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However, EC President Juncker has stated earlier during the week that they´ve got ready a concrete and detailed plan for Grexit - and Germany is (apparently) now proposing a Grexit fully coordinated with the creditors plus debt restructuring.
Let's not fall into panic mongering. A blueprint for Grexit, coordinated and implemented by all the interested parties (ECB, Bank of Greece, commercial banks, EU governments, etc.), can perhaps be put in place relatively fast, while minimizing the short term negative impacts on the population.
And a Grexit is much preferable to the alternative now on the table: staying in the eurozone with an extra dose of crushing, humiliating austerity - while keeping capital controls in place that would mean, in practice, a second tier membership at most.
Tsipras is going to lose the game if he doesn't do It. They seem to look at another dimension in it. It is isolation and nationalism, end to the European project. It doesn't have to be this way. This coin has two sides, It is not only Greek voters, it is German voters too, both sides are wrong in their own way. Euro cannot work as intended, as they imagined It would work. I just don't understand the Varoufakis's article that Tom posted. This is not going to work and he knows It. All the left is saying that he is such a smart economist, what is he hoping for? A miracle? Greek see Grexit as a humiliation, yet they humiliate themselves by continuing doing the same thing over and over. People in Northern states are talking about them as lazy cheaters. How is this helping the European project? And if Varoufakis and all the anti Grexit crowd is saying that Greece is so dependent on imports and this is going to be catastrophe then this means they want to live on German exports, and they want the Germans to finance them. Anti Grexit arguments are not rational in economical sens, they are emotional.
As William Hague says in the Telegraph article I just put up, the EZ is unworkable as he said at the time of its inception. Nicholas Kaldor said it in 1971. See the link I also put up. Wynne Godley also said it when Hague did, which was linked to here at MNE also. Bill Mitchell has written extensively about it. Brian has a review today.
The EZ is a dead man walking, and in the EU looks shaky too with a likely Brexit. Its' just a matter of time now. It was a stupid idea that was designed to fail right out of the box.
It cannot be long until Tsipras and Syriza falls, can it?
[earlier today from the Guardian]
While Greece’s fate was being debated in Brussels, in Athens the ruling radical left Syriza party was exhibiting signs of disintegration. Demands that the controversial reforms be approved by the Greek government and enacted into law by Wednesday were described as “utter blackmail” by leading party members and met with stunned disbelief.
Although sources close to prime minister Alexis Tsipras said the leader was now determined to do whatever was needed to keep Grexit at bay, political tumult also beckoned. Insiders conceded that a cabinet reshuffle – removing those ministers who had refused to vote the austerity package through parliament early Saturday – could come as early as Monday.
“What is sure is that we are going to have dramatic political developments,” said Nikos Bistis, a veteran politician from the centre left. “Basically Syriza is now split in two.”
By late Sunday it had become clear Tsipras’ u-turn, accepting measures he had once furiously spurned, had produced a tectonic split with potentially far-reaching consequences. In addition to suffering an unexpected loss of support with 17 MPs breaking ranks at the weekend – defections that strip his government of a working majority – 15 other lawmakers also indicated that they would not approve the agreement in its entirety when it was brought to the 300-seat House.
The MPs, who included two ministers, said they were radically opposed to endorsing an austerity programme that was not only ideologically at odds with their own beliefs but would exacerbate “the country’s agonising and tragic social economic problems.”
The resistance raises the spectre of Tsipras being forced to call fresh elections – a move described as potentially catastrophic for the country.
The basis for the "lack of preparation" story is that the Greek government did not call up banks to see how they would prepare. If the government wanted to do actual preparations, the banks would be the last group I would talk to. The news would be front run by the banks almost immediately.
Anyways, all you can do in the short run is impose capital controls, and/or restructure the banks. That's not something the banks will offer any useful insight on. As for the issue of distributing new currency, that is going to be relatively slow, but there is no way you are going to keep the news under wraps if you started discussing that problem openly. The result is that ATMs may not be available for some time, but people managed to have functioning economies without ATMs until the 1980s. In any event, the Greeks have not had fully functioning ATMs for awhile already.
One has to take NC with larger grains of salt. These days it is very biased on this issue & says things like "Calorie consumption in Greece has already fallen by 30% since austerity started" with no source, and none that I can discover.
The important preparation is of course real, not financial. Dimitris Stratoulis suggested a couple of weeks ago that the government had made preparations for Grexit. The government Greece's Yanis Varoufakis prepares for economic siege as companies issue private currencies - and households stockpiling food - causing recent shortages, but also increasing imports - have prepared some. Enough?
