So sure there is a crisis, but let’s name it for what it is. The crisis is that Germany and the EU cannot accept the democratic right of a sovereign state to reject neoliberal economics. That’s what all this is about.

Not quite how I would describe Greece Ritchie. For example, what’s neoliberal about the euro, the cause of all of this?

58 thoughts on “Hmm”

  1. Sure, Greece can and should reject the (actually corporatist) EU model … but which part of Greek democracy gives it the right to require others to pay its bills?

    I suspect the Greeks didn’t understand what they were voting for and were badly misled by Syriza but will end up with the right result: Gexit!

  2. Well, the old Quakers ran up huge debts and then stuck two fingers up at their creditors, so entirely consistent there.

    Oh, wait.

  3. Ritchie has posted a sample from the Joy of Tax. It really is going to be dire if that’s the standard.

  4. “neoliberal” as ever in the speech of a certain kind of statist these days can be translated as “stuff I disagree with”

    As far as I can see the Greeks have voted not to repay the debst they’ve run up on the terms offered. They also expect not to have to face the consequences of default, such as currency devaluation, higher interest rates, more difficulty in borrowing and so on. In essence they’ve voted for the right to keep their hands firmly in Germany’s pocket and for no-one to say that’s wrong.

    The degree of delusion on the left about the root causes of the #Grisis (eurgh) is amazing. The earnest, well-meaning but muddle-headed Left (bless ’em) has spent twenty years telling anyone who dared to point out that the Euro is going to fail that their views are anti-European, xenophobic and racist. Now that it’s actually failing the pantomime villain being wheeled out is capitalism and ooooooooh, boo hiss those nasty bankers again.

    How many times does socialism have to fail before the solution stops being “try it again, only harder this time”?

  5. The Greeks are suffering from the misdeeds of prior governments, but that is all part of democracy, and where did that idea come from?

  6. Bloke in Germany

    Greece should leave the euro now, then they will be bathing in caviar within days, won’t they.

  7. Well, dick, the real challenge is for you, Balls and Brown to get off your pontificating arses and lay out clear tactics and a strategy for Tsippy to follow.

    Can there ever be a better test case for your ideas?

    Here we have a socialist party in power in a country on its knees and bankrupt.

    Show us exactly – and I mean EXACTLY- how said socialist party can restore the economy by the invincible power of the kerajus State.

  8. “the democratic right of a sovereign state to reject neoliberal economics”

    Does that remind anyone else of the Nazis fulminating against “Jewish physics”?

  9. Matthew,

    Not entirely. Economics is often a prescription for what we should do in a given situation, as well as a description of what that situation is.

    As such, it is logical that you could reject the “neo-liberal” prescription*. You might not be making the best choice but, well, since when has politics been about that?

    * Not that the Troika proposals, which are no longer on the table anyway to be accepted or rejected, are actually neo-liberal, in so far (as has already been said) that ‘neo-liberal’ actually means anything.

  10. @BiG

    Greece should leave the euro now, then they will be bathing in caviar within days, won’t they.

    Blimey BiG – you are having a rare off day.

    Has anyone said this, or even close to?

    Greece is in for a world of pain, come what may. Real people will really suffer.

    But redenomination may ultimately prove better for them than limping along in a common currency for which they have always been unsuited.

    This is not the same as drowning in caviar.

    The Euro has always been misconceived and was always guaranteed to cause precisely the above pain.

  11. I shall be very disappointed in him if Vlad Putin has not already printed lots of new currency for Greece.

  12. “By the way, what happens if the Greeks just print bokoo euros?”

    Chaos.

    With people checking for serial numbers starting with Y….

  13. @Interested,

    I really do not buy the “Euro has fucked Greece” argument, I really don’t. Greece has fucked itself up repeatedly over the course of its history, without the need of other parties to intervene.

    The Euro is supposed to make Greek products (especially holidays for fat Germans) too expensive. In which case they can cut their prices, can’t they, and compete like everyone else does rather than relying on the government devaluing the currency again. It’s also a total bollocks contention, as proven by the fact that the Greek tourist industry broke records in 2013, then in 2014, and was on course to do so this year – now – who knows?

