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[ 154 ] July 5, 2015 |


In a landslide.

I don’t claim expertise, but I’m inclined to defer to this actual expert and see this as the least terrible outcome. As Krugman acknowledges, there’s reason to be concerned about Syriza’s competence (and indeed the heighten-the-contradictions bureaucratic reform proposal is amateur hour.) But nevertheless the troika’s conduct and its offer of austerity today austerity tomorrow austerity forever — punishing ordinary Greek citizens to bail out creditors who made bad bets, even though they won’t even be bailed out — has been abominable. I can understand why the electorate wouldn’t submit to these terms.

And now I’ll leave the discussion to the many people who know more than I do.

…This seems right: “Greece is less likely to get a deal after the referendum, but will get a better deal if it does get one.”


Comments (154)

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  1. Murc says:

    punishing ordinary Greek citizens to bail out creditors who made bad bets, even though they won’t even be bailed ou

    Oh, the creditors have already been bailed out. That, in fact, is why the troika can continue to do this to Greece; they made damn sure, over the past five years, that the money they pumped into Greece flowed right back out to their own banks, who were frantically re-valuing their debt left, right, and center.

    Now that there’s little real risk of contagion (I guarantee you that Germany has constantly updated stabilization plans already in place) they feel they can do whatever they want to poor Greece because it will have little effect on their own citizens.

    • Ahuitzotl says:

      Well, except for ensuring no other peripheral nation trusts the ECB and destroying most of the unity of the EU by maximising nationalistic feelings, kind of the opposite of the EU’s purpose.

  2. FMguru says:

    Yeah, NO was pretty much a no-brainer. Austerity and 28% unemployment until the end of time, or a chance at making things better. Hmmm, tough choice.

    Also good news for the rest of us. We’re not yet to the point where the banksters can just pick a crappy little country and throw them against the wall just to show the world they mean business. Sovereignty and democracy do still count for something in the world.

    • jben says:

      In fairness, this decision means that the situation in Greece will actually get much worse in the short term, as the country will be unable to pay for it’s imports, or its public sector bills, and will probably have to start rationing. In fact, I rather think that the government will collapse about July 30th (after the public sector salaries come due). (Well, I suppose there could be some kind of last minute deal, but that seems pretty damn unlikely now.) I cant blame the Yes voters for wanting to avoid that fate. In the long run, however, I think a default may be better for Greece, and it’s pretty obvious they weren’t going to get much better from the Troika.

      • ThrottleJockey says:

        Yeah the problem is that Greece caved to Merkel and the IMF and waited so long. Had they exited the Euro back in ’08, defaulted on the debt and inflated the (New! Improved!) Drachma they’d have rebounded by now.

        In the short term the pain will be immense. For the life of me I don’t see why Tsipras didn’t wait until after the August vacation season had passed to do this. About 17% of their GDP is tied to tourism and most of that in August. This does make me question their competency.

        • MacK says:

          A simple question – if I owed you say €300 for a week’s work (hard labour) and offered you 300 new Drachma, how would you have responded?

          The Greek government has a huge problem launching a new currency – and absence of credibility, no reserves to back the currency with and an existing currency in circulation and indeed payable to many people.

          Even under the old Drachma Greeks preferred to be paid Dollars, Pounds, Deutschmarks – how will they react to the new? Badly I suspect.

          • Murc says:


            You’ve just stated a bunch of rather obvious facts. Go on?

            • MacK says:

              Why should I go on. You seem to be blithely suggesting a New Drachma – so Murk – address the obvious facts. If you can?

              • Murc says:

                What precisely would you like addressed? You… just asked a question with an obvious answer (“if I owed you say €300 for a week’s work (hard labour) and offered you 300 new Drachma, how would you have responded?” the answer to which is “badly) and then outlined a bunch of facts indicating that Greece launching a new currency is going to be absolutely hellish.

                Those points are utterly banal and of no surprised to anyone at all. It’s like pointing out the sky is blue. If someone tells you that, you expect a follow-up.

                • MacK says:

                  But still – if you think it’s a solution explain how Greece surmounts these hurdles … Because if you can’t then you cannot explain how a no vote leading to Grexir is remotely a good idea. Explain, I mean as you say they are obvious points, surely you thought about them, they being so obvious….

                • Gregor Sansa says:

                  Because the other option is worse?

                • Murc says:

                  Well, a number of those hurdles are insurmountable, because they’re not hurdles, they’re just “things that happen when you launch a new currency or do significant re-valuation in a time of crisis.”

                  There are a lot of ways this can go, from the anarchic to the untroubled. The best way for Greece to unsure the maximum amount of stability is to be bluntly up-front that things are going to be absolutely wretched for awhile. There are going to be capital controls. Rationing. Black marketeering. The euro, being so much stronger than a currently hypothetical drachma, is going to circulate as a strong unofficial currency. Unemployment is likely to get even worse in the short term.

                  But the flip side of that is, if Greece can manage to govern itself even barely on this side of competently, is that they’ll hit bottom relatively quickly. The mechanics by which a country with an imploded, devalued currency claws its way out of the abyss are well-known. There’s no way in hell they manage it as well as Argentina, but it can be done.

                  This is of course incredibly risky. Under almost any other circumstances it would be wildly, grossly reckless. But these are not those circumstances, and given the choice between hitting the bottom hard and simply continuing in an endless, heinous economic twilight, this seems preferable.

                  But this can go south really easily. Golden Dawn could come to power. The country could implode into a mess of unending riots. All sorts of nightmare scenarios. And hell, I wouldn’t put it past the troika to decide to do something really awful, like boot Greece from the EU and commence economic warfare against it as a demonstration to what happens if their will is defied.