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However, EC President Juncker has stated earlier during the week that they´ve got ready a concrete and detailed plan for Grexit - and Germany is (apparently) now proposing a Grexit fully coordinated with the creditors plus debt restructuring.
Let's not fall into panic mongering. A blueprint for Grexit, coordinated and implemented by all the interested parties (ECB, Bank of Greece, commercial banks, EU governments, etc.), can perhaps be put in place relatively fast, while minimizing the short term negative impacts on the population.
And a Grexit is much preferable to the alternative now on the table: staying in the eurozone with an extra dose of crushing, humiliating austerity - while keeping capital controls in place that would mean, in practice, a second tier membership at most.
Tsipras is going to lose the game if he doesn't do It. They seem to look at another dimension in it. It is isolation and nationalism, end to the European project. It doesn't have to be this way. This coin has two sides, It is not only Greek voters, it is German voters too, both sides are wrong in their own way. Euro cannot work as intended, as they imagined It would work. I just don't understand the Varoufakis's article that Tom posted. This is not going to work and he knows It. All the left is saying that he is such a smart economist, what is he hoping for? A miracle? Greek see Grexit as a humiliation, yet they humiliate themselves by continuing doing the same thing over and over. People in Northern states are talking about them as lazy cheaters. How is this helping the European project? And if Varoufakis and all the anti Grexit crowd is saying that Greece is so dependent on imports and this is going to be catastrophe then this means they want to live on German exports, and they want the Germans to finance them. Anti Grexit arguments are not rational in economical sens, they are emotional.
As William Hague says in the Telegraph article I just put up, the EZ is unworkable as he said at the time of its inception. Nicholas Kaldor said it in 1971. See the link I also put up. Wynne Godley also said it when Hague did, which was linked to here at MNE also. Bill Mitchell has written extensively about it. Brian has a review today.
The EZ is a dead man walking, and in the EU looks shaky too with a likely Brexit. Its' just a matter of time now. It was a stupid idea that was designed to fail right out of the box.
It cannot be long until Tsipras and Syriza falls, can it?
[earlier today from the Guardian]
While Greece’s fate was being debated in Brussels, in Athens the ruling radical left Syriza party was exhibiting signs of disintegration. Demands that the controversial reforms be approved by the Greek government and enacted into law by Wednesday were described as “utter blackmail” by leading party members and met with stunned disbelief.
Although sources close to prime minister Alexis Tsipras said the leader was now determined to do whatever was needed to keep Grexit at bay, political tumult also beckoned. Insiders conceded that a cabinet reshuffle – removing those ministers who had refused to vote the austerity package through parliament early Saturday – could come as early as Monday.
“What is sure is that we are going to have dramatic political developments,” said Nikos Bistis, a veteran politician from the centre left. “Basically Syriza is now split in two.”
By late Sunday it had become clear Tsipras’ u-turn, accepting measures he had once furiously spurned, had produced a tectonic split with potentially far-reaching consequences. In addition to suffering an unexpected loss of support with 17 MPs breaking ranks at the weekend – defections that strip his government of a working majority – 15 other lawmakers also indicated that they would not approve the agreement in its entirety when it was brought to the 300-seat House.
The MPs, who included two ministers, said they were radically opposed to endorsing an austerity programme that was not only ideologically at odds with their own beliefs but would exacerbate “the country’s agonising and tragic social economic problems.”
The resistance raises the spectre of Tsipras being forced to call fresh elections – a move described as potentially catastrophic for the country.
The basis for the "lack of preparation" story is that the Greek government did not call up banks to see how they would prepare. If the government wanted to do actual preparations, the banks would be the last group I would talk to. The news would be front run by the banks almost immediately.
Anyways, all you can do in the short run is impose capital controls, and/or restructure the banks. That's not something the banks will offer any useful insight on. As for the issue of distributing new currency, that is going to be relatively slow, but there is no way you are going to keep the news under wraps if you started discussing that problem openly. The result is that ATMs may not be available for some time, but people managed to have functioning economies without ATMs until the 1980s. In any event, the Greeks have not had fully functioning ATMs for awhile already.
One has to take NC with larger grains of salt. These days it is very biased on this issue & says things like "Calorie consumption in Greece has already fallen by 30% since austerity started" with no source, and none that I can discover.
The important preparation is of course real, not financial. Dimitris Stratoulis suggested a couple of weeks ago that the government had made preparations for Grexit. The government Greece's Yanis Varoufakis prepares for economic siege as companies issue private currencies - and households stockpiling food - causing recent shortages, but also increasing imports - have prepared some. Enough?
Following Bill Mitchell's recent blog post we learn that the EUrophiles at NC are fond of censorship. What a surprise.
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