Greek referendum

[strichener]

The derogation from the deficit rule gave the impression that Greece had converged on the criteria when it hadn't. That's cooking the books.

"Gave the impression" to whom exactly?

[Ad Lib]

"Gave the impression" to whom exactly?

Most holders of Euros and financial products and government bonds denominated in Euros.

[strichener]

Most holders of Euros and financial products and government bonds denominated in Euros.

And yet the ruling was before the introduction of the single currency.

If the holders of these financial instruments cannot understand basic economic indicators then they really shouldn't be doing the job.

[Ad Lib]

And yet the ruling was before the introduction of the single currency.

If the holders of these financial instruments cannot understand basic economic indicators then they really shouldn't be doing the job.

This isn't complicated:

If they hadn't sought to convey the impression that, by the Eurozone's own proposed standards, Greece was a suitable founding participant when it wasn't, it wouldn't have been allowed to join. Creditors would have acted accordingly by not offering credit as cheaply and plentifully to Greece in the first place, no longer believing Greek bonds to be in a meaningful sense underwritten by the other participants. It was a form of deceit by convincing the markets that a Eurozone with Greece in it was a lot more stable than it really was, and countless derivative trade and investment and lending in Greece relied on that.

Greece joined the Eurozone with its eyes wide open. They had a decade to raise their retirement age, cut their public sector, trim their military spending and create an economy with stable employment and productivity.

Instead they bought brand new Volkswagens on credit.

[Fotbawmad]

Greece joined the Eurozone with its eyes wide open. They had a decade to raise their retirement age, cut their public sector, trim their military spending and create an economy with stable employment and productivity.

Instead they bought brand new Volkswagens on credit.

In that situation it's the enablers who you should be blaming.

[DeeTillEhDeh]

In that situation it's the enablers who you should be blaming.

What some people seem to forget is that Greece was a basket-case even before it joined the Eurozone.

However, the Eurozone has never been wholly about economics - it is, if anything, a political cuckoo with the trappings of economics.

[ICTChris]

Expect no end of conspiracy theories to pop up after this one.

Edit: 60 Euro withdrawal limits until the 7th.

VikingTon's going to be the man over there, providing he brings his Euros from Blighty.

There's no restrictions on foreign card holders.

VT, are you going over there to start a loansharking business?

[strichener]

What some people seem to forget is that Greece was a basket-case even before it joined the Eurozone.

However, the Eurozone has never been wholly about economics - it is, if anything, a political cuckoo with the trappings of economics.

Was it really? By which economic measures was Greece a "basket-case"?

[strichener]

This isn't complicated:

If they hadn't sought to convey the impression that, by the Eurozone's own proposed standards, Greece was a suitable founding participant when it wasn't, it wouldn't have been allowed to join. Creditors would have acted accordingly by not offering credit as cheaply and plentifully to Greece in the first place, no longer believing Greek bonds to be in a meaningful sense underwritten by the other participants. It was a form of deceit by convincing the markets that a Eurozone with Greece in it was a lot more stable than it really was, and countless derivative trade and investment and lending in Greece relied on that.

Greece joined the Eurozone with its eyes wide open. They had a decade to raise their retirement age, cut their public sector, trim their military spending and create an economy with stable employment and productivity.

Instead they bought brand new Volkswagens on credit.

It is obviously too complicated for you.

As far as I am aware, there were no back room deals over the Greek membership but perhaps you know otherwise. You continue to mention deceit without proof. Who was responsible for this deceit was it the Council with their decision to allow Greece to join or are you claiming that the financial data from 1999 was falsified? If so perhaps you can provide some detail rather than continuing with rhetoric.

Greece had already tightened budgetary and monetary policy to curtail inflation well before the 2000 ruling and entered the Euro with significantly less borrowings and a lower deficit than many countries that joined. As for the eyes wide open statement, this cuts both ways.

[H_B]

Must be absolute chaos there just now...

[strichener]

Must be absolute chaos there just now...

I imagine that everyone will take the day off work and go down at the car dealerships looking for their new VW.

Meanwhile back in the real world, I can not imagine the absolute nightmare that the Greek people are being subjected to. Politicians of all the involved countries and institutions should be ashamed of themselves.

[H_B]

Meanwhile back in the real world, I can not imagine the absolute nightmare that the Greek people are being subjected to.

I was just thinking back to the chaos of the petrol "crisis". People battering each other for a litre of unleaded.

This must be a thousand times worse.

[strichener]

I was just thinking back to the chaos of the petrol "crisis". People battering each other for a litre of unleaded.

This must be a thousand times worse.

I agree. It is far easier to do without petrol than it is regarding money.

[DeeTillEhDeh]

Was it really? By which economic measures was Greece a "basket-case"?

Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.

Greeks aren't very welcome in the Rue Alphones Weicker in Luxembourg. It's home to Eurostat, the European Union's statistical office. The number crunchers there are deeply annoyed with Athens. Investigative reports state that important data "cannot be confirmed" or has been requested but "not received."

Creative accounting took priority when it came to totting up government debt. Since 1999, the Maastricht rules threaten to slap hefty fines on euro member countries that exceed the budget deficit limit of three percent of gross domestic product. Total government debt mustn't exceed 60 percent.

The Greeks have never managed to stick to the 60 percent debt limit, and they only adhered to the three percent deficit ceiling with the help of blatant balance sheet cosmetics. One time, gigantic military expenditures were left out, and another time billions in hospital debt. After recalculating the figures, the experts at Eurostat consistently came up with the same results: In truth, the deficit each year has been far greater than the three percent limit. In 2009, it exploded to over 12 percent.