    If Greece needs a new currency (as looks likely) their easiest practical solution is in Switzerland, not Russia. I believe the Swiss keep a secret new currency design, with banknotes all printed ready and waiting, which would be launched in the event of mass counterfeiting of Swiss banknotes. There’s no reason they couldn’t sell that issue to Greece and start using them as Drachmas. Actually, Switzerland might love to share their currency with Greece for real at the moment.

  14. I have to give Tspiras some credit! He has gambled that the cabal of criminals that run the EU gravy train cannot afford to allow the Euro to break up or permit any falloff in the pace or change in direction of European integration. He has called their bluff – what will they do now?

    If Greece reinstitutes the drachma what is to stop Holland or Finland (on one side) doing the same or Spain and Italy (on the other) being forced out? Ironically, Murphy’s phrase ‘The emperor has no clothes’ is rarer than a Live Dodo – he actually has it right (that small snippet) – however, the rest of the analysis is nonsense on stilts.

    Apparently the magic money tree from the German taxpayer should be extended if the Greeks elect people like Richard Murphy and Owen Jones – Sorry Murph – I am seriously hoping they expel them from the eurozone – just so that the warning can be delivered. If you elect people of near pensionable age who are stupid enough to believe in socialist economics, you have to expect to be impoverished. The ‘No’ voters have basically said they want the Northern Europeans to keep funding their rackets as long as they want them to do so – I’m fairly sure electorates in Holland, Germany and FInland will make clear to the EU Leaders just what they think of the Greek vote…..

  15. Noel

    Ouch – turgid in the extreme but translated my first point is it implies welfare benefits should be taxed (a pound is a pound) – Nice to see the LHTD grinding the faces of the poor. How Green of him? Tim – check out the second post on TRUK currently (11:24 BST)

  16. BiG

    You raise a really good point on them lowering prices to increase competitiveness BUT unfortunately the experience of Euro conversion across the board has been huge price rises – recent converts like Malta, Cyprus, Slovakia, Estonia et al have all reported huge price rises and I think the belief is that the price across the Eurozone should be uniform. Idiotic and economically illiterate perhaps but commonplace.

  17. Face it Biggie–your dream of a Eurotrash paradise (where unelected twats dictate every aspect of life down to the smallest detail) is dying. The great dinosaur struggles and groans but the bright meteor-light gets ever closer.

  18. The ‘No’ voters had no stake in the referendum. Their vote was a statement.

    Now, they starve with dignity, rather than just starving.

  19. @BiG

    I really do not buy the “Euro has fucked Greece” argument, I really don’t. Greece has fucked itself up repeatedly over the course of its history, without the need of other parties to intervene.

    I agree that Euro membership alone wasn’t a sufficient condition for the current crisis to develop, but it was I think a necessary one.

    When Greece was just another small mediterranean economy, nobody much cared if they went bust. Now they’re on the verge of starting the process that might take the whole world economy down.

    This is the essence of my own anti-EU sentiment, really. They insist on developing these grands projets, while forgetting human nature – which as well as bravery, innovation, ingenuity, selflessness and honesty conains all of the reverse facets.

  20. In a nice ‘plague on both their houses’ piece in the Tele the other day, Janet Daley came up with this nice quote:

    “To the extent that they have had any involvement – or culpability – in this matter, the Greek people must come to terms with the consequences of electing Russell Brand to head their government.”

  21. Applying the logic used in the recent UK elections, less than half of Greek voters chose to say No.
    What democratic legitimacy does the vote possess?

  22. BiG:

    “In which case they can cut their prices, can’t they, and compete like everyone else does rather than relying on the government devaluing the currency again. It’s also a total bollocks contention, as proven by the fact that the Greek tourist industry broke records in 2013, then in 2014, and was on course to do so this year – now – who knows?”

    Nothing to do with the Euro devaluing then?

    Jesus.

  23. By 2013 the budget of the Ministries for Antiquities and Tourism had halved from their peaks. And tourism reached record numbers that year and in ’14.
    Of course you’d be a neo-liberal fool to assume a causal link, and that the excessively high budgets for these departments were keeping the tourists away.

  24. Bloke in Germany

    @Jack C, what is your point? The euro has lost a fair bit of value this year. Did that help Greece? No.

    @Van Patten, how does everyone raise prices in tandem in a competitive market economy?

  25. “Show us exactly – and I mean EXACTLY- how said socialist party can restore the economy by the invincible power of the kerajus State.”