            • jben says:

              I think he’s trying to point out that while they could pull this thing off, its’ more likely to be a huge clusterfuck that will hurt Greece for some time to come. Indeed, that’s why while I would have voted no, I’m still rather apprehensive where this leads.

              Of course, it’s still not clear to me that staying with the Troika would have been any better. But this is MacK, so he will obviously blast the “far left” for even daring to suggest that this might still be the right choice.

              • MacK says:

                Hey, you have not heard me blast the right.

                • Gregor Sansa says:

                  I wonder why…

                • sonamib says:

                  Yeah, seconding Gregor Sansa.

                  And MacK, you like to blast the “exit the euro” solution (let’s call this solution (1)). But you also (rightly) don’t like the “continue the ever harsher austerity” solution (solution (2)).

                  The truth is, only (1) and (2) are on the table right now. Which one is worse? That’s the real debate. There’s no point in imagining some fantasy scenario where the Troika abandons austerity and the only reforms they ask are anti-corruption ones*.

                  *That’s what you appeared to be proposing last time. If that’s not true, please clarify your solution.

          • Ronan says:

            Yeah, Ive never understood the specifics of how that’s meant to work. Even in the best of times it’s an incredibly difficult ask. But now ?
            Do you see any possibility of ECB support for a return to the Drachma (provide liquidity, maybe debt writedowns, peg it to the euro…. in exchange for a Greek voluntary exit?)

            • jben says:

              Possibly. It would depend on wether there is any willingness on either side to reach a deal.

              Given that Grexit is now almost certainly going to happen, this would be the ideal scenario. I rather doubt it, however.

            • ThrottleJockey says:

              I wouldn’t expect any help from the ECB. They’re going to want Greece to suffer and suffer good. As an example.

              All that being said, the choice (I think) is ultimately as others have framed it: Do you want to continue pissing into the wind, or do you want to at least try a different direction where you hope the wind isn’t as strong?

              The definition of insanity is doing the same thing over and over and expecting something different.

              • Ronan says:

                Well *if* theyre primarily making an example out of Greece, (to set the terms in the rest of the periphery), that policy doesnt necessarily carry over to a Greek exit.
                Ireland Spain and Portugal have no intent to leave the Euro, so a Greek exit would be enough of a disincentive to their left to rock the boat. There’s no reason the Troika have to make an exit as hard as possible.

                edit: creating a mechanism for a peripheral country to leave might actually be a positive

                • Murc says:

                  Ireland Spain and Portugal have no intent to leave the Euro, so a Greek exit would be enough of a disincentive to their left to rock the boat. There’s no reason the Troika have to make an exit as hard as possible.

                  Those countries currently have no intention of leaving the euro.

                  It is in the best interests of the troika and especially of Germany for nobody to ever want to leave. Therefor, the last thing they want is for Greece to pull an Argentina. It is vanishingly unlikely that that will happen; Argentina had advantages that Greece does not. But the last thing the ECB and their fellow travelers want is for Greece to hit the bottom, bounce, and then in 2020 or so to be well on their way to a visible, sustainable recovery.

                  Because that makes people go “Oh, it can be managed.” And the next time a crisis comes (and make no mistake another crisis will come; the underlying causes of the last global financial crisis have NOT been addressed in any meaningful way) maybe some of the countries that get nailed by it decide to get out early while the gettin’ is good.

                  No, I’m afraid I have to say that the core euro countries have every incentive to make Greece’s exit as horrible an experience as possible and then to kneecap them at every step of the way on the road to recovery.

                • Gregor Sansa says:

                  That’s why my dream scenario is that Greece remains defiant but inside the Euro. It’s not the absolute best imaginable outcome for Greece, but it is certainly as good as it gets for Europe as a whole.

                • Murc says:

                  I’m not sure Greece can manage that short of someone writing them a huge check.

                  Although I have to admit: most of my commentary on this is informed by, you know, actual economists, because I’m not one myself, and so far I’ve seen zero discussion of “they default but stay in the euro” as an option. Most have assumed that default carries with it implied exit.

                  How would that even work? I mean, if they decide to default but also stay in the euro? Can the ECB do shit like try and garnish their tax revenues as the price of participation in basic international banking services or some bullshit like that?

                • N__B says:

                  I’m not sure Greece can manage that short of someone writing them a huge check.

                  Surely Golden Dawn can get money from “Murcan conservatives through a GoFundMe.

                • Gregor Sansa says:

                  I’m pretty sure it’s uncharted territory. But then, so was the referendum.

                  The Greek government owes the money. If they can run on a cash-only basis for the foreseeable future — which is a stretch, but not out of the question, given that all the deals on offing involved them running a surplus — then there is not actually any mechanism for kicking them out of the Euro. As for garnishing their money… I doubt it, but who knows.

                  Where it really gets dicey is that it would certainly provoke a banking crisis (or, that is, prolong/worsen the existing one). Technically speaking, that should be the ECB’s problem to solve, not the Greek government’s. On the one hand, it is more than plausible that the ECB would shirk that responsibility out of spite. On the other hand, deliberately letting banks fail purely for lack of liquidity, even though they have a decent balance sheet… that would be pretty radical, and stands a risk of leaking contagion to Spain or whatever, if not now, then someday.

                  If Greece tried this, and the ECB did respond with the full financial terrorism route… I doubt Syriza could survive politically. But then again, Castro and Chavez show that defying economic terrorism can work politically.

                  My suspicion is that it would be devilishly hard to do for the first two months, but after that, it would work. And I sure as fuck would want to see the looks on the eurobankstas’ faces if Greece pulled this one off…

          • But if there aren’t any Euros to be had, due to capital controls and a banking system that’s all but shut down, you have to lump it to eat, no?

