By Philip Pilkington, a writer and journalist based in Dublin, Ireland
Civilization begins with order, grows with liberty and dies with chaos
– Will Durant
Well, it looks like the Greeks are going to get a deal on their debt. Provided they continue to destroy their economy through austerity measure, of course. But then why should it be otherwise – why on earth should logic rule when crass moralising is so much more palatable?
But there are a couple of problems with the current ‘arrangements’. As Marshall Auerback wrote yesterday:
Suppose Greece finally does get a deal? I realize everybody says it is a ‘one-off’, but do you really think the Irish, Portuguese, or even the Spanish and Italians will go along with that, particularly if (as is likely) they continue to experience double digit unemployment and minimal growth?
Marshall’s focus in that piece was Spain as the proverbial elephant in the room. And his argument should be seriously considered.
However, there’s another important angle on this. And in truth, it’s rather obvious – less the elephant in the room than the floor, ceiling and walls. Simply put: if Greece gets a deal and if other countries begin to increase the pressure to have their debt burdens alleviated, should potential investors in European government bonds not come to see that they’re just disposable playthings that can be tossed over the side of the crib the moment the ECB and the Germans find it politically convenient to throw a temper tantrum and do so?
Way back in October Mosler and I wrote:
Think about this. You’re a private sector institution that has to ensure that you don’t take losses on crappy paper. You’ve now seen that the Eurocrats are willing to burn anyone who invests in the sovereign debt of any European country that experiences significant financial difficulties – difficulties which, it should be pointed out, are imposed on these countries by the Eurocrats. And you’re expected to continue to consider, for example, Italian debt to be relatively safe? What a lark!
And now, in the wake of what seems to be a deal on the Greek haircut, look at what’s happening elsewhere. Yesterday Reuters reported that the unions in Portugal were demanding that Potugese bondholders take a hit too. The intro to the piece ran:
Portugal must renegotiate its debts rather than impose harsh austerity measures to overcome its economic crisis, the head of the country’s largest trade union said on Wednesday, threatening to step up strikes if the government pushed on with cuts.
The union leader that called for the restructure is hopelessly confused about the politics here, of course, claiming that debt should be restructured rather than austerity measures being imposed. But we all know that debt restructures in Euroland are always going to come with a clause stating that extremely punitive and counterproductive austerity measures must be imposed.
So, yes, the Portugese unions are confused about the crazy politics behind these deals. (And why shouldn’t they be? After all the politics are deranged – what sane person could intuitively understand them?). But, no, the demands by the unions are not unreasonable. They are perfectly correct in thinking that if a haircut has proved the only viable solution in Greece, it will probably be inevitable in Portugal too. As the union leader said:
If the results in Greece were disastrous, without a doubt they will be no different here.
Obviously the union leader is 100% correct.
But here’s the thing: these haircuts are not really doing much to alleviate the real problems because the more of them that are demanded, the more investors are likely to pile out of the European sovereign debt markets. Again, if you were an investor would you throw your money into a pot if the holder of the pot offered you a very low rate of return and also told you that there was a very good chance that he might arbitrarily toss a match into said pot at any moment? I wouldn’t.
The situation in Europe has turned into a complete farce. The ECB needs to step in to guarantee the bonds, but the Germans won’t let them because, in their infinite wisdom, they are intent on drawing blood from a stone and imposing austerity measures (that don’t work) on the periphery.
But given these current ‘tactics’ the ECB will eventually have to step in because investors will be spooked so badly by all the talk of more haircuts that the only ones left to keep a lid on the bond yields with be the central bank.
Does the ECB realise this? Do the Germans? I don’t know. But my guess is: no. My guess is that they haven’t even thought this stuff through. My guess is that they’ve become so caught up in their own little morality play that they fully believe this nonsense.
Our leaders today do not try to bring order to chaos to ensure that their citizenry can live in liberty; instead they try to exacerbate and manipulate chaos itself so that they may impose their arbitrary rule. If history has taught us anything it is that such politics is a very dangerous game – and that such games are the enemy of civilisation.