    Well, Johnny Boy, let’s start with these bits:

    1) Reduce tax evasion from 45%-50% to, say, 10% of taxes assessed. Socialists love collecting taxes, don’t they Johnny?

    2) Reform the government and civil service to reduce corruption. Greece is now tied for 69th (out of 175 nations) in terms of governmental corruption. Socialism isn’t so hot on corruption, but at least Tsippy could take a stab at it.

    3) Adopt OECD’s recommendations for reducing unnecessary administrative (i.e., compliance) costs for business. When a bunch of Euroweenie bureaucrats are telling you you’ve gone overboard on admin, brother, you’ve gone overboard on admin.

    4) Reduce Greece’s pension costs from 16% of GDP to around 8% of GDP, and get those pension costs fully funded. That way you don’t have to grovel in front all those Germanic capitalists.

    5) Take steps to help businesses increase worker productivity. Greece’s is about 60% of the EU average, and amongst the lowest in Western Europe. Asking a Socialist to increase worker productivity is patently absurd, but what the hell, I can use the laugh.

    How’s that, Johnny Boy? And note that there isn’t anything listed that hasn’t been brought up by the EU for Greece to act upon over the past couple of decades.

  26. If you have to bribe public officials to actually carry out your duties, no wonder you are reluctant to pay taxes – you have, in effect, paid them already, albeit without a receipt.

  27. There’s only one way to settle this argument: split Greece in two. Half stays in the Euro, half goes back to the Drachma. Any other option will leave everyone arguing about hypotheticals for decades.

  28. BiG,
    My point, fairly obviously, was that devaluation of the Euro had helped Greek tourism.

    Your argument was that Greece didn’t need devaluation, offering tourism growth as an example.

    See?

  29. I notice that the budget in 2013 for the Ministry of Antiquities & Culture or whatever the current term is had halved from its peak, and that tourism hit record number in ’13 and ’14.
    Of course you’d be a fool and a neo-liberal to assume a causal relationship and that they should halve the budgets again and really get the tourism part of the economy going.

  30. Bloke in Germany

    @JackC, Greece gets most of its tourists from elsewhere in the eurozone, against which it cannot devalue while it remains in the Euro.

  31. BIG,

    Doesn’t matter where Greece gets most of its tourists from; it matters where most of the increase in tourism came from.

    It’s a pretty uncontroversial statement that a country gets more tourism when its currency becomes cheaper, isn’t it? You’d hope it was, round here. When something gets cheaper, people buy more of it. No, really.

  32. @BiG,
    The UK is Greece’s biggest tourism market.

    Also, as the Euro has slid, destinations within the EZ become relatively more attractive to those already within the EZ.

    It’s not difficult.

  33. “Your argument was that Greece didn’t need devaluation, offering tourism growth as an example.”

    Neither a devaluation nor more tourism corrects the structural flaws in the Greece economy (and government) that have brought this crisis about. Both would be more of a Band-Aid than anything else.

  34. @Dennis,
    I didn’t say it was the solution to all their problems, haven’t said that at all.

    Greece has huge flaws, not least endemic corruption, bribery, etc etc. You just couldn’t do business there.

    However, the Euro has undoubtedly made things worse, as everyone predicted it would (including the EU establishment, unless they really did think that EZ rules were just for a laugh).

    Greece has had overly-free access to money, and inappropriate interest and exchange rates.

    They way that the Greeks run Greece should have remained their problem. That’s all.

  35. BiG

    There’s evidence of some unofficial collusion, especially in an economy where low level corruption is as endemic as Greece. In addition, its simple capitalism. Something very similar happened in the UK when decimalisation or near compulsory metrication came in. People took advantage of consumers having little idea of what was going on to jack up prices.

    As for differing prices across the zone, I’d have to confess to not knowing why Greece continued (at least until a few years ago) being ruinously expensive to visit – Evidence of man’s irrationality I guess, maybe a sense of entitlement (cradle of civilisation and all that) – belief that they were more advanced than their neighbours (Bulgaria and Turkey) Either way their prices were more expensive arguably than Germany until very recently.

  36. Rob

    “Well, the old Quakers ran up huge debts and then stuck two fingers up at their creditors, so entirely consistent there.”

    If they did, the Quakers were no worse than anyone else at the time. Are you thinking of the modern quakers’ sentimental support of wholesale debt relief for the third world?