      • MacK says:

        To arguments about the long-run I usually quote (in full) Keynes:

        “But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again.”

        I think the problems will arise at the end of the month too – and I think paying the public sector, inter alia, a core part of Syriza’s support, will be the big issue.

        Varoufakis in particular has made a lot of categorical statements as to what will happen after a no vote (based I suppose on game theory.) The banks will reopen Tuesday, the rest of the Eurozone will come bearing offers, etc. Most observers reckon this is in pigs-flying territory (well the banks might open for a few minutes, ’til the cash runs out.) This is when things will get really sticky – Tsipras and Varoufakis made a bunch of promises that specific things would happen to persuade people to vote no – what happens when the pigs end up as sausage instead of flying? What happens when Greece (which is a substantial food importer) finds that its supermarket chains and wholesalers have no credit outside Greece (or in)? What happens when the first payment is made in Scrip – and no one knows if it will be redeemed for Euros or the New-Drachma? Will shops accept scrip? Landlords? What if there is no scrip and the civil service and public sector are left unpaid? The pensioners?

        How popular will Varoufakis and Tsipras be in a month or two, that is the really tough question.

        • jben says:

          I’m not sure they will still be in office by then. There are going to be some interesting times ahead for Greece, and I mean that in the worst possible way. Hopefully, whenever the recovery comes (2 years?, 5, 10, 20?) Greece will still be democratic, and thus some far-right or authoritarian government won’t get credit for it.

    • Yankee says:

      Sovereignty and democracy do still count for something in the world.

      Hang on to what Sovereignty you can find, for sure.

    • pianomover says:

      Well there is/was Chile.

  3. Brien Jackson says:

    My take is that this is a very scary outcome…but there was literally no other option. Tsiparas tried to offer the troika a proposal that met their conditions while saving Syriza some face, and the response was a declaration that the Euro elite wouldn’t accept a proposal that raised taxes on business. There was no way to accept the terms offered that didn’t undermine the very foundation of democratic legitimacy here, and while I’m concerned for what may be in store for the Grecian populace, I’m glad they’ve made a stand against the German delusion and the Euro oilgarchy more broadly.

    • jben says:


      Look, in some ways, I actually agree with Ronan and others that this is a very risky decision, and will cause immense pain in the short term. And I don’t think that Greece will recover from default as easily as some are hoping. But dammit, after the way the Troika has behaved, I would have voted no too. This way, there might at least be a slim hope for Greece.

      • Brien Jackson says:

        I think they can fight their way out of it with an exit from the Euro, and I think they can make the “elites” pay a price for this too. Ultimatley, Greece has the power to make the Euro elite decide if the EU/Euro is going to be a union that benefits all of Europe, or is just about enriching the Euro elite.

        • Gregor Sansa says:

          Honestly, having Greece inside the Euro is a good thing for Spain et al. It will be a pity if they have to leave.

          Best “plausible” outcome (by some definition), in my book, would be if Greece could default on their loans but stay in the Euro by toughing it out with cash-on-the-barrel. Even better if they explicitly say that the default is only until their unemployment goes below x%, so that the creditors have an interest in helping them recover.

          The thing that probably makes that impossible is that the ECB seems willing to punish Greek banks for Syriza’s “sins”. Which is totally against the ECB mandate and all morality but whatevs.

          • Steve LaBonne says:

            It will certainly be educational for voters in eg. Spain to watch the ECB acting like a political institution enforcing German policies rather than like a central bank. Does one want to continue in a currency union that is set up that way?

            • ThrottleJockey says:

              I think that’s the more interesting angle: Does this pressure PIIS (with Greece’s exit, no “G”) into leaving while they have a modicum of economic stability?

              It may be (and probably is) the case that the short term pain of exiting is so great that only a crisis could precipitate such a decision, but its worth taking a STRONG look at now.

        • MacK says:

          Ultimatley, Greece has the power to make the Euro elite decide if the EU/Euro is going to be a union that benefits all of Europe, or is just about enriching the Euro elite.

          Care to expand on how Greece has the power (is it Varoufakis’ hidden suit and cape?)

        • Ahuitzotl says:

          to make the Euro elite decide if the EU/Euro is going to be a union that benefits all of Europe, or is just about enriching the Euro elite.

          They made that decision 5/6 years ago, in favour of themselves. The price of that is going to be unbearable, for all of europe, once it plays out.

      • Ronan says:

        I would have absolutely voted NO to a similar referendum in Ireland in 2011-12. Im not blaming the Greek people for the vote. But Im thankful that we had a political class that, while quite incompetent in a lot of ways, was responsible (and I know the Irish downturn was not comparable to the Greek. Greek cuts were much deeper – they also had a lot more to cut – so i dont deny the fact that the Troika, primarily, have been deeply irresponsible and shortsighted and cruel in how theyve handled this crisis)
        I think people are missing the point as to how much value the populations of smaller european countries see in the EU, and that it has worked in the past to both stabilise their political system and develop them economically. (with better results in Ireland on the second than in Greece) And that cronyism and clientilism is quite prevelant in our political systems (again with Greece considerably worse than Ireland)So any post euro future in these countries does have to take seriously the structure and culture of their political economies.

        ETA : In ireland I think we could have got a better deal, mostly because the crisis wasnt as deep and parts of it were solely concentrated in the banking system. But not (as some suggested at the time) by threatening to bring the Euro down with us

        • Gregor Sansa says:

          Now you are sounding reasonable. Let’s stop doubling down in the other thread, OK?