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All right from a financial perspective. But the root cause is that Greece produces much less than it consumes. Should Germans or Brits or Americans taxpayer, i.e. their middle class, pay for their consumption? For how many years? Why?
Be ruined by debt has always resulted in lot of pain. Does anyone remember the most important christian prayer?
“And forgive us our trespasses
As we forgive those who trespass
against us”
So if this problem is even recorded in this 2000 year old prayer does it means something? Maybe that we should stay away from debt as individual or states.
The Greeks were promised scads of money if they joined the Euro, and German and French banks were only too happy to provide funds for them to buy BMWs and Renaults.
Lacking the ability to devalue their currency, the Greek government had no tools to stem the flood of Euros into the country, which could have ended the buying binge much earlier.
I realize that’s a simplification, but it’s just too Christian to blame those who succumbed to temptation without casting some blame on the tempters, as well. Especially since the tempters had their own profit in mind.
It also appears that the ‘conservatives’ (ha!) running Greece for most of the Euro decade realized that the inflow of cash removed any incentive whatsoever for the government to modernize its tax collection system and create incentives to shrink the off-the-books-economy. Even today, if Greece could actually collect the taxes that the laws says it should, the fiscal crisis would be much less. But that is the one part of all the ‘reforms’ that somehow never gets implemented even a little. Rich Greeks have become accustomed to the _privilege_ of lying on their tax returns and stiffing the government — and there is nothing, nothing I tell you, that heats emotions and causes crazy behavior than the withdrawal of privilege. So, given the internal political influence of the wealthy (from doctors to billionaires), instead widows’ pensions will be cut another 15% and the minimum wage will be cut to starvation levels (as though lowering wages could increase the state’s fiscal revenue, somehow).
The US CIA sponsored the fascist generals that ran Greece for a long time, the spectre of which has ruled Greece ever since. Goldman Sachs helped cover up the cracks in the plaster and get more money. So maybe the US does owe them something.
Germany loaned all the little countries money to buy German products. Its not as if Germany and Greece just met-German banks knew what they were dealing with and loaned money anyway. Maybe Greece shouldn’t be punished because German banks wanted to gamble.
Greece has been a geopolitical pawn for a long time and suffered for it. It is sometimes difficult to have sympathy for the forces that want to make it the scapegoat for what look to be corrupt and injust practices by other countries.
Indeed. But had it had its own currency, it would have been unlikely to happen.
Moreover – and I’d argue even more importantly so – it suited Germans that the south consumed more than produced as long as it was German imports that were consumed (Spain was 5% of Germany exports, Italy 6% and France 10%. Germany was net exporter to each of those countries. No wonder they don’t want them to devalue/go under!).
In fact, it suited them so much, they were even willing to lend them the money then needed to consume (German imports) – especially since they didn’t have many more places to park them, an had no perceived FX risk in doing so with their southern “partners”.
In other words, Germany was/is playing the same mercantilist game as China, but managed to hide it much much better.
A question I can’t answer is whether they did so by design or happenstance (I suspect a combination), compared to China’s by-design. But ultimately it matters not.
Excellent analysis, Vlade.
However I’d say that the guilt is not so much of Germany (German oligarchy), who in a sense have been just playing their nationalist-imperialist game, but of the Latin European bloc or lack of it thereof. No Southern European (or French) politician has been at the height of this challenge nor has been able to envision that with this kind of arrangement it was doom for the South for sure.
Nor are they standing up to fix it in terms at least minimally favorable to Southern Europe either.
The lack of statesmanship in Latin Europe is truly scary. Much more than any German wrongdoing. True that Germany should have acted as leader of the Eurozone but if the leader was selfish, it was up to the rest to force it to step down or correct its way. And nobody did.
And nobody does yet.