  37. On the radio today, trying to explain Greece – 6 months to open a business. 25 ways to buy real estate, none of them fast.

    There’syaproblem!

  38. The crisis is that Germany and the EU cannot accept the democratic right of a sovereign state to reject neoliberal economics.

    Hmm. My understanding is this is not what is happening at all.

    Its that Germany and the EU are telling a sovereign state that in needs to fix its finances or they simply won’t lend it any more money.

    Is he saying that Germany is less sovereign than Greece? That Germany has some sort of duty to keep lending while Greece has no countervailing duty to be a good debtee?

  39. I find it amusing that RM is now getting behind a governance model that turns a blind eye to blatant tax evasion, let alone avoidance. What happened to all those demands that the tax gap should be reduced, and that paying tax was the price you have to pay to be a citizen of a civilised nation?

    Does that only apply to the UK, not Greece?

  40. “Also, as the Euro has slid, destinations within the EZ become relatively more attractive to those already within the EZ.”

    Sorry mate this is nonsense on stilts.

    “Also, as the Euro has slid, destinations within the EZ become relatively more attractive to those outside the EZ.” is closer.

  41. re: the above – unless you’re arguing that the EZ members are priced out of non-EZ destinations, but impoverishing your people seems an odd business incentive.

  42. Imagine Richie et all’s reaction to a referendum in the UK cancelling our obligations towards the UN, for example, or the HRA. I’d hazard a guess it wouldn’t be a teary-eyed defence of democracy.

  43. I think we are close to Peak Ritchie. At that point maybe we can stop listening to the twat. He is not funny any more.

  44. Johnnydub,
    No, because a stronger Euro makes non-EZ destinations cheaper for an EZ tourist, As the Euro has slid, then the opposite happens.

    So not “nonsense on stilts”.

  45. My name is Lara. I live in Puerto Rico. Unskilled force? Is that your conclusion? Where do you get your fact. I have read the business section in the local newspaper, and I have read exactly the opposite, even from a German aviation company that set up shop here exactly because there were skilled people and universities to train them. That is ignorance talking. Inform yourself better. Seems very biased.

  46. My name is Lara. I live in Puerto Rico. Unskilled force? Is that your conclusion? Where do you get your facts? I have read the business section in the local newspaper, and I have read exactly the opposite, even from a German aviation company that set up shop here exactly because there were skilled people and universities to train them. Seems very biased.

  47. My name is Lara. I live in Puerto Rico.

    Good for you. Perhaps I might direct you to Tim’s PR thread on Forbes where you might feel a little more surrounded by fellow travellers* than you are about to be here.

    And, yes, comparatively to the local alternatives adjusted for cost differentials, which is (pace Ricardo) what matters, PR has an unskilled workforce. That’s not to say that everybody on PR is an inept moron, nor that every German is Alfred’s mechanic cousin.

    But, hey, go on and have a rant. We’re tolerant (ish) here.

    * Well, unless Arnald shows up.

  48. abcab asks a good question – “By the way, what happens if the Greeks just print bokoo euros?”

    I guess that would leave the eurozone with no alternative than to declare war, and if necessary shut down the mint by force.

  49. Even more amusingly, what if they print a great ruck of them, and unload them into the waiting arms of the Greek public without any warning.
    (Particularly if they duplicate serial numbers from other countries).

    It would probably kill the euro in short order, but might well inflate away Greece’s banking crisis in the process…

  50. It would be odd if they’d smashed the presses, presses being multi-functional and valuable.

    Possibly smashed the plates, but wouldn’t they be printing “New Drachma” anyway, and so need new plates?

    Anyone know how long it takes to make plates? Probably not very long these days; aren’t they all photo-produced (or would Greece still have them individually engraved)?

  51. “But, hey, go on and have a rant. We’re tolerant (ish) here.

    * Well, unless Arnald shows up.”

    And don’t forget Ironman and his trusty Scooter…

  52. @Machiavelli: thats nonsense on stilts, as the Bank of Greece has a print factory to produce €10 notes, and has been doing so for the last decade or more. It is one of the official eurozone note producers. They may have smashed the plates to print old style drachma, but thats hardly the end of the world. New plates to new designs can soon be made. If the Greeks want to print whatever they like, euros or drachma, I bet they can.

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