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Why are the Greeks so keen on the Euro?
jeffian
Posted: 14 July 2015 15:49:27(UTC)
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"A survey by pollster GPO last month showed that 56.2 percent of respondents preferred a “bad” deal with creditors than euro exit, while 35.4 percent said a return to the national currency would be preferable to more austerity."

Many of us who lived through "Black Wednesday", when the £ crashed out of the ERM, have experienced the strains and stresses of trying to peg the currencies of diverse economies to a fixed exchange rate and understand that, in its present form, the Euro is the problem for Greece, not the solution. Why, even when voting "against austerity", are the Greek people so wedded to the Euro? 'Grexit', the reinstatement of the drachma and devaluation would be painful in the short term - though probably no more so than what is going on now without an end in sight - and would set a floor under the Greek economy from which it could begin to grow again.

Any Greeks out there care to explain why the people persist in clinging to this currency which is strangling them?
4 users thanked jeffian for this post.
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Keith Hilton
Posted: 14 July 2015 18:23:53(UTC)
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jeffian;28386 wrote:
"...Why, even when voting "against austerity", are the Greek people so wedded to the Euro?


They've lost their marbles!
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chazza
Posted: 14 July 2015 20:08:14(UTC)
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Basically because Greeks see themselves as Europeans, and the Euro as the tangible symbol of their membership of the EU. Moreover, while Grexit would almost certainly be better for Greece in the long term, the government had no mandate to pursue it, and the short-term pain of a Grexit would be so great that no-one would willingly endure it. Quite aside from the fact that Grexit would entail the humiliation of accepting 'humanitarian aid' from Germany and others in the transition to a new currency.
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jeffian
Posted: 14 July 2015 22:22:01(UTC)
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chazza,
But that's what I don't understand. To take your points in order -
1) As shown by ourselves and 9 other EU countries, you don't have to be a member of the Eurozone to be a member of the EU
2) "while Grexit would almost certainly be better for Greece in the long term, the government had no mandate to pursue it". Why not? The referendum made absolutely no reference to staying in the Euro, it simply asked whether the voters accepted the terms offered by the Troika and they said "no".
3) "the short-term pain of a Grexit would be so great that no-one would willingly endure it". Possibly, but the choice is between short-term pain and long-term pain. The appear to have chosen the latter.
4) "Grexit would entail the humiliation of accepting 'humanitarian aid' from Germany and others in the transition to a new currency". What? As opposed to the humiliation of having your assets seized while the creditors tell you how to run your economy?

I don't get it. What do the Greek people think they're gaining by clinging on to the Euro? Lance the boil, take the short-term pain and start again - all within, and with the support of, the EU.
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D G Stonebanks on 19/07/2015(UTC)
chazza
Posted: 15 July 2015 09:37:07(UTC)
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jeffian,

on the first point, it is only those countries that were members of the EC / EU before the introduction of the Euro that are not obliged to adopt it. Others are expected to to adopt it in due course, and most already peg their currencies to the Euro in anticipation of their doing so. Joining the Eurozone was supposed to be a one-way street toward ever closer union, so once in, all members were expected to stay in; there is no mechanism for withdrawing. So Greece, once in, is in for the duration. 'Grexit' was only ever an option for Euro-skeptics (people skeptical about the Euro, if not the EU), who include Schaüble.

on the other points, reason and rational calculation are less important than emotion and symbolism. The Greek national psyche is still scarred by 500 years of Ottoman rule, and every Greek I know is desperate to retain a European identity. Very few Greeks who said 'oxi' in the referendum imagined they were voting no to the Euro, let alone to the EU (and remember that there were those who were saying that leaving the Euro entailed leaving the EU).
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jolyon kay on 28/07/2015(UTC)
engineertony
Posted: 15 July 2015 12:13:25(UTC)
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Just a simple trap used for centuries by the ruling elite. You lend at a certain interest rate which you hope will strangle the debtor and hold him to payments to you forever. Let him do the work and you live on his back.

If he manages to pay back then you lend him more and more until he believes that he can actually live beyond his means forever. When he gets to a position where the interest is more than he needs to live then you have him, you move in and buy up all the assets for a song.