Well, in playing the mercantilist game, China has a bit of an advantage in that it controls its own currency. But Germany shares the Euro with its importing complements, which sort of screws up the whole idea of mercantilism. Notice that the system of mercantilism with fiscal counterflows is breaking down in the US too at the state level. For years, the ‘consuming’ states (notably in the South) have run deficits statewide, but Federal transfers brought balance (California, a manufacturing state, gets about 60¢ back for every dollar in Federal taxes its citizens and corporations pay). But when the economy slows, and formerly exporting states faced raised ‘domestic’ costs because of a depression, suddenly they aren’t paying enought Federal taxes, and the outflow causes backlashes that bankrupt the state governments — though bad tax design and bad policy have made things worse. Even though the California state budget grew very modestly over the past two decades when adjusted for population growth and inflation, the state both cut taxes and shifted to excess dependence on capital gains and sales taxes, which are the most cyclical.
As above, if they had their own currency they could devalue.
Also, if you have a currency union you have to accept that some states will be ‘consumer’ states and others ‘producer’ states. Think Louisiana in the US. You think they have the same ‘productivity’ levels as New York? You must be kidding me.
The other alternative is to use institutions like the European Investment Bank to increase investment in places like Greece directly. In the US they do this indirectly through military contracting.
The moralising has to stop though. It’s childish. Really childish.
Oh, and countries like Ireland don’t have ‘productivity’ issues. The spin on this in these terms is so misleading that I’m surprised anyone actually believes it anymore…
This whole thing is so bizarre… it really is. It should serve as a chartalist’s coming of age story or the subtext of such. What PP and Mosler wrote back in October is spot on. You can extend that out to the irony of Sarkozy and company trying to hit up China and the US to finance more Euro debt. You purport your currency framework to be better/lower-risk because dim-witted neo-liberal-minded investors will buy that nonsense, but you have to turn to the issuers of ostensibly less credit-worthy paper to help support your house of cards. As the Brits say, that’s quite rich indeed. I’ve been sharing out David McWilliams’ “Punk Economics” video on social networks/forums (TY PP). In it, one of the most interesting lines uttered is this : “(Euro) bankers mistook no exchange rate risk for no risk at all. How wrong were they?” Perhaps now some will start seeing that the real risk is sinking money into the black hole that is a modern day “gold standard” currency. What a horrible joke that is causing so many to suffer needlessly. Dante would need a whole new (lower) circle of hell for the architects of this mess.
Here’s the funny thing about the Chinese deal:
(1) Chinese see it in their self-interest as it keeps down the yuan/renminbi and allows exports to flow.
(2) Merkel likes it because it keeps the euro strong.
(3) Keeping the euro strong makes it harder for Ireland et al to export.
Another irony that highlights the truth of the current situation: this is ALL German power-play. But they will destroy themselves in the process. Not that German power grabs have ever destroyed the country in the past or anything… *whistles*
Marley,
The bankers know exactly what they are doing. The whole point is to keep the debt based monetary system going as long as possible until it collapse then the bankers will reset it and start the game again.
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
mansoor h. khan
Take it easy on Louisiana Philip. I shudder to think how much worse the GFC could have been (could be) if we were as “productive” as New York!
Think Louisiana in the US. You think they have the same ‘productivity’ levels as New York?
Well, if you valued the financial sector based in NY at its true, enormous, negative value, I think Lousiana – or even Somalia – would come out ahead!
What? Why should the lender be less “guilty” than the borrower? In any restructuring those who were crazy enough to throw wads of cash at a moribund company are held accountable for it – usually they can’t escape a haircut that makes them look like U.S. Marines. Greece was like a fly waiting for the windshield for years. Who needs all this moralizing, all this crap on the profligate Southerners?
I emphatically agree, and I’m surprised that Yves is calling for monetization.
Didn’t the ECB EXPLICITLY promise the German citizens that this would never happen. Didn’t the ECB promise the German citizen that a transfer union would not ever by necessary?