          • Ronan says:

            Yeah, id planned too ; ) Apologees for the tone at times on the other thread(I wasnt calling you moronic, btw)

            • ThrottleJockey says:

              Ronan the Rampager? I can’t wait to read the other thread! ;-)

              • ThrottleJockey says:

                Post Script:

                I’m enjoying your comments. I like the “man on the ground” perspective, the political economy insight, and the don’t-overlook-the-structural-issues-by-moralizing-the-debate.

                • Ronan says:

                  Well on the ‘man on the ground’ part, i wouldnt want to overdo it. I had a LOT of benefits that many didnt (no dependants, an education, capability to change jobs, no problem moving, no house/debts etc)

                  A lot of people have suffered much more (I havent suffered in any meaningful way tbh) and disagree with my positions (even though I think the disagreements are minimal, tbh)

        • MacK says:

          Oh the deal Ireland got was probably as good as it was going to get.

          The serious amateur hour was not requiting Anglo-Irish to go bankrupt (i.e., into administration) along with Irish nationwide before the government intervened. Lawyers were aghast – traders in Anglo-Irish debt pleasantly stunned. To explain, there is no better credit risk to lend money to than a bankrupt company, the creditor (which would have been the Irish public) stands at the head of the queue – by contrast there is no worse position than to extend credit just before the bankruptcy.

          What a lot of people seem to not realise is that Syriza arrived to to an “open door,” and promptly locked and barred it. The reality was that across the EU there was considerable annoyance with the pre-Syriza government (conservatives), who were regarded as having not delivered many of the reforms agreed to, particularly those that hit the oligarchs and the well off, while targeting the poor and marginal. There was also a broad sense that austerity was not working, and a sense that Syriza might be willing to offer the reforms that New Democracy would not.

          Instead Varoufakis arrived demanding an immediate 3-month unconditional bridging loan, unconditional debt relief (just give it to us), while simultaneously rolling back agreed reforms, including ones that benefitted the poor and middle class but bit-hard on the rich. Goodwill vanished, the pressure on Schäuble et al disappeared (and there was real pressure.) Telling Tsipras and Varoufakis to ****-off became the populist thing to do.

          • Gregor Sansa says:

            Interesting, but still worth at most a small fraction of the blame for this mess.

            • MacK says:

              Ah no – a large fraction. Failure to take opportunities is a mistake. The deal on the table was worse than Syriza could have achieved, had they not played games.

              There is a problem not understood. Greece is small – but in the background you have Five Star in Italy, Podemos in Spain and indeed Sinn Fein in Ireland threatening more of Syriza. There is a calculus here, reward Syriza, face the same problem in months in Spain, a little longer in Ireland and maybe a little longer again in Italy. Give the Greeks what they voted for and pretty likely Podemos and Five Star crater. What do you think the rest of the Eurozone will go for, pour encourager les autres….

              • jben says:

                Oh, we understand that issue. Indeed, it’s referenced downthread. And I get why the Troika don’t particularly want to encourage the populist parties in other countries. It just seems..morally suspect to us.

                And I may be misreading that bit about “what the Greeks voted for”, but it seems rather like you are saying “F*** them, they got what they deserved” With which, I naturally disagree.

          • jben says:

            while simultaneously rolling back agreed reforms, including ones that benefitted the poor and middle class but bit-hard on the rich

            Care to elaborate what those reforms were?

            I mean, I don’t doubt that there were some elements of the Troika’s reforms that were good, or that the Greek system desperately needed changes. But as I said before, I fail to see how “labor market reforms”, drastic cuts in social spending and pensions, and mass privatizations will actually help Greece get out of the depression.

            • MacK says:

              A huge proportion of the bailout plan consisted of measures to improve Greek institutional governance, measures to improve transparency in decision-making, attack price-fixing, deter corruption, stamp out fraud, ban the price-rigging that doubles the price of vital medicines in Greece. A chunk of these had been previously promised but not delivered by the pre-Syria government.

        • Warren Terra says:

          Wasn’t a lot of the crisis in Ireland about Irish banks, and loans to individuals rather than to the government?

          • Ronan says:

            Yeah. But there were also deep structural problems with the Irish economy (examples depending on your ideological preferences) that were going to come back on the state regardless of what they did with the bank debt.
            For example, the least contentious issue, there was a serious drop in tax intake once the housing bubble burst, unemployment increased and the economy stalled (and spending on welfare increased). Irish taxes were low across the board by European standards and a significant part of the population wasnt paying any at all. (Fianna Fail’s policy during the boom was ‘if I have it I’ll spend it, and cut taxes’) The level of income and spending wasnt sustainable outside of a never ending property bubble.

            The technical details of the various bailouts got too much for me to understand, so Im not sure whether there was the potential to not pay X amount of bank debt (ie I know Anglo was not systemic so could have been written off) which would have kept us out of a bailout, but regardless there was going to be a restructuring of the economy to some degree.

            • Warren Terra says:

              Oh, sure. And I’m sure my comment on the bank debt is oversimplified even within itself. But I think the difference in terms of EU leverage between Greece (massive debts owed by the Greek government to powerful foreign lenders) and Ireland (massive debts owed by private citizens largely to domestic banks) matters. Sure, as I recall the Irish government opted to bail out its bankers with state funds, at or near parity rather than at a steep discount, and so maybe at that point the situations converge. But they did reach that point by very different paths.

              • Ronan says:

                Yeah, that seems a fair distinction. Im not sure how far it goes (ie iirc Ireland owed a good deal to foreign creditors as well) but Id have to look it up. (Ill try do it tomorrow)

              • Ronan says:

                The specifics of who decided to bailout the banks is still contested. Irish politicians claim it was primarily European pressure once the gaurantee expired (though I think it was mainly a domestic choice, ie Irish developmental policy values its credit worthiness and ability to attract FDI.The Troika has acted as a scapegoat, in some ways, for domestic policy choices)
                I dont know where that argument stands now, as I havent kept up to date.

