As commented on Yanis Varoufakis’s blog. In case there was any doubt as to what caused the Eurocrisis and what the possible solutions are.
Dean – the first part of your reply. Feel free to state contradictory information from a credible source
2. Facts are facts.
Greeks no longer have control over their own currency.
That is a fact. It is not in dispute. Given that, the Greek government must balance its books and the trade deficit needs to be addressed and so does the amount of debt. Like it or not that is the way it is and it cannot be changed if Greece is in the Euro. Public opinion, politics, speeches, propaganda whatever, they do not change anything. And incidentally I think it is good for Greeks for the country to stay in the Euro for these same reasons.
The alternative is the recycling mechanism.
Which is Germany giving the Greek government money. Unfortunately if you think your politicians should give Germany this power then you have to accept Germany’s terms. You cannot give the Greek government approval to use a beggars cup AND also expect it to dictate terms.
If you want to live in a country whose government does not have to deal with reality then welcome, Greece today is what you get. A government which can inflict massive taxes on its citizens with zero accountability for the economic carnage. This is what you get when a government is immune to the financial plight of its citizens. This is what you get when government is no longer accountable to the markets. If you think Greece should be dependent on other countries for money then mission accomplished. You have got what you wanted, live with the consequences of your position.
3. Dean, I am not anti-bank. I am anti-violence. Central banks exploit the governments ability to inflict violence on the population in order to get citizens into debt involuntarily through public debt. I have no issue with banks who are separate from government, like you say, banks are essential to human development.
4. I am talking about Greece. The problems with the Greek banks stem for the problems of the Greek government. And this is why the Greek government is being stopped from defaulting through bailouts. It is to keep the Greek banks alive.
All the problems in the Euro area boil down to the simple fact that regional central banks have had their ability to monetise their governments debt limited.
That is it. Very simple.
This is going to cause different problems in different countries. In Greece it was government debt servicing costs. And it looks to be the same issue in Italy and Spain.
I think most people have accepted these facts and are now arguing the toss about the solution.
The ECB thinks the value of the Euro should be reduced, making savers and pensioners throughout Europe poorer.
Germany’s alleged position is that savers and pensioners are essential to economic development and the solution has to be reducing government’s dependence on devaluing their own currency.
This is the question, forget everything else.
If you think savers and pensioners should have their wealth reduced your are with Yanis Varoufakis, Hollande, Rajoy, Rumpuy, Barroso, Draghi, Monti, Keynesians etc.
(Or if you want to break it down further a recycling mechanisms with all the problems that accountability of government brings with it.
If you think the savers and pensioners should be rewarded you are with Merkel (if she can be trusted to do what she says), Weber, Weidman, Bundesbank, Ron Paul, Marc Faber, Jim Rogers, Austrians etc
As I said. That is the situation in a nutshell. Do you want money that is controlled by the people or do you want money whose value is changed at the whim of politicians & central bankers.
Unless you know which side of the fence you are on you are at the mercy of the state media and their spokespeople.