Do we respect democracy in the EuroZone or don’t we?
I hear that the English government’s chief executive ordered the tide to stop rising, too. That didn’t work out so well for him, and promises to have a shared currency without a fiscal union were about as real as orders to the tide.
HK,
Another translation of the Lord’s Prayer (more common for Catholics, as in Southern Europe) is “forgive us our debts, as we forgive our debtors.”!
That does not imply we should avoid debt, as you suggest. Rather,we should forgive debt, as in a jubilee. That is the ancient lesson here, and that is probably how it should end. Why don’t we see that as our obligation?
and corporate debt too. they do the exact same things other debt holders do
What a wonderful week, with two new aha! paradigms.
1) the discovery that Europe has a German problem (avengingWWI reparations?), and not a Greek problem. Voila, solution. ECB tosses money into escrow for paying directly enough German holders of Greek bonds to detour a “credit event” and never lets the filthy Greeks touch the stuff. Greece (and filthy Portugal) are such tiny tots they never need be allowed to trouble mighty nations or their banks. Soon enough, the tiny tots can be offered “aid”, and bailout lending will be forgotten. (but aha! and a half, what can they do with the filthy Italians & filthy Spanish?)
2) The discovery that banksters and and their running dogs can be prosecuted, without jeopardizing world finance or political fortune. Voila, solution. Indict the perps, from bottom up, and worry about justice in some less anxious time. By the time these swells have had their court days to sing, the public will have found out the whole finance Ponzi scheme and will be ready to contemplate a next step. Is there Kucinich/Grayson in our future!
Why not blame the architects of the EZ? Why not claw back all of their salaries/benefits that have accrued to them over the last 20 years?
I don’t blame the Germans. I blame the architects of this ill-fated edifice that was destined to crumble without a permanent significant transfer union.
Even if the EU somehow weathers the crisis, pushing the periphery into a third-world debt trap will be unsustainable politically. It makes a complete mockery of the idea that the EU is for mutual benefit rather than enriching the Core.
Do Germans not have the story of the goose that laid the golden eggs in their country?
“Do Germans not have the story of the goose that laid the golden eggs in their country?”
They probably laugh at it because Aesop was Greek. They seem to prefer the Twilight of Gods, it fits best with German sense of (ironically also Greek) tragedy.
I see them as Sisyphus anyhow: always working for no result.
Da unsere Gänse völlig Euro-normiert geworden sind, besteht keine Möglichkeit einer Ausscheidung edelmetalförmiger Eier; also sind Vorsorgungsmassnahmen, einer solcher Ausscheidung entegegenzukommen nicht vonnoten.
Cisco was at one time trading at a price 4x what it’s trading today, largely on sales that it would finance via vendor loans. Of course, this wasn’t viable, so it wrote off a substantial number of loans and reverted to a steady-state growth rate.
Based on your comment, Cisco should have continued to extend vendor financing package after vendor financing package. And if a particular company ran into trouble, than Cisco should have doubled down and extend even more loans.
Is that what you’re suggesting that Germany do?
The Numbers Swim Around in My Head Like 306 Fish in an Aquarium
I can’t make any sense of this.
According to the CIA World Fact Book, Greek GDP is 306 billion.
Investment is 13% of that, or 40 billion.
Exports are 9%, or 27 billion.
Germany and China account for 15% of exports, or 5 billion.
So it’s:
GDP: 306B
Investment: 40B
Exports: 27B (Germany & China are 5B of that)
Now if Germany/China/France/Europe could come up with a plan to invest 20B extra/year in Greece and if Germany/China would agree to import 5B more/year, that’s 25B stimulus per year, growing GDP by about 8%/year.
25B stimulus compared to 100s of Bs in bad loans that pay off other bad loans.