            • Ahuitzotl says:

              Fianna Fail’s policy during the boom was ‘if I have it I’ll spend it, and cut taxes’)

              so thats where W learned it …. it’s all the fault of the Irish.

  4. D. C. Sessions says:

    The troika gambled and lost. They didn’t have much choice, though, with the peasants revolting. It really was a matter of putting them in their place, hard, or watching Ireland, Spain, Portugal, and who knows who else (maybe France even) starting to think of self-government.

    No telling where that might have led.

    Although the timing (5 July) is interesting.

  5. Joshua says:

    Defaulting on debts and/or abandoning the Euro is going to inflict misery on Greek citizens, make no mistake on that. So has austerity, though, and there is no end in sight for the average Greek citizen. What austerity did not offer was some self-determination and a light at the end of the tunnel. The troika had no interest in offering it either. That’s why Syriza was put into power and that’s why there was a no vote today.

  6. Warren Terra says:

    The important thing here is that the bankers all got bailed out years ago, at or near one hundred cents on the dollar, and the dickering now is what will happen about the vast sums money Greece borrowed from the rich EU countries in order to bail them out.

    Yes, a small portion of the loans are for maintaining the Greek state in operation – but not the majority.

    • MacK says:

      Warren, they got 100 cents in the Euro. That was a key aspect of the bailout, to avoid any write downs at major Landesbanks, etc.

      It is worth looking at this article, and the second table to see which banks had the largest exposure in 2011 (and by the way, they were probably lying (it was worse.) When you read the list, it is worth considering how many have substantial state ownership and hence taxpayer money exposed and politicians on their boards. Particularly interesting are:

      DZ Bank (the syndicate for the German cooperative banks (SDP on its board) , Commerz, Postbank, Landesbank Baden (State owned CDU pols), Norddeutsche Landesbank (state owned CDU), Landesbank Hessen (ditto), Bayer Landesbank (ditto), West LB (ditto), Deutsche,,

      in France – BNP Paribas (that’s a lot), BPCE (wow that a lot for them), Societé General (a lot – very political), Casa (jebus, for them that’s a lot.)

      In the Netherlands: ING (they lent how much!!)

      In Belgium: Dexia (oh mother of god! wow!)

    • Ronan says:

      Afaik there was substantial debt write down (50plus% or up to 75% of book value ) in 2011(?) Greek bailout ?

  7. Warren Terra says:

    Oh, and also: Hungary has in recent years gone full metal fascist, and it’s a member in good standing of the EU, which is trying to engineer the overthrow of an unquestionably elected, democratic, and representative (if perhaps hapless and helpless) Greek government.

    • Steve LaBonne says:

      If I had any remaining faith in human nature, it would be destroyed by the uncanny resemblance between the self-serving fecklessness of early 20th century European elites and the self-serving fecklessness of early 21st century European elites. We can only hope the outcome won’t be quite as catastrophic this time.

    • UserGoogol says:

      You can’t completely flatten the technical distinctions there. The financial wing of the European Union and the human rights wing are different (if overlapping) organizations with different powers. Although Europe probably could do more to pressure Hungary (I don’t know that much about that situation unfortunately) and certainly should be less harsh on Greece, it’s not an apples to apples comparison.

    • James says:

      Hungary has in recent years gone full metal fascist,


      • jben says:

        I’d say more “soft authoritarian”, but there are, indeed, some worring trends in Hungary, and its hard to call it a liberal democracy anymore. (Indeed, Orban explicitly stated he wasn’t in favor of liberal democracy)

        • James says:

          Can you point me at a link or something so that I can fall behind in a somewhat more sedate manner than seems currently to be occurring? Honestly, I used to think I payed attention to world events.

          • elm says:

            Here’s Human Rights Watch take on Hungary.

            Like jben, I wouldn’t say “full metal fascist,” but it isn’t good either.

          • Warren Terra says:

            It works out to be a lot of text, but Schepperle’s series of letters on Hungary (to Paul Krugman’s blog) tell the story.

            Basically: the ruling party set itself up to rule by decree, and to destroy all countervailing influences, from the schools to the courts, in open service of an anti-democratic ideology, and including welcoming the support of Hungary’s truly despicable far-right parties and worshiping Hungary’s WWII era fascists. But, as they say, read the whole thing.

    • MacK says:

      My own sense of it is that the former Eastern Europe go so used to authoritarian governments under the soviets (and indeed before) that they have developed a cultural tendency for tolerating or even wanting some level of authoritarianism – almost that people are uncomfortable with non-authoritarian states.

      • Matt_L says:

        No the problem is not that the East Europeans are inherently comfortable with authoritatianism. That smacks of national character.

        The problem is that the political parties and their members tend to leave out the pluralism required for a functioning republic. A workable political system has to have some protection for the minority, but that can’t solely be guaranteed by the shape of the constitution. Society as a whole has to have a certain live and let live attitude so that after the election the opposition can say, well we lost this time, but we’ll still act as a loyal opposition and try again. In turn the governing party doesn’t try to keep all the spoils for itself and lock its opponents out of all the decision making process.

        In Hungary Fidesz won the last two elections by a wide enough margin where they could revise the constitution and basic laws whilly nilly. They could throw social norms of pluralism out the window because they claimed to be staging a revolution against the (very egregious) corruption and cronyism of the socialists (MSzP). Instead they doubled down on the clientelism of the Hungarian political and economic elite. You effectively have a one party state.

