If you here the conventional wisdom of the EU pundits Greece is a parasite on German industriousness, etc. If this is so it should be easy to let Greece go. This indeed is a very common narrative you are hearing whether you read Sumner or watch CNBC.
Of course, the question begs: what took Germany so long to get rid of Greece? Supposedly the 'childish antics' of Tsipras have finally pushed Angela Merkel too far.
http://diaryofarepublicanhater.blogspot.com/2015/07/a-no-vote-for-greeks-may-just-be-free.html
Folks like Sumner, et. al, never tire of cataloging all of Greece's supposed sins. A new piece at CNBC goes through Greece's Original Sin-lying to get into the euro.
"This Greek problem happened because, one day a few years ago we had a rounding problem. They said they had a 5 percent deficit and it was 15 percent. We've been struggling with the problem ever since."
"Greece's government admitted in 2004 that it had under-reported the country's budget deficit figures when it applied to joined the euro zone."
http://www.cnbc.com/id/102808101
Yes, but what about the Germans? They were let in despite also failing to meet the budget rules. Actually consider what the Germans were saying 4 years ago. Back then they felt they had the Greeks-and the Italians-by the balls:
"The nature of these meetings is that the hallway chatter is always more interesting that the formal program. Part of the reason why is that, particularly when talking to journalists, the businesspeople or politicians tend to regard those conversations as off the record. So I’ll abide by that here. One of the German execs was a consultant, and the other headed what I’ll call a quasi-official German organization."
https://thefaintofheart.wordpress.com/2015/07/02/germans-we-have-them-greeks-and-the-other-lot-by-the-balls/
Yes, the joys of inside baseball. Seriously, I'd love to be a fly on the wall-and this reporter was.
"They were slightly irritated by the pessimism I’d expressed earlier in the day. “Don’t you realize,” one of them said, “that the cost to us (Germany) of bailing out Greece is far less than it cost us to reintegrate East Germany after the wall came down in 1989?”
"I almost choked on my croissant. Yes, I replied, I am aware of that. I lived and worked in Berlin as a journalist in the mid 1990s, when that very painful (economically speaking) process was taking place in Germany. But doesn’t that, I said politely, rather beg the question: Germany integrating their brethren, who’d been isolated and impoverished during the cold war, was a dream come true, whatever the cost. Germans, on the other hand paying to bail out Greece is, to average German, rather the opposite of a dream come true, is it not?"
"He waved me off. No no, he said, it will be taken care of. The Germans, he said, understood how beneficial to them membership in the euro zone has been. Without it, the gentleman said, the value of the Deutschemark would be 50% or 75% higher than it is under the euro. “German industry would be wiped off the map.”
Of course, the question begs: what took Germany so long to get rid of Greece? Supposedly the 'childish antics' of Tsipras have finally pushed Angela Merkel too far.
http://diaryofarepublicanhater.blogspot.com/2015/07/a-no-vote-for-greeks-may-just-be-free.html
Folks like Sumner, et. al, never tire of cataloging all of Greece's supposed sins. A new piece at CNBC goes through Greece's Original Sin-lying to get into the euro.
"This Greek problem happened because, one day a few years ago we had a rounding problem. They said they had a 5 percent deficit and it was 15 percent. We've been struggling with the problem ever since."
"Greece's government admitted in 2004 that it had under-reported the country's budget deficit figures when it applied to joined the euro zone."
http://www.cnbc.com/id/102808101
Yes, but what about the Germans? They were let in despite also failing to meet the budget rules. Actually consider what the Germans were saying 4 years ago. Back then they felt they had the Greeks-and the Italians-by the balls:
"The nature of these meetings is that the hallway chatter is always more interesting that the formal program. Part of the reason why is that, particularly when talking to journalists, the businesspeople or politicians tend to regard those conversations as off the record. So I’ll abide by that here. One of the German execs was a consultant, and the other headed what I’ll call a quasi-official German organization."
https://thefaintofheart.wordpress.com/2015/07/02/germans-we-have-them-greeks-and-the-other-lot-by-the-balls/
Yes, the joys of inside baseball. Seriously, I'd love to be a fly on the wall-and this reporter was.
