Debt-Laden Greece Hands Control to the Far Left
Isn’t that what caused their problem the first time?
The economy of Greece has been a disaster for years due to massive entitlement and pension programs. Decades of overspending finally caught up with the Greek government in 2010, when their financial system nearly collapsed.
Other countries in the European Union, notably Germany, loaned Greece billions on the condition that Greece would impose austerity measures; those measures eventually produced small results at a slower rate than expected.
Frustrated with austerity and cuts to benefits, the people of Greece recently elected a new prime minister from the far left Syriza party named Alexis Tsipras.
Tsipras won by promising to end the pain of austerity and to renegotiate Greece’s debt, which means that the people of Greece have forgotten what caused their problem in the first place.
Nicholas Paphitis of the Associated Press via ABC News writes:
Greece’s First Radical Left Prime Minister Sworn In
Tieless and eschewing the traditional religious swearing-in ceremony, but with a surprise coalition deal in the bag and a sanguine international reception, radical left leader Alexis Tsipras took over Monday as austerity-wracked Greece’s new prime minister.
Hours earlier, the 40-year-old’s Syriza party trounced the outgoing, conservative government in Sunday’s national elections, on a platform of easing social pain and securing massive debt forgiveness.
Although Syriza fell tantalizingly short of a governing majority in the 300-seat parliament, Tsipras moved quickly Monday to secure the support of 13 lawmakers from the small, right-wing populist Independent Greeks party, raising his total to 162.
“”We have the required majority,” Tsipras told Greek President Karolos Papoulias, shortly before being sworn in as prime minister, the youngest Greece has seen in 150 years and the first incumbent to take a secular oath rather than the religious one customarily administered by a Greek Orthodox official.
Fans of Tsipras are celebrating, but his victory presents a whole new set of problems.
From the Wall Street Journal:
Syriza Win in Greek Election Sets Up New Europe Clash
Greek voters handed power to a radical leftist party in national elections on Sunday, a popular rebellion against the bitter economic medicine Greece has swallowed for five years and a rebuke of the fellow European countries that prescribed it.
With nearly all votes counted, opposition party Syriza was on track to win about half the seats in Parliament. In the wee hours of the morning, it clinched a coalition deal with a small right-wing party also opposed to Europe’s economic policy to give the two a clear majority.
“Today the Greek people have written history,” Syriza’s young leader and likely new prime minister, Alexis Tsipras, said in his victory speech late Sunday. “The Greek people have given a clear, indisputable mandate for Greece to leave behind austerity.”
Greek stocks fell by more than 3.5% on Monday but wider market reaction to the result was largely muted. The euro traded slightly higher against the dollar in early European trading.
Not everyone is skeptical. Paul Krugman of the New York Times is delighted:
Ending Greece’s Nightmare
Alexis Tsipras, leader of the left-wing Syriza coalition, is about to become prime minister of Greece. He will be the first European leader elected on an explicit promise to challenge the austerity policies that have prevailed since 2010. And there will, of course, be many people warning him to abandon that promise, to behave “responsibly.”
So how has that responsibility thing worked out so far?
To understand the political earthquake in Greece, it helps to look at Greece’s May 2010 “standby arrangement” with the International Monetary Fund, under which the so-called troika — the I.M.F., the European Central Bank and the European Commission — extended loans to the country in return for a combination of austerity and reform. It’s a remarkable document, in the worst way. The troika, while pretending to be hardheaded and realistic, was peddling an economic fantasy. And the Greek people have been paying the price for those elite delusions.
Where Mr. Tsipras is going to find the money to reinstate Greek benefits remains to be seen, but the European left has been reinvigorated by his win:
First we take Athens, then we take Madrid @Pablo_Iglesias_ #syriza #ekloges2015 #ChangeEurope #Podemos @europeanleft pic.twitter.com/ZQ413PwDQn
— a.tsipras (@atsipras) January 22, 2015
Good luck, Greece. You’ll need it.
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Comments
It doesn’t help that the EU basically selected earlier Greek PMs as if Greece was an administrative area of an EU Empire.