        This is not a case of the population feeling “comfortable” with authoritarian or soft-authoritarian government. Its a case of very specific political parties seizing control of the state and using it to further their own economic and social goals, while freezing out any meaningful political opposition.

        • Ronan says:

          There are political cultures and national traditions that people borrow from and identify with. Yes part (perhaps most) can be explained institutionally, but explanations to ‘national character’ arent unsupportable.

          • Matt_L says:

            National character too often smacks of stereotyping, especially in central and eastern Europe. To say that East Europeans are prone to authoritarianism is not far from saying the Greeks, Serbs and other Balkan types are a bunch of lazy yokels whose idea of a good day’s work is sitting under a tree, drinking palinka, and taking pot shots at roadents with a squirly rifle while their wives work in the fields. Or, if you believe national character explains social behavior, remember that all Germans are studious, hard working, and would never plagiarize their PhD theses.

            I’m more comfortable saying that a significant minority of people in any given society do not understand pluralism or its significance in a well functioning democracy. I think it is common in the US, but represents a minority view. While in Hungary, and some other countries in Central and Eastern Europe it has become a majority viewpoint of the political class. All political parties have a faction that endorses the “my way or the highway” approach to politics. But typically habit, practice and rules keep that unilateralist behavior in check. I think the Tea Party represents the anti-pluralist trend in American politics to a T. Right now the institutions kind of keep that in check, hopefully the electorate will catch on.

            The habit and practice of pluralism did not have time to develop deep roots in places like Hungary after 1989. You have to have a great deal of social trust for pluralism to develop and flourish. The post 1948 communists governments deliberately destroyed that social trust root and branch. Even though the country had a parliamentary history back in the nineteenth century, pluralism has withered in Hungary. If attitudes towards the Roma and other unpopular minorities are any indicator, pluralism is generally in a fragile state across the former eastern bloc. I blame the communists for that, not some sort of unchanging national character.

            • MacK says:

              I don’t think it is national character, but rather that societies get used to authoritarian governments, adapt to them, and become more comfortable with authoritarianism, and perhaps less comfortable with more liberal and pluralist structures. It is why I suspect so many authoritarian states can backslide to authoritarian after the previous one is overthrown.

              I also see it as a factor in clientism, nepotism and corruption. A big factor is that governments leave the institutional structures that allow corruption in place, so that their successors merely have to reach for the levers – which is why you see left wing governments that succeed right wing governments turn out to be just as corrupt – I mean the desert buffet is just there, mostly uneaten, why not eat some…. But also societies get used to bribing, calling in favours, etc. – the society has become culturally predisposed to engage in these practices.

              It may take time to change the culture that normalises authoritarianism, or corruption, nepotism, etc. However, these negative cultures establish very fast – a worrying issue when you see the influence of money in U.S. politics.

            • MacK says:

              I’d add to that the observation that the communist regimes of Eastern Europe were very “our way or the highway”

  8. sleepyirv says:

    Unsurprising. To quote Mae West, “Between two evils, I generally like to pick the one I never tried before.”

  9. NewishLawyer says:

    I don’t quite understand how the IMF/Troika Bailout was supposed to work. The IMF gave Greece money and the money went immediately back to the IMF? How does this work?

    I think either vote was going to be bad news for Greece but voting no is kind of “Perhaps today is a good day to die” kind of approach. Voting yes would put them at the mercy of the IMF and that would impose a lot of pain as someone commented above. Voting no means pain on your own terms like dying at the barricades while screaming “No Pasaran”.

    I feel sorry for the everyday Greek citizens. They are going to suffer. People are going to die because they can’t get medication. This happened when Argentina defaulted if I heard correctly, people could not get insulin.

    • Steve LaBonne says:

      It’s called money laundering. They laundered a bailout of their own banks through Greece. Now, to avoid the wrath of their own voters, they continue to pretend that it’s the Greeks who will somehow pay.

    • Gregor Sansa says:

      I made this off-topic comment earlier but somehow it didn’t take:

      In Guatemala, 11 dialysis patients died because of a corrupt contract promoted by the vice president. When it came to light recently, it (among other scandals), provoked the largest protests there since at least 1978, possibly 1944. The vice president resigned, but protests continued, calling for the president (who by the way is a well-documented major war criminal from the 80s) to follow her out. But then he made a speech… with the US ambassador literally standing at his shoulder. Makes a mockery of US calls to fight corruption.

      We’ll see what happens next…

      • Ahuitzotl says:

        Makes a mockery of US calls to fight corruption.

        well seeing they are busy enabling corruption inside the USA, it’s kind of hard to take that too seriously anyway

    • wengler says:

      I feel sorry for the everyday Greek citizens. They are going to suffer. People are going to die because they can’t get medication. This happened when Argentina defaulted if I heard correctly, people could not get insulin.

      Greeks have been getting killed by austerity for the last five years. The middle class has been becoming homeless and killing itself(capitalist seppuku) for nigh half a decade. All because the masters of the coin in Europe are trying to prove a point. That being propping up Greece as an example to more important economies(from the EU core economies’ perspective).

  10. Konstantine says:

    Greece is receiving, at long last (and in God’s good time!) A stinging chastisement from

    He that searcheth the hearts, knoweth what the Spirit desireth; because he asketh for the saints according to God. Romans 8:27 Douay-Rheims

    Every human creature must submit to the authority of the Roman Pontiff–including the Patriarch of Constantinople. The Turks were the first terrible chastisement from the Lord for the act of schism by the Greeks, this is the second.

    Glory be to God!

