Syriza has reintroduced the concept of democracy...

[Zerο]

Good. An exit should be better for everyone involved.

[Indiana Joe]

I'm still not certain of an exit. The IMF has come to reason. The ECB can see the writing on the wall and that writing says "Next up: Spain" (which makes everyone want to crap their pants) so liquidity might be more forthcoming than we all thought. The EC can now be more pragmatic and save face by acknowledging the magnitude of the "NO" vote and the renewed mandate of the negotiators.

If I were the Greeks and the EC I would step back for a moment and let the forces which have signalled a willingness to come to terms reopen the conversation. I have a hunch that that's exactly what Merkel will be talking about in Paris on Monday.

[Zerο]

I'm still not certain of an exit. The IMF has come to reason. The ECB can see the writing on the wall and that writing says "Next up: Spain" (which makes everyone want to crap their pants) so liquidity might be more forthcoming than we all thought. The EC can now be more pragmatic and save face by acknowledging the magnitude of the "NO" vote and the renewed mandate of the negotiators.

If I were the Greeks and the EC I would step back for a moment and let the forces which have signalled a willingness to come to terms reopen the conversation. I have a hunch that that's exactly what Merkel will be talking about in Paris on Monday.

At this point, it's not just the terms of the bailout that are in question however. There's no more goodwill, the rest of the EU doesn't trust Syriza to carry out any reforms (just as those before them failed to). It's really a matter of what's the least costly option, and given that Spain has one of the higher growth rates in the EU after its bailout, I'm thinking Greece will be left to its own devices. Germany's Finance Minister wanted Greece to leave back in 2012, when it would have been even riskier.

More than anything, Merkel will be concerned about maintaining power and I just can't imagine Germans reacting well to another Greek bailout. I think people are overestimating the value of the "No" vote as well. We already knew that Greeks were against austerity measures, we just didn't know how strong they felt about it when faced with a Euro exist (and I'm not convinced they still comprehend the reality of the situation given how hastily put together the referendum and sloppily framed the question was).

I'm mostly curious about whether the EU will help Greece make a smooth exit, or let its banking sector collapse.

[Bad_Mr_Tree]

That should be clear when the ECB meets today.

Personally, I think that any "capital" this referendum has given the Greek leadership at the negotiation table will be bled away by eurocrat bureaucracy.

The fact that a "radical left" government was trotting out an IMF publication as a vindication of its policies, is telling.

If the Greek people want any semblance of democracy, they need to break with the technocratic institution of the EU. This will come at a high cost, time will show how much they are willing to pay for it.

The bigger and far more interesting question is how many others in Europe will join them on their journey and when?

[Vestal]

Yanis Varoufakis Abruptly Resigns as Greek Finance Minister: http://www.nytimes.com/2015/07/07/business/international/yanis-varoufakis-abruptly-resigns-as-greek-finance-minister.html?partner=rss&emc=rss&_r=0

"Minister No More!" by Yanis Varoufakis: http://yanisvaroufakis.eu/2015/07/06/minister-no-more/

[Guest]

More than anything, Merkel will be concerned about maintaining power and I just can't imagine Germans reacting well to another Greek bailout.

Sad thing is, there's really noone in sight who could replace her as chancellor any time soon, no matter how badly this goes. The left half of the German political spectrum still are way too badly at odds with each other for a left-wing government to be feasible anytime soon (especially The Left and the SocDems, there's a lot of bad blood between them). I could see Merkel's CDU lose a good bunch of votes to the new-ish AfD (Euro-critics with a disturbing nationalist wing in the party, but still very much a wildcard noone really wants a coalition with), but not enough to bring them down to the level of their closest rival in size, the SPD (SocDems).

Realistically, at worst for Merkel, she'll end up with her Grand Coalition (CDU-SPD) still in charge, but no longer with as comfortable a majority in parliament as now... and AfD entering parliament as a sizeable part of the opposition (a goal they barely missed in the last national election, due to the 5% threshold).

[Zerο]

A good look at the political situation:

http://www.bloombergview.com/articles/2015-07-06/greece-hits-the-self-destruct-button

[Guest]

Angela Merkel nor French President Francois Hollande would like to be remembered as the leaders who failed to keep the European monetary union, or perhaps even the EU itself, together.