Nor does it help that the entire Greek economy is entirely dependent on the government. Greece *needs* a crisis to change public opinion and recover. Unfortunately, even that won’t matter because there is almost no free speech in Europe. Certainly no political commentators to push a liberty-based economics.
Hey, if Kwaaaazy Krugman (advisor to Enron) loves this guy, Greece is simply doomed.
Actually, since the idiots elected him, they’re doomed.
“That which cannot continue, won’t”.
But the voters of Greece just said, “Let us eat cake!”
With 50% unemployment among 20 somethings – Greece is done. This is a country where people spend decades apprenticing. So, these people will never have skills and jobs. The Greek economy will languish for decades.
Greece will have to leave the Euro and is just positioning so they can stick the EU with the bill.
And the creditor nations of the EU are hiding their wallets and adjusting their chastity belts in anticipation of the “sticking”.
The Collective is about to claim another corpse.
It will be interesting to see how the new government manages to spend other people’s money when most of it is already gone.
I understand that Obama managed this feat, but the Greek Drachma hasn’t ever been exactly a reserve currency like the dollar.
“… the Greek Drachma hasn’t ever been exactly a reserve currency like the dollar USED TO BE.”
There, fixed it for you.
He will be the first European leader elected on an explicit promise to challenge the austerity policies that have prevailed since 2010.
Oh, right. He’ll open the gates and spend and spend and spend other people’s money regardless of income, until the economy collapses and there’ll be no one left but God to provide. Welcome to Venezuela. And never let a good crisis go to waste.
Venezuela 2.0. Except without any export to generate cash. Venezuelan collapse took 15 years since they had oil money coming in. Greece will take less than 5 years to roil into anarchy.
18 months .. tops
Will Albania take over running Greece as a protectorate? Or, will Kosovo annex Greece and become the black-hole of the Balkans?
Be careful using media labels of “radical left” and “far left”. Remember, the media are the same folks who call the Tea Party “far right” and “extreme right” even though nothing could be further from the truth.
I have fallen into the trap of using the media’s preferred labels about Tsipras, too. But from what I can tell, Tsipras primary goals are: 1) renegotiating the public debt and 2) balancing the budget. And he is dangling the possibility of exiting the Euro as leverage to help him achieve his goals.
Restructuring debt isn’t left wing. Every day companies file for Chapter 11 bankruptcy protection to restructure their debts. And balancing the budget is a conservative idea.
I’m leery of using the media’s preferred labels to describe him because if Tsipras is successful after being called “radical left” by the media, then it’s a way to turn public opinion in favor of “radical leftism” – even if the actual policies he implements are not radical left. If that makes sense.
“Restructuring debt isn’t left wing”
Tsipras agenda includes raising the minimum wage and reinstating collective bargaining (a la Wisconsin) for public employees whose pension demands is a major feature of Greece’s debt.
Hmmm…
Didn’t Pres. ScamWOW PROMISE to address entitlement spending and balance the budget…???
Why, yes. Yes, he DID. Haven’t seen any progress on that. You?
“Restructuring debt” in a Chapter 11 involves putting your business in a receivership overseen by a Federal court. It involves a plan all the interests pretty much agree to in most cases.
We will see what Grecian pols mean by “restructuring”, but I bet it will involve a heavy component of “walk away from any hope of us paying you back” and/or pure fantasy about future ability to service the debt.
Our mass media don’t use the term “radical left” for anyone over here. They describe the far left as “liberal activists” or “progressives.” For the most part (unless you’re actually blowing things up), you have to be a conservative to be called “far” or “extreme” or “radical.”
It’s hard to believe that the same media would describe a moderate Greek reformer as “radical left.”
Restructuring debt isn’t left wing.
You forget that a couple of years ago, the Samaras government ‘restructured’ the living hell out of the Greek debt, sticking creditors right and left with unagreed haircuts and promising, oh so sincerely, to stick to fiscal probity until the silly lenders got their shrunken Euros back.
So, who’s Mr. Tsipras gonna stick first?
