The austerity policy being forced on Greece by Germany and the eurozone cannot command democratic consent over time
Posted on 02/12/2012 5:18:42 PM PST by bruinbirdman
The last time Germany needed a bail-out from world creditors, it secured better terms than shattered Greece last week.
The austerity policy being forced on Greece by Germany and the eurozone cannot command democratic consent over time
The US, Canada, Britain, France, Greece, and other signatories at the London Debt Agreement of 1953 granted Chancellor Konrad Adenauer a 50pc haircut on all German debt, worth 70pc in relief with stretched maturities. There was a five-year moratorium on interest payments.
The express purpose was to give Germany enough oxygen to rebuild its economy, and to help hold the line against Soviet overreach. This sweeping debt forgiveness caused heartburn for the British - then in dire financial straits, themselves forced to go cap in hand to Washington for loans. The Greeks had to forgo some war reparations.
Yet statesmanship prevailed. The finance ministers of the day agreed to overlook the moral origins of that debt, and the moral hazard of “rewarding” a country that had so disturbed the European order.
The Wirtschaftswunder whittled down the burden of German debts to modest levels within a decade. Germany emerged as a vibrant democracy and a pillar of the western security system.
Greece has less strategic relevance, and must comply with tougher terms.
The EU deal will in theory cap Greece’s public debt at 120pc of GDP in 2020 - at the outer limit if viability - after eight years of belt-tightening and depression, if all goes perfectly.
Since nothing has gone to plan since Europe’s austerity police began to administer shock therapy eighteen months ago, even this grim promise seems too hopeful.
The Greek economy was expected to contract by 3pc in 2011 under the original EU-IMF Troika plan. In fact it shrank by 6pc, and is now entering
(Excerpt) Read more at telegraph.co.uk ...
A bunch of whiners. Greece needs to cut spending. They need to spend less than they take in and not over tax their population in a vain attempt to raise “revenues”.
Like a great socialist snowball rolling down hill ... no way to stop it, just wait and watch it breakup upon impact at the bottom of the hill!
Name that ancient Roman Senator. ;)
So, Germany is going to have to buy a lot of salt? We've got salt domes here and we could sell salt.
/johnny
What a bunch of whiny garbage.
Greece got into this mess because they continually spent too much, made half the population public employees that got better salaries & benefits than private workers, and otherwise created a giant, bloated social welfare state. This is the fault of the Greek people, and the Greek people alone. They got into massive debt, debt that would obviously crush them at some point - and did nothing to stop the spending spree.
Greeks still have a choice. They can default and leave the Euro. They just don’t want to because, even now, they want to maintain the nanny state.
I have no sympathy for Greece. None. They got themselves into this, and they should count themselves lucky the EU and IMF are determined to bail them out almost no matter the cost.
Carthago delenda est?
“Carthage must be destroyed”.
I have a mind block right now but he was called the elder.
Learned this from my sixth grade educated Dad. Schools don't teach these pearls of wisdom anymore!
“Carthage must be destroyed”.
I have a mind block right now but he was called the elder.
That is it, Cato.
Two generations of deficit spending leads to non sustainable debt, poverty and a loss of sovereignty. No bailout will restore the squandered capital. Nor will the Greek people easily accept the austerity.But live with it they must. Fifty years of deficits now to be followed by fifty years of poverty,austerity and political instability.. Young and educated Greeks will be leaving en masse. Meanwhile our grinning president who refuses to cut spending announces his new federal budget with a built in 1.3 trillion dollar deficit.
I got stuck in a 7th grade latin class because some of the guys I hung around with were little hooligans. I was, of course, pure as the driven snow.
So, all of 6 us got to learn latin from the headmaster for 2 hours a day.
And had to memorize some speeches.
But I was innocent. Really.
/johnny
Compounding the situation, and greatly encouraging the Greeks’ intransigence, is the Greeks’ belief that avoiding their default and preventing a Greek exit from the Euro is viewed by the European ruling elite as an absolute priority, for both ideological reasons (quasi-religious attachment to the united Europe project) and out of fear for the effects on their own banks and economies. So in dealing with the European ruling junta of Merkel and Sarkozy, the Greeks actually are holding a few cards and they are very aware of it. Of course, they are all going to end up in the ditch in due course.
If Germany REALLY subjected Greece to a Carthaginian solution, they would be killing the men, transporting the more attractive women back hom to be sex slaves, and then repopulating the area with German colonists. I’m hoping it won’t really be necessary to come to that...
Apples and oranges Ambrose.
thank you...
“The last time Germany needed a bail-out from world creditors”
As for German debts, and Not counting the WWII debts, the last time before that had a lot to do with post-WWI “reparations” imposed by the French and English (while Wilson walked away).
Meanwhile, the Greek public debts have occurred during a peaceful and relatively prosperous time, for Greece and the EU.
Cato the Elder
See tagline.
Cato the Censor.
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