"They were slightly irritated by the pessimism I’d expressed earlier in the day. “Don’t you realize,” one of them said, “that the cost to us (Germany) of bailing out Greece is far less than it cost us to reintegrate East Germany after the wall came down in 1989?”
"I almost choked on my croissant. Yes, I replied, I am aware of that. I lived and worked in Berlin as a journalist in the mid 1990s, when that very painful (economically speaking) process was taking place in Germany. But doesn’t that, I said politely, rather beg the question: Germany integrating their brethren, who’d been isolated and impoverished during the cold war, was a dream come true, whatever the cost. Germans, on the other hand paying to bail out Greece is, to average German, rather the opposite of a dream come true, is it not?"
"He waved me off. No no, he said, it will be taken care of. The Germans, he said, understood how beneficial to them membership in the euro zone has been. Without it, the gentleman said, the value of the Deutschemark would be 50% or 75% higher than it is under the euro. “German industry would be wiped off the map.”
So while the Germans kvetch about Greece the cost of a 'bailout' is not so bad-they went through far worse with reunification-it was just-very-different politics.
However, when you hear this frank admission of how much Germany gains from having Greece on the euro you have to question this idea of Greece as the parasite who has the most to leave from a Grexit. However as Germany benefits from the cheap euro thanks to Greece-and Italy-how much cheaper would the Drachma be?
"Here was my ‘choking on my croissant’ moment number two. Most economists would agree with what my friend at the meeting had said; but he seemed either oblivious (not likely) or simply unconcerned (more likely) with the flip side of what he had just uttered. Italy, to take the third-largest economy in Europe, one with a sizeable and modern industrial base, is stuck with a currency — the euro — which is stronger than the old lira would be under current circumstances. But membership in the euro zone means Italy can’t devalue to bring some relief to its exporters."
"I pushed back politely. Look, I said, it’s not Greece I’m worried about. It’s Italy. Third-biggest bond market in the world. Bond spreads this morning again heading over 7%(before the ECB intervened this to push them back down again.) Too big to fail, too big to save. Is the government, even one under a new Prime Minister, going to push through sufficient austerity to avoid a default?"
"Now the consultant perked up, speaking what he too believes to be the unvarnished truth. They have to, he said, because “to be blunt about it, we have them [both the Greeks and the Italians] by the balls.”
"I pushed back politely. Look, I said, it’s not Greece I’m worried about. It’s Italy. Third-biggest bond market in the world. Bond spreads this morning again heading over 7%(before the ECB intervened this to push them back down again.) Too big to fail, too big to save. Is the government, even one under a new Prime Minister, going to push through sufficient austerity to avoid a default?"
"Now the consultant perked up, speaking what he too believes to be the unvarnished truth. They have to, he said, because “to be blunt about it, we have them [both the Greeks and the Italians] by the balls.”
Yep-We have them by the balls. Does that sound like a victim of a parasite? This comment of 2011-but the attitude hasn't changed-by the Germans proves my point in my previous post that for the Greeks defying Germany and the EU is an economic free good.
http://diaryofarepublicanhater.blogspot.com/2015/07/a-no-vote-for-greeks-may-just-be-free.html
P.S. I'm jazzed because I seem to finally have figured out how to fix the formatting when I cut and paste an article from a different place. I was just changing back the font before but that didn't always solve the problem. What I've learned to do during this post is actually remove the formatting of posts that I cut and paste.
In other good news the Knicks get Robin Lopez
http://www.sbnation.com/nba/2015/7/2/8817181/robin-lopez-free-agency-2015-knicks-contract-deandre-jordan
So someone wants to play for the Knicks.
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