If this is done by a coniving corrupt government and ruling elite then the ordinary people have no idea what is happening, just keep spending other people's money and be distracted by the media hype.
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JohnR
Posted: 16 July 2015 12:05:58(UTC)
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Replace the word creditor with predator and the whole situation in Greece and everywhere else becomes much clearer.
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Frank Frank on 19/07/2015(UTC)
Mike_B
Posted: 16 July 2015 12:44:49(UTC)
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The Greek people have been screwed by their government. Why has their Parliament approved this horrendous deal? Because when the euros come rolling in, they will have first place in the trough!
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Frank Frank on 19/07/2015(UTC)
Velo Fellow
Posted: 16 July 2015 13:22:59(UTC)
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I would think that the Greek population don't trust their own politicians to run a national currency. Things must be bad when you would rather a load of unelected Belgians to look after the 'Euro in your pocket'
chazza
Posted: 16 July 2015 13:26:35(UTC)
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The conspiracy theory that this is all an evil plot to enslave the Greeks (and, in due course, the whole of southern Europe) is much less plausible than the observation that is the working out of a chain of unintended consequences.

France wanted the Euro, both because it was the logical next step of ‘ever closer union’ and because it would tie a re-unified Germany more tightly into the EU. A reluctant Germany simply insisted that the Eurozone should be rule-bound, as the German state is at home. Greece, desperate to be ever closer to the heart of Europe, fudged the figures (with a little help from American friends) to gain admission to the Eurozone. France, determined that this latest European venture should succeed in spite of British skepticism, blinked and embraced Greece, and persuaded others to blink too. It all went well enough until the banking crisis upped the pressure on the weakest debtors, and Greece rapidly fell further into debt, accepting bailouts that only deepened their problems, and on Germanic terms that snuffed out any prospect of Greek economic recovery.

I very much doubt that anybody among the creditors wanted the present Greek debacle, though some foresaw it. The much vilified Schäuble is more clear-eyed about all this than most in advocating a managed ‘Grexit’ with generous assistance from the richer EU states to get Greece back into an economically sustainable position. If Greece is now a debt-slave of its creditors it is more because of the foolish idealism of France and Greek Europhiles than because of any ill intent from the hard, cold North.
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Richard Hoar
Posted: 17 July 2015 07:55:39(UTC)
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Hi
I don't think the Greeks, whether they realise it or not, are voting against austerity or for austerity. Austerity is coming whatever they do. We often hear politicians say we should stop austerity as if it's a run away train.
If you don't practice prudence which the Greeks didn't and to a less degree us, then austerity will visit you. When it comes of it's own accord it's far harsher.
Saying no to austerity reminds me of that Fry/Laurie comedy sketch "say no to madnes"
Beyond logic to almost the point of insanity.
But if people belive it politicians will say it.
2 users thanked Richard Hoar for this post.
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jeffian
Posted: 17 July 2015 08:36:42(UTC)
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chazza makes a good analysis above but I remain mystified that the Greeks resolutely refuse to consider the one thing that would break the current impasse. It is remarkable that every single commentator, bar none, agrees that the current 'deal' is unworkable, unfair and doomed to failure - and yet everyone is going along with it! The Greeks seem to equate leaving the Euro with leaving the European Union, but if only they could separate these 2 quite different things in their minds, they could take the step that would achieve what they want - default on their debts, reinstate the drachma, let the new currency find its own level and start to grow the economy again. Herr Schauble seems to me the wisest in all this and his solution of a 'holiday' from the Euro is clearly the right one (albeit a holiday from which they may never return!) - and yet it was stamped on by Merkel with her insistence on 'no haircut'. If the Greeks called her bluff, defaulted and took the consequences, they would be the winners in the longer run. Why, oh, why is no Greek politician or (apparently) the people prepared to countenance this?
2 users thanked jeffian for this post.
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D G Stonebanks
Posted: 19 July 2015 11:16:21(UTC)
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"yet it was stamped on by Merkel with her insistence on 'no haircut'."

Everyone knows that Greece can't pay their debts. The new loans are used to pay the interest on existing loans - the Greeks only get the bill!

But the Greeks owe Italy several eurobillions - if Greece defaults then the Italian banks go under. Who do Greece and Italy owe? Once one goes under, they all fall over like dominoes.

A currency can only survive if people believe in it.

If the Euro breaks up, then the German currency will rise, while all of the others will fall. All of Germany's exports become more expensive,and we'll see fewer Mercs, BMW, Audis and VWs on our streets.

We have had two world wars with 100 million dead to prevent Germany dominating Europe. They are trying, and succeeding so far, to do it again.
magic beans
Posted: 03 August 2015 11:04:11(UTC)
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This is an interesting take on the situation.
http://www.hl.co.uk/news...-its-not-greek-citizens

I liked "Rescue of German bankers from the results of their Athenian lending folly,” as an alternative title to Greek Bailout.

I also like the disclaimer at the end.
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