve of mine when it comes to foreign media coverage of Greece is how they accept everything (former) government ministers say as truth. For instance, the figures quoted by Stephanos Manos in the Vanity Fair paper are entirely made up and were debunked ages ago (the train company OSE ran a small deficit in the 2000s, it's now a profit-making company and OSE employee salaries are in line with civil servant salaries, nothing to do with €65,000/year), but Manos keeps repeating them and international media keep printing them.

And then, Papaconstantinou -- wow, just wow. Okay, Vanity Fair couldn't know that back in 2010, but when listening to Papaconstantinou talk about tax evasion, you want to remember that we're talking about the man who is now on trial for covering up the Lagarde list (a list of wealthy Greeks with large deposits in Swiss banks, who are suspected of tax evasion) and, when public pressure forced him to release it, he deleted the names of his relatives from the list. Oh, and there's also a smaller court case against him for his family holiday home, that was built without a construction permit in a protected forest and for which he failed to pay tax.

So yeah, Greek government ministers so far... Trusting what they say is about as ridiculous as trusting Mobutu when he said there was no corruption in Zaire.

Amen to that.

 

On the Greeks and tax dodging, if you've ever been there (I honeymooned on Santorini, and also vacationed on Rhodes once) one of the first things that strikes you is that almost every house is not completely finished. As I understand it (and @Chyntuk, please correct me if I'm wrong), this is because a tax becomes due once construction is completed. So to avoid the tax, just leave a few relatively minor details incomplete and the tax man will never bother you.

 

You're partly right. It used to be the case that if your house was still under construction, you wouldn't pay property tax on it (and given the notorious corruption of the urban planning administration, the definition of "under construction" could vary pretty wildly), but that law was changed some 10 years ago to replace "under construction" with "uninhabitable", so if you completed only the ground floor and can connect private consumer electricity and water to live in it, then you have to pay full tax.

 

Yeah, I remember that one. I was never able to verify if the turf-coloured covers story is true, but that's totally something a creative Greek entrepreneur would do Buuuut. There's a juicy bit missing in your sentence. The Ministry of Finance (the troika didn't exist yet when the swimming pool thing happened) wasn't using Google Earth. They spent instead insane amounts of money to create their own (overpriced) satellite imagery software. Needless to say that the company that made the software was owned by a relative of some government minister.

I just heard on the radio that the former Siemens financial director committed suicide. Siemens is involved in one of the biggest corruption and bribery scandals in Greece and was mentioned in the joint Varoufakis-Schäuble press conference yesterday when a journalist asked about the shady deals secured by German companies in Greece, so the timing is interesting.

 

You know that you have spend to mush time on a SW forum when the first thing you think of when you see YV is Yuuzhan Vong.

 

Some political humor:

 

they should just grexit. i mean it's going to be really awful for a while, but the current situation is completely ridiculous. there is no other way out.