[strichener]

1/ Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.

2/ Greeks aren't very welcome in the Rue Alphones Weicker in Luxembourg. It's home to Eurostat, the European Union's statistical office. The number crunchers there are deeply annoyed with Athens. Investigative reports state that important data "cannot be confirmed" or has been requested but "not received."

3/ Creative accounting took priority when it came to totting up government debt. Since 1999, the Maastricht rules threaten to slap hefty fines on euro member countries that exceed the budget deficit limit of three percent of gross domestic product. Total government debt mustn't exceed 60 percent.

The Greeks have never managed to stick to the 60 percent debt limit, and they only adhered to the three percent deficit ceiling with the help of blatant balance sheet cosmetics. One time, gigantic military expenditures were left out, and another time billions in hospital debt. After recalculating the figures, the experts at Eurostat consistently came up with the same results: In truth, the deficit each year has been far greater than the three percent limit. In 2009, it exploded to over 12 percent.

I was wondering who would be the first to post about this.

1/ This happened in 2001, 2 years after the Greek economics figures were evaluated! Many governments (including our own) use the same mechanism for managing public debt.

2/ Which is the same issue as the EU has internally and why it cannot get it's own accounts signed off.

In regards to the third item, I will split this up

60% debt level

Question for you - Which 2 of the following countries has managed to have total government debt below 60% in any year since 2003? - Germany, France, Spain, Portugal, Austria, Belgium?

Surprisingly

Spain and Portugal. Eurostat Source

3% deficit

How many other countries within the EU have managed to either consistently or even over the last 4 years managed to stay under 3%? Eurostat

So by trying to show Greece as an exception you have actually shown it to be similar to many countries within the Eurozone. France (to use a larger country example) also fails the convergence and fiscal criteria.

Don't get me wrong in regards to finance, Greece has made many mistakes. The biggest was allowing itself to become part of the Eurozone.

[DeeTillEhDeh]

I was wondering who would be the first to post about this.

1/ This happened in 2001, 2 years after the Greek economics figures were evaluated! Many governments (including our own) use the same mechanism for managing public debt.

2/ Which is the same issue as the EU has internally and why it cannot get it's own accounts signed off.

In regards to the third item, I will split this up

60% debt level

Question for you - Which 2 of the following countries has managed to have total government debt below 60% in any year since 2003? - Germany, France, Spain, Portugal, Austria, Belgium?

Surprisingly

Spain and Portugal. Eurostat Source

3% deficit

How many other countries within the EU have managed to either consistently or even over the last 4 years managed to stay under 3%? Eurostat

So by trying to show Greece as an exception you have actually shown it to be similar to many countries within the Eurozone. France (to use a larger country example) also fails the convergence and fiscal criteria.

Don't get me wrong in regards to finance, Greece has made many mistakes. The biggest was allowing itself to become part of the Eurozone.

You asked for evidence prior to Eurozone membership that Greece was a basket-case - I gave it to you. Yes - there are other Eurozone members who one could say are in the basket-case category - however it's pretty clear that the Greeks had by far the worst economy prior to the Eurozone.

I agree that Greece should never have joined the Eurozone - but that I would argue back up my view that the Eurozone was not primarily an economic policy but a political vanity project for Germany and France.

[Alan Stubbs]

https://twitter.com/murdo_fraser/status/615494940970385408

[strichener]

You asked for evidence prior to Eurozone membership that Greece was a basket-case - I gave it to you.

What by quoting an event that took place after the Single Currency came into operation?

Or perhaps you class any economy that has a annual deficit over 3% and total debt over 60% of GDP as basket cases which would include vast swathes of the developed world.

[DeeTillEhDeh]

What by quoting an event that took place after the Single Currency came into operation?

Or perhaps you class any economy that has a annual deficit over 3% and total debt over 60% of GDP as basket cases which would include vast swathes of the developed world.

One that blatantly lies to enter the currency then takes no responsibility for its actions?

Yes the deal took place in 2001 but was a direct result of the Greeks lying about the state of their economy when they joined - the only way they could cover up the debt.

That's not to say that Greece should shoulder the burden of blame - Germany and France must have know the reality regards the structural issues with the Greek economy - but blithely ignored this because politically it was more important to have Greece in than out of the Eurozone.

[strichener]

One that blatantly lies to enter the currency then takes no responsibility for its actions?

Yes the deal took place in 2001 but was a direct result of the Greeks lying about the state of their economy when they joined - the only way they could cover up the debt.

That's not to say that Greece should shoulder the burden of blame - Germany and France must have know the reality regards the structural issues with the Greek economy - but blithely ignored this because politically it was more important to have Greece in than out of the Eurozone.

I'll ask you since Ad-Lib hasn't yet come through - Please provide the specifics of the lies that were told to be allowed to join the Single Currency.

So far the only thing that you have actually provided details for is a deal that took place after they were already accepted into the currency. The same is true for the miliatary spending that you previously referred to (although the change in classification took place in 2004) this lead to the government re-allocating spending based on when deposits were made for goods rather than when they were delivered. With the lead time in military hardware, this had the effect of front-loading the spending into years that the new Greek government was not responsible for. Even with this change, Greece's deficit on entering the single currency would have been 3.1% of GDP (against the 2.5% stated in 1999) which was still lower than many that adopted the Euro.

I would content that the blame should reside with the entire EU and not individual member states but agree in terms of political vs economic aims.