While I agree that Merkel wouldn't want to be remembered as such... but listening to the current opinions in the German populace, she would probably find a solid boost in popular support - at least short-time - for being the one who "kicked Greece out". Might even "fish back" some AfD voters into the CDU that way.

Populism isn't Merkel's thing, though. She's more like a schoolmarm in her leadership style.

[Zerο]

If Syriza really does want to stay in the Euro, I've never seen a government hurt its own cause this much.

http://www.businessinsider.com/greece-referendum-totally-pointless-and-puts-country-in-worse-position-2015-7

[ChineseGirl]

politics is just power nothing more

so democracy is some kind of "prank" made to the people: politicians let people think they have power but in reality they have no power at all

just a joke

[Robin L]

politics is just power nothing more

so democracy is some kind of "prank" made to the people: politicians let people think they have power but in reality they have no power at all

just a joke

Even if that were true, wouldn't it be much worse if there wasn't any democracy at all, like in China?

[marki]

Bye bye Greece.

Yeah....China isn't a good example of a government that is working properly....at least I can go to any website I want without having them crack down on me.

[Bad_Mr_Tree]

The Great Firewall of Ataturk blocks more websites than the Chinese one... and Turkey is part of NATO! And a democracy! (hahahahaha)

[Robin L]

The Great Firewall of Ataturk blocks more websites than the Chinese one... and Turkey is part of NATO! And a democracy! (hahahahaha)

For the record, China also calls themselves a democracy.

[allrightalready]

The Great Firewall of Ataturk blocks more websites than the Chinese one... and Turkey is part of NATO! And a democracy! (hahahahaha)

For the record, China also calls themselves a democracy.

and the USSR called itself communist but it was an oligarchy like any other nation state

[ChineseGirl]

politics is just power nothing more

so democracy is some kind of "prank" made to the people: politicians let people think they have power but in reality they have no power at all

just a joke

Even if that were true, wouldn't it be much worse if there wasn't any democracy at all, like in China?

Ok you're from Taiwan...of course you say that...

anyway here I live very well and I don't feel any need of so called democracy...and I'm not the only one

[ChineseGirl]

The Great Firewall of Ataturk blocks more websites than the Chinese one... and Turkey is part of NATO! And a democracy! (hahahahaha)

For the record, China also calls themselves a democracy.

a people's democracy to be correct

the full name of our coutry is People's Republic of China

obviously, like every country in the world and in all history, people have no power...

every country in the world is an oligarchy... ;)

[ChineseGirl]

Bye bye Greece.

Yeah....China isn't a good example of a government that is working properly....at least I can go to any website I want without having them crack down on me.

to be honest our government is working properly...

look at our economy and even our place in the world

thank to our government we are now a political, economic and military superpower like USA and Russia

[Zerο]

I think working properly might be an overestimation. Let's see where China stands once manufacturing shifts to India due to the rise in living standards and environmental concerns in China.

Russia is a glorified gas station, and an inefficient one at that compared to Saudi Arabia and the USA.

[ChineseGirl]

Russia in much more than an oil station....

that country has a millenary history, a powerful army and Putin is a real tough guy

I don't see all this efficency in USA and Saudi Arabia

maybe I'm wrong but a couple years ago I heard USA risked default... (and Saudi Arabia just live thanks to its oil...)

[marki]

China only works because they are nationalistic policy wise and have enough people to keep labor cheap. If America had a billion + people we would be similar to China. Geographically our two countries are quite similar in size and resources.

But I digress....back to Greece everyone!

[Zerο]

Russia in much more than an oil station....

that country has a millenary history, a powerful army and Putin is a real tough guy

I don't see all this efficency in USA and Saudi Arabia

maybe I'm wrong but a couple years ago I heard USA risked default... (and Saudi Arabia just live thanks to its oil...)

I think you've been drinking too much of the koolaid. A strong military doesn't grow your economy and trying to make it so will damage the latter (Ukraine being an excellent example).

We were never at risk of a default, our financial system was damaged by the rather sudden Lehman Brothers bankruptcy, which fueled a global financial crisis.

In any case, I think people overrate democracy. Personally, I prefer a technocracy. Seeing some of the people that get the same voting power as me and other professionals is worrisome.

[ChineseGirl]

you should use your inmates to do penal servitude like ours inmates ;)

Regarding Greece: of course that country is wasted...maybe they should live euro and above all EU.

[Robin L]

Before anyone says anything about Greece democracy, what Syriza is doing is not bringing back democracy. It's boarderline nationalism.