    • Konstantine says:

      Another important fact to keep in mind, in viewing this through the Plan of God rather than vulgar politics is thus: The EU SPECIFICALLY REJECTED a clause in the European Constitution that would have acknowledged the Christian heritage of Europe and all European peoples.

      This was rejected, rejected so that the EU could retain the Satanic option of bringing in the Muhammadans in the form of the Terrible Turks, the Gates of Vienna would then be stormed not by Jihad but by stealth.

      God is chastising Europeans for their disturbing lack of faith.

      Hosannah in the Highest!

      • jben says:

        Wait, you actually think that the entrance of Turkey into the EU (which won’t happen anyway),means they would take over Europe?

        Ahahahahahahahahaha… no.

        • N__B says:

          We need the Polish nobility to protect Vienna!

        • Konstantine says:

          Birth-rates for Turks and other Muhammadans are incredibly prolific, while those of Europeans languish and stagnate due to the Satanic invention of chemical contraception. Most Europeans would rather take a vacation rather than have another child, subverting the will of God and turning the act of sexual congress from a life-affirm, life-giving, wondrous blessing from our Lord into something that has mere orgasm as the end goal rather than life.

          Bear fruit and multiply! Or the Lord will smite your inheritance, and give it to another–in this case, the Muslims. It is another chastisement. Grave, dark, and terrible days are ahead for Europe, days of Muslim domination and financial collapse, but Christ Jesus shall draw good out of the evil, in this case, he is using the Turk and Arab to show Europe the error of its ways on birth control.

          In a similar manner he is chastising Americans by giving our inheritance to the Latins of the South, but America is more blessed, for they are Catholics. Again, good form evil: from the evil of contraception will come the utter extirpation of Protestant heresy from North America. When the Founding Fathers created this damned country they dedicated it to the ideas of the so-called Enlightenment, and therefore, consecrated it in the name of LUCIFER, the light-bearer. But now the Latins shall cleanse us and consecrate us to CHRIST.

          • wjts says:

            Do you get a tingly feeling in your no-no parts when you think about hordes of swarthy Latin men coming to “cleanse” you?

            • Konstantine says:

              Not men but the women of the South will rescue the Untied States from Lucifer.

              Anglo-Protestant women are now barren, sterilized by chemical birth control as evidenced by their birth-rates while the Latins are fertile and prolific, their desecendants will replace yours. Anglo-Protestantism will finally be erased from the continent and Latin-Catholicism will reign supreme over the USA finally erasing the work of the eternally damned deists such as Thomas Jefferson, Benjamin Franklin, and John Adams.

              Enlightenment=Light-bearing=LUCIFER. The Founding Fathers were not that but rather the Sons of Lucifer, the light-bearer.

              • N__B says:

                Anglo-Protestant women are now barren

                What about sub-human Slav women? Asking for a friend.

              • wjts says:

                …Latin-Catholicism will reign supreme over the USA finally erasing the work of the eternally damned deists such as Thomas Jefferson, Benjamin Franklin, and John Adams.

                If you think Adam Weishaupt didn’t foresee that possibility and leave the Illuminati with a counter-plan to ensure eternal Satanic dominion over North America, then you’re even stupider than I thought (and I already thought you were pretty goddamn stupid).

          • jim, some guy in iowa says:

            I dunno. I think you’re going to have to work on your personality before you’ll be doing any fruit bearing, let alone multiplying

      • wjts says:

        The EU SPECIFICALLY REJECTED a clause in the European Constitution that would have acknowledged the Christian heritage of Europe and all European peoples.

        I have been warning people for years about the evils of the Perfidious Druid Lobby, but you’re the first one who ever listened to me.

        God is chastising Europeans for their disturbing lack of faith.

        The Greeks, I suspect, will be just fine – they have Mighty Poseidon to protect them, and he’s the best.

      • Hogan says:

        disturbing lack of faith.

        A Roman Catholic citing Darth Vader as scripture? Using a Greek name? I call bullshit.

    • jben says:

      Only 1000 years late!

    • wjts says:

      Weren’t you just extolling the virtues of notorious schismatic and defector from the One True Church Rod Dreher in the wake of the recent Homopocalypse? Have the courage of your convictions, dude.

    • Hogan says:

      I’m talkin’ about friendship. I’m talkin’ about character. I’m talkin’ about–hell, Leo, I ain’t embarrassed to use the word–I’m talkin’ about ethics. You know I’m a sporting man. I like to make the occasional bet. But I ain’t that sporting. When I fix a fight, say–if I pay a three-to-one favorite to throw a goddamn fight–I figure I got a right to expect that fight to go off at three-to-one. But every time I lay a bet with this sonofabitch Bernie Bernheim, before I know it the odds is even up–or worse, I’m betting the short money. The sheeny knows I like sure things. He’s selling the information I fixed the fight. Out-of-town money comes pourin’ in. The odds go straight to hell. I don’t know who he’s sellin’ it to, maybe the Los Angeles combine, I don’t know. The point is, Bernie ain’t satisfied with the honest dollar he can make off the vig. He ain’t satisfied with the business I do on his book. He’s sellin’ tips on how I bet, and that means part of the payoff that should be ridin’ on my hip is ridin’ on someone else’s. So back we go to these questions–friendship, character, ethics. So its clear what I’m sayin’? It’s a wrong situation. It’s gettin’ so a businessman can’t expect no return from a fixed fight. Now if you can’t trust a fix, what can you trust? For a good return you gotta go bettin’ on chance, and then you’re back with anarchy. Right back inna jungle. On account of the breakdown of ethics. That’s why ethics is important. It’s the grease makes us get along, what separates us from the animals, beasts a burden, beasts a prey. Ethics. Whereas Bernie Bernheim is a horse of a different color ethics-wise. As in, he ain’t got any. He’s stealin’ from me plain and simple.

