mercoledì 8 luglio 2015

Greece vs Germany: a question of mutual bad faith

The Greek debacle over the Euro is now an issue of mutual bad faith between germany and the Greeks. Which bad faith do you prefer?

1. Goldman Sachs did help Greece to craft the accounts before the entrance in the Euro and got in exchange some hefty fees. Heard any international outrage against GS? http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs-helped-greece-to-mask-its-true-debt-a-676634.html Good faith or bad faith? 

2. Where were all the PhDs running Europe when Greece asked to enter the Euro and they had fiddled with their figures? Good faith or bad faith? 

3. Germany and France had to save their banks (in fact, those were the institutions holding most of the international credits towards Greece (predominately private debt). Question: why were they lending to Greeks if they are such geniuses that know that Greeks (households not governments) could not repay? The cheap interest rates resulting from the extension of the Euro substituting the Drachma, where too much of a good thing for Greek households to miss but bankers should have known better!  Good faith or bad faith? 

4. The international fund set up to “save Greece” saved German and French banks (Open question: who asked them to give cheap loans to the Greeks as soon as Greece entered the Euro? With this fund, all countries now share the burden of a private French and German problem. Granted that as a midterm effect these funds serve the purposes of saving Spain, Portugal and Italy but as a short term effect they saved the banks above mentioned). Good faith or bad faith?   

5. Merkel and Sarkozy (Germany and France) kept selling weapons to Greece in the mist of the crisis (was corruption involved?) and Greece has one of the highest military spending over GDP in Europe. Were they trading international loans (to repay their banks anyway) with trade on things they produce? Fantastic were the news when Germany sold Greece submarines that were deemed not “seaworthy” (heard of that on the press?) http://www.telegraph.co.uk/news/worldnews/10895239/Greece-sues-for-7-billion-euros-over-German-submarines-that-have-never-sailed.html Good faith or bad faith? 

6. German company Siemens and the corruption scandal over the Greek Olympics? https://en.wikipedia.org/wiki/Siemens_Greek_bribery_scandal Good faith or bad faith? 

7. Germany is running a surplus (as opposed to the deficit that most European government have). Do people know that running such a high surplus is a breach of the European treaties? I am not kidding, by the treaties created to have a balanced trade within the EU, you are breaching them if you have a high deficit but also if you do not spend the money to make the economy run (aka, if you hold an excessive surplus). Anybody noticing that? Good faith or bad faith?

8. The ruling left party, Syriza, did not cause the debt but their response to the international community is based on a ton of lies as exposed here: http://www.vox.com/2015/6/30/8868363/greece-crisis-default-austerity Good faith or bad faith? 

9. Back in 2010 the crisis could have been solved (essentially by Germany) with maybe a €100 bn loan (and then imposing whatever reforms you wanted). Germany refused and the crises mounted given the pseudo religious approach Ms Merkel has on the all thing “let them suffer so they learn”. It has now costed the European economies what? 1500, 2000 bn$? Plus the instability and all we read on the press… You cannot impose unlimited austerity to people who do not see a tangible recovery in sight (to be fair it did work in Ireland but Greece is a pre-industrial economy so you cannot expect much. If you have to spend, better to spend less anyway. No?). Good faith or bad faith? 

10. As much as we can agree that tax evasion is a problem and the State does not fully function in Greece, today hospitals in Greece do not have medicines and several social services are really depleted and the most vulnerable parts of the society are suffering. As a European citizen I do not want to be part of this game vs the common people of Greece. Definitely good faith. 

Net net: both parties are indeed in bad faith for a variety of reasons. The solution is totally an uncharted territory and I do not have one to suggest. I can only check multiple sources and try to have an informed opinion. 

Check also some charts here 
Intervista a Yanis Varoufakis nell'estate 2014

1 commento:

  1. Vero! Lo dice anche Alberto Alesina sul Corriere! http://www.corriere.it/editoriali/15_luglio_03/grecia-danno-non-visto-af7ca044-2141-11e5-be97-5cd583b309bb.shtml

    RispondiElimina

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