[ChineseGirl]

no I don't drink koolaid :twisted:

anyway it's the truth in 2013 USA risked default

US has three weeks to raise debt limit--or risk default | MSNBC

Before anyone says anything about Greece democracy, what Syriza is doing is not bringing back democracy. It's boarderline nationalism.

it's better than being euro-slaves...

[Zerο]

Before anyone says anything about Greece democracy, what Syriza is doing is not bringing back democracy. It's boarderline nationalism.

lol there's nothing borderline about it. Maybe their nationalism will keep them fed once their economy crashes. These capital controls are causing more damage to their businesses than most will realize.

http://www.bloomberg.com/news/articles/2015-07-08/no-money-no-supplies-no-workers-life-for-greek-small-business

The effect on medical supplies should be interesting.

[Welsh Ace]

The Eurozone countries, IMF and ECB is bascially demanding the impossible of Greece. They are being unresaonable. Greece cannot pay back their debts even the IMF has said this. Germany needs both realise and make the arguement to it's people that the only realistic solution for the Eurozone is to write off a significant chunk of Greek debt. The so-called bailouts won't work as they are just more loans keeping the country in debt and the austerity programme being imposed on Greece has wrecked the Greek economy making it impossible for Greece to grow.

The crisis in Greece has been about for a while now and it is unfair to blame the new Greek government (who has only been in power for 6 months) for what is going on. If anything the new govenrment is the only ones being semi-realistic. The New Democracy Party and POSAK bent over backwards for the ECB, Eurzone countries and IMF and got punished for it. Especially the centre-left Posak party who saw their vote go to Syriza.

If the Eurozone countries, ECB and IMF do not take the only economically sensible action they will risk damging the Eurozone and creating an even bigger humanitarian crisis in the EU's own backyard than there already is. The Greek people have now spoken twice (once with the election of Syriza govenrment and now with the referendum) and it is now time for the EU to recongise the democratic will of the Greek people and offer Greece some real debt relief and debt restructuring. Even if they have to do it against the wishes of Germany. Whoses current position is against it's own long term interests anyway.

[Zerο]

Actually, the new government has worsened Greece's economic situation substantially. Greece actually had a positive growth rate in 2014, and since before the election (where Syriza was going to win), the economy has since contracted and dozens of billions of capital has been withdrawn from the Greek banks.

Even worse, the recent capital controls have increased the size of the third bailout. So, how are you going to convince German taxpayers to fund a situation made worse by an incompetent Greek government?

Greece's democratic will does not entitle it to German taxpayer money. If a humanitarian crisis is needed for Greeks to realize this, so be it. People tend to learn better through suffering anyhow.

[Welsh Ace]

The sitution in Greece has been caused by the IMF, ECB and Eurzone countries forcing an unsustainable sitution onto it and the Greek debt is impossible to pay off. The IMF has said as much. Even if the New Democracy party had remained in govemrnet the debt would be unrepayable and the the economy would have tanked again. Also Syriza is a threat to the neo-liberal economic model that the EU and IMF support and they are waging a bit of economic warfare upon Greece as punishment for electing a government that does not believe in neo-liberalism.

Moreover, to quote John Maynard Keynes. "If you owe your bank £100 you have a problem. But if you owe £1 million it has." In other words Greece owes Germany so much many that a Greek default and Grexit could damage the German economy and the Eurozone as a whole. It be far better for Germany to write off some of the debt and get some of the money back then to write off none of the debt and risk getting nothing further back.

There is also no way of knowing what turmoil a Grexit would cause in the Eurozone as a whole. Which again would be bad news for Germany. It is in the self-interest of the Germans to write off some of the Greek debt even if you don't consider the democratic will of Greece important.

[Skycaptain]

The problem isn't just Greece. As others have said, there are other Eurozone countries who have swallowed the bitter economic pill, such as Spain, Italy and Ireland, who are now beginning to recover. They will say, not unreasonably, that they have implemented economic measures which were unpopular with their own people to avert such a situation, so why should Greece be allowed to get away with it.

Then there are the non-Euro nations. Here in Britain we have a higher per capita GDP, but a similar per capita debt. What if the financial institutions turn around and say no, your £ 1.4 trillion debt is too much, we won't lend any more. Or the US, whose debt is far greater. I have to ask is it really a good situation that the largest global industry is financing government debt?