    • mikeSchilling says:

      When the Crusaders took Constantinople in 1204, they spent three days looting, burning, vandalizing, raping, and murdering. And still the Greeks weren’t convinced that they should convert to Catholicism! Some people just don’t understand when they’re being taught a lesson.

  11. Yankee says:

    Cuba got through it; Greece can do it.

    Actually Cuba has been an interesting place to visit during the Castro decades, if you can get there and you wouldn’t rather be in Las Vegas. And they did reduce inequality by 2 or 3 orders of magnitude.

  12. wengler says:

    I can remember when liberals were cheerleading the expansion of the European Union and the launch of a common currency, some openly heralding the EU as some sort of counterbalance to the US to shove the US in the right direction.

    Instead we get another capitalist conspiracy to import cheap labor from the East(don’t worry racists, they’re white Christians), and massive real estate speculation raising prices and rents for people in the poorer EU countries, especially in the cities. So suddenly there are no jobs and the cost of living has risen.

    The response from the leaders of the richest EU countries? You are a bunch of lazy, shiftless tax cheats. And while we were willing to ignore the widespread practice of paying a part of a worker’s salary under the table when we were pushing the country into the European project, we will now insist that you document everything and tax all of it even though you need that money now more than ever.

  13. Vance Maverick says:

    Varoufakis out.

    Happened to see this on the Frankfurter Allgemeine, which I was hate-reading to soak up the smugness. (“Disappointment will set in soon,” smiles one Susanna Vogt.)

    • jben says:

      As I recall, he actually said he would resign after a no vote. I’m not quite sure why he said this, given that he campaigned for a no vote, but there it is. (Though confusingly, Tsiparis suggested that he would resign after a yes vote)

      I suppose its possible that Syriza really does think they can try one last negotiation after the vote, and thinks that not having Varofakis in the room will help things. That’s about the only way I can make sense of this anyway.

      Of course, its’ also possible he wants to be gone when the shit really hits the fan. If that’s the case, though, then why didn’t Tsipras resign with him?

      • infovore says:

        As I recall, Varoufakis had said he’d quit on a yes vote. And the story on his own blog (referenced by Vance) is that he was forced to leave, in order to make negotiations easier.

      • MacK says:

        He was apparently forced out. That said, in the course of the referendum he made a number of predictions as to what was going to happen after a glorious no vote, most of which will not, and he can be out of the way when that happens.

      • Murc says:

        I suppose its possible that Syriza really does think they can try one last negotiation after the vote, and thinks that not having Varofakis in the room will help things. That’s about the only way I can make sense of this anyway.

        Owing to people here and other places, I’m really coming around to the notion that a lot of what Syriza is doing is politically restrained by the schizophrenia of the Greek electorate being simultaneously anti-austerity and pro-euro/EU, and that Tsipras feels he needs to demonstrate to them he tried every single thing he could to get the troika to stop putting the boot in. Because that makes everything make a lot more sense.

        Because it isn’t like Varoufakis is completely indispensable in his own skin.

        • sonamib says:

          And I’m coming around to the notion that Syriza did lots of things (not just *some* things) incompetently. Still, these weren’t the issues that the Troika disliked. The Troika said it lots of time, I’ve read it in various mainstream newspaper, what they really wanted was Greece agreeing to privatisations, labor market and pension “reforms”, and not to raise business taxes. That’s what they were insisting on, not the incompetence of the Syriza government in handling tax evasion and corruption.

          Seriously, in a parallel world where the Troika only wanted to fight corruption, I’d be totally down with them. In the meantime, I value anti-austerity more than I value anti-corruption. Here I’m a little influenced by my experience of Brazil, where the anti-corruption crowd is the same as the fuck-the-poor crowd. That’s because they think right-wing governments are axiomatically non-corrupt.

          • Lee Rudolph says:

            where the anti-corruption crowd is the same as the fuck-the-poor crowd. That’s because they think right-wing governments are axiomatically non-corrupt.

            Really? Because I’m sitting here in Luxembourg (specifically, in Remich, across a street from the Moselle) where I just came back from sitting in silently at a coffee-break conversation among a couple of Italians and a possible Slav wearing his name-tag wrong way around, at which the concensus seemed to be that the Euro-elite—including for this purpose Berlusconi (though it pains me to put his name anywhere near “elite”) and most of the gang in Luxembourg (the city)—both think and act on their belief that right-wing governments (viz., themselves) are axiomatically corrupt, and that’s exactly what they should be.

            • sonamib says:

              Well, that’s why I said Brazil. Seriously, in February-March there were lots of Aécio Neves partisans (the right-wing candidate for the 2014 election) out on the streets. They wanted to impeach Dilma Rousseff (the current left-wing president) because according to them Dilma’s party is the most corrupt of all and must be removed from office.

              Of course, when the centre-right president Fernando Henrique Cardoso privatised lots of big public companies, selling them at a discount to his cronies, those anti-corruption activists were nowhere to be seen.

              But yeah, this state of affairs might be very different in Luxembourg or elsewhere.

  14. Steve LaBonne says:

    Deleted due to borked link

  15. j_kay says:

    Andrea Merkel has resurrected the evil German Empire using the (rightly) debt-laden eurosouth as excuse for empire. She gave ireland better deal than Greece. Even though she added debt after the crisis. That’s why she doesn’t want Eurobonds – they’d let her empire off the hook .

    .Greeks, stupidly, don’t want out of the Euro. Even though Krugman’s right that it’s the best way for them, and best escape.

    Oppressive empire’s back in the worst way everywhere Gilded Age is, including the US.


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