Greek voters are living in a dream world in which they can go back to the profligate spending they enjoyed. Debtors seldom get to choose their fate. Creditor banks have the money and he who has the money generally calls the tune. If Greece returns to its free spending ways, it won’t take long for it to default and become unable to obtain any foreign loans or bailouts. One question left unanswered is whether the right wing party that Tsipras had to turn to for a majority will long support his policies or direction. Perhaps another election is the offing soon?
The Greeks have yet again demonstrated to us why the Founding Fathers opted for the Checks and Balances of Roman Republicanism versus the unchecked self defeating populist rule of Athenian Democracy.
What a sorry reminder of the civilization that gave us Socrates and Aristotle.
Plato warned them about pure democracy many years ago.
It was in his first SOTUS, right?
It is like watching a rerun of the obama admin these last six years when I read about Greece’s problems with overspending. If we left it up to the left in this country we would have the same end results of being totally broke. What is it about leftists that make them so optimistic that they think that the money will always be there?
” If we left it up to the left in this country we would have the same end results of being totally broke.”
Unfortunately, leaving it up to the *right has the same result.
*right being defined as the current crop of R leadership, which are not really “right”. We simply have a ruling class, with a d and r faction. Spit.
Which Dem politician was it who said not long ago, “We have plenty of money; it’s just that the government hasn’t gotten it yet”?
If the Greeks are self-sufficient, then print the money, and destroy the external value of the currency. Perhaps they need another currency for outside trade.
That said, there will be explicit and implicit redistributive change.
Utopia or perhaps just a “reset”.
Greece is just the tip of the iceberg. Ireland, Portugal and Spain are WAY down the same road. Italy is moving the same direction.
An economy based on salaries paid to government workers is not sustainable…unless every nation on the planet is run the same way. Thus Europe is not able to compete with China, the US, Russia and other countries in various spheres: economically, militarily, culturally, in innovative technology and so on.
I appreciate that Greeks are free to vote for the government they want, but even more, I appreciate that they will soon provide another big pile of concrete evidence that socialist economic theories do not work.
But the damned thing is that “evidence” only counts to those who live in reality.
Collectivism ONLY exists via the embrace of delusion and lies.
Comrade, I do not seek to convince the Collectivists. I seek to destroy them. Hasta la revolución! До Революции !
Collectivism ONLY exists via the embrace of delusion and lies.
Oh, it works while there’s still a national treasury to loot, viz. Venezuela. But sooner or later you have to pay the workers. Then when the till runs dry, Νιστικό αρκούδι δεν χορέυει.
The economy of Greece has been a disaster for years due to massive entitlement and pension programs.
Not to mention the shameless enthusiasm by which the Greek government entered the EU by endorsing its regulations on deficit spending by member nations, and then proceeded to cook its books and vastly exceed its borrowing limits at the expense of the suckers who lent the money. It was a classic case of southern Europeans gaming the system for their own benefit, and to hell with the naïve lenders who thought the EU was led with sufficient concern for fiscal propriety.
And not to mention the immense patronage scams whereby those with government jobs all worked diligently to add all their relatives to the public payrolls. There’s one result of those ‘massive entitlement and pension programs’.
From a Financial Times article:
Greeks Stop Paying Taxes in Expectation of Syriza Poll Victory.
“A finance ministry official confirmed on Friday that state revenues had collapsed this month. … two private sector economists forecast the shortfall could exceed €1.5bn, or more than 40 per cent of projected revenues for January.”
Also, there is evidence of outflows from Greek banks.
http://www.zerohedge.com/news/2015-01-25/greek-deposit-outflows-soar-run-syriza-victory
Finally, it is interesting that bank exposure to Greek debt has been reduced. A lot. The debts have been shifted to the public, according to this.
http://globaleconomicanalysis.blogspot.com/2015/01/revised-greek-default.html
The insane must first recognize that they are not normal before effective change can take place. That will not happen until like dope addicts they hit the very bottom and fail completely.
Screw ’em. Let them commit suicide.