Greece can regain its sovereignty by defaulting on its debt, abandoning the ECB and the euro, and issuing its own national currency (the drachma) through its own central bank. But that would destabilize the eurozone and might end in its breakup.
Will the troika take that risk? 2015 is shaping up to be an interesting year.
Good post by Ellen, but the conclusion above is unrealistic at this point if the opposition wins the election. The Greek people overwhelmingly want to stay in the EZ, so there is as yet no popular support for withdrawing. The question is how the opposition can pressure the troika to relax austerity without raising that sledgehammer.
EU Showdown: Greece Takes on the Vampire Squid
Ellen Brown
7 comments:
I agree with your observations Tom.
The people, according to polls have no desire to leave the EZ.
On the other hand they also have no desire to continue to bow to the German diktat of continued austerity.
The two positions are incompatible and as such, something has to give?
Leaving the Euro doesn't mean they have to leave European Union. Two separate issues.
The two positions are incompatible and as such, something has to give?
Sending a confused message is not a winning strategy. Things apparently aren't yet bad enough for them, and TPTB will push them right up to the edge of the abyss to determine just how far they can go in exerting control. That's how power works in their minds.
Somebody has to propose a policy that shows mathematically how it can be possible for them to stay in the Euro AND protect the Germans from their dreaded 'inflation' at the same time...
Mike and I are starting to look into "velocity"... if they can somehow work to increase "velocity" (and this may be possible with present day IT), they may be able to stay within the 3% savings limit of the treaty, iow they can allow 3% of gdp to go into non-govt "savings" AND provide robust retirement pensions and social spending (which would have to be SPENT at high "velocity") which would discourage the savings...
iow if everyone knew they would be adequately provisioned under diverse circumstances, they would not be compelled to save in the first place and they may be able to deliver BOTH a robust economy AND low savings results ex post...
But "velocity" would have to really be cranked up....
Remember what the Lord recommended the Israelites be praying for:
"Our bread, our dole, be giving us today." Mat 6:11
"TODAY"
Not "this month", not "this quarter" but rather, this "day"... humans need to be provisioned daily...
ie the Lord is recommending to "increase the velocity by collapsing the period between xfers to a that of one day..." (not a problem with today's IT...)
What Maastrict really wants, ie a "deficit" of 3%, WE KNOW is savings of 3% of gdp... so there may be a way whereby if they increase "velocity" to a level where people feel adequately provisioned, people wont save... deficit might be able to reasonably come down to 3% or so....
This Maastrict thing does not mean they cannot increase the level of leading flow and rate of velocity to that whereby they provide robust leading Greek Euro flow at whatever rate they think will deliver the best economic results, while at the same time collapsing savings desires...
The most important rate to control is the rate of leading flow (not "the deficit") but perhaps "velocity" can also be somehow managed by fiscal authorities as well... then the resultant "savings desires" or "deficit" would fall within the Maastrict limits no problem AND they could deliver a robust economy for all over there...
rsp,
"Mike and I are starting to look into "velocity""
The financial sector is there to provide velocity.
It's sole purpose is to act as the water in the monetary salad spinner - throwing off money into the rest of the economy.
Targeting velocity means giving more power to finance.
The rest of the economy doesn't need to settle that quickly - which is why you need a government to ensure that money remains in flow at the lower velocity levels.
The way you make sure people feel adequately provisioned is to provide a state pension, state living wage job guarantee and adequate state investment.
Trying to do it any other way leads to a fallacy of composition.
The EU is a dinosaur and needs an asteroid on its head ASAP.
Ha Neil might agree but doesnt look likely at this point...
This from the wiki on velocity:
"Chart showing the log of US M2[1][2] money velocity (green), calculated by dividing nominal GDP by M2 stock,"
So here we have this "GDP" coming in here and then divided by a stock...
So seems like they are trying to gauge (as usual waaaaaaaaay ex post) some form of total xactions per unit settlement balances in the system...
So they are not looking at any type of real time measurement here... as usual...
I think if they increased top line leading flow by increasing the social guarantees and retirements, as well as increase the "velocity" of leading payments, they might be able to still get it done while only having a 3% savings rate...
Have some sort of VAT or sales tax and weekly property tax that would bring in the taxes quickly within the month... as people spent it all in the current period... some savings would be left over but it might be minimal...
But we need some sort of other measure of this "velocity" I dont think this one here that is the typical one you read about is going to help understand what is going on in real time...
If you look at that equation above and use this "M2" then some of that could easily be savings and then your "velocity" looks lower than it really is and GDP is used by morons in the first place...
We might want to come up with some other measure of the "velocity" we are talking about...
rsp,
Silvio Gesell had a suggestion about how to increase velocity, and back then Europe was also a turmoil just before WWI and the second part. It's true recirculation can help (which is what money velocity shows), being money the blood of the economy and you need blood to circulate or the organism will collapse.
More practical measures should be taken and with the modern system we got we can do other things than Gesell suggested. But a practical takeover is that we need two currencies at least. There was an Italian policy suggestion, can't remember the name, that had the numbers showing what was needed to kickstart the Italian economy witha 'de-facto' parallel currency. It was inspired by MMT I believe.
The EU is not good though with it's current structure and many people is starting to understand that, is a venue for corporate and banker lackeys, not much more. You may suggest that they are the equivalents of Alexandor Hamilton back then, but Hamilton still had to operate under the pressure of a real democratic system (with it's radicals and all), the eurocrats can roam free doing whatever they want creating chaos for IDK... probably 900 mill people (not just the EU, but every freaking country in this region of the world including N.Africa and ME).
I want a EU but a real democratic and political EU not this joke of "free-market hard-money neoliberals everywhere" in Brussels and Frankfurt that are now indirectly instigating wars and terrorism and if we let them long enough be in power will do the same on the continent (we may soon have a civil wars against muslims at this rate because their idiocy in several countries in Europe).
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