But what would they invest in? and what would they import? That is a riddle. I guess that’s why they want Greece to sell public infrastructure and call it “investment”. I guess there’s a limit to how much tourism they can “import”. There’s not much need for ships these days. And why import something from Greece you can get cheaper someplace else because a sweatshop or science-fiction factory makes it.
It’s confusing. Somehow things will return to equilibrium, but it may be an equilibrium populated by different people than the all the ones now in disequilibrium. I guess you could ask if that’s really a return to equilibrium or a death. But that would be a “normative” question and we can’t have those because they are value judgements. So we have to stick to the math. And I can’t make any sense of the math either. The numbers all just swim around in my head like fish, every which way here and there going nowhere.
This is indeed the riddle. I know of no definition of debt repayment other than the transfer of goods and services from the debtor to the creditor. Yet Germany has no need or desire for the goods and services that Greece can provide. Nonetheless, the debt is sacred and must be repaid and apparently the currency is to be unemployment and social disintegration. It’s positively Kafkaesque.
really.
I was just thinking: what if somebody discovered lake in Greece whose water, if you drank it, cured any illness, took 20 years off your face and extended your life span by 30 years.
I bet Greece would become an overnight competitive success. And It would give the 1% everywhere someplace to go, with wallets wide open.
Funny how competitiveness and efficiency are like a scenes in a dream. They sort of emerge and burst and shift and flame in and out chaotically, and they seem to mean something at the time. But who knows what or why.
Here’s a concept for some marketing whiz in Greece… Magic Olives! The idea here is to promote a special brand of olives from some very ancient newly discovered strain (the name http://en.wikipedia.org/wiki/Asclepius should be used somehow in this). They could promote that eating these olives strengthens the immune system, prolongs one’s life, and using the sacred olive oil as a massage enhancer keeps one’s skin youthful. This could be backed up with faux science studies (they could look to the pharmaceutical industry or comstics industry for advice here).
We have been marketed “Greek yogurt” as “the best” in TV for at least a decade now… but it’s a brand of Danone, a French corporation (of Catalan origins). I doubt the Greeks get anything for it. The same that they do not get a cent of euro for the Parthenon marbles in the British Museum.
Let’s not be naive about all this: the great Greek business asset has been always giving convenience flags to rusty ships, just as Liberia but nowadays in bad shape because of stringent EU rules, and being a comparatively expensive tourist destination near the much cheaper and equally appealing Turkey. In addition it provides cheap labor for factories of foreign corporations like the aforementioned Danone and may export some food for delicatessen.
But the labor costs and the tourism prices are comparatively very high because Greece is a Eurozone partner (or scam victim it seems now). Greece cannot compete with Bulgaria or even Poland, which are outside the Eurozone, never mind Turkey or Albania, which are not in EU but are favored partners.
So what is Greece to do? Sink and collapse. What did you expect?! It might have been different if the euro was less strong (a weaker currency for a not-so-strong European average economy) but in the extreme case of Greece even that might not have been enough.
An analysis with much merit, but a bit serious/earnest in tone given the prior playfullness. I should warn you, I’m good friends with Maya and Lila ;)
no problem.
just make it someplace else — like Bulgaria — and put a Greek label on it with a suggestively posed drawing of Maya or Lila. If I’m shopping, I’ll never know the difference.
Farm out the manufacturing while Greece fronts for the brand and rakes in the revenue. That’s the way it works nowadays.
Not to mention that too many Greeks treat foreign visitors (before the crisis) like shit. Having been there several times as a tourist, I have to say that aside from the time we went to a small island, it was thoroughly unpleasant despite the amazing things to see.
If Greece becomes the next Lehmann, Spain and Italy will be the next AIG. Despite the happy talk from northern Europe — that the EU can survive a Greek default — does anyone doubt that Italian and Spanish banks will experience murderous runs if Greece blows up and its banks go under? Fed and Treasury were politically unable to intervene with Lehmann; but with AIG following days later, DC recognized that immediate action was necessary and in fact politically doable because the pubic sensed the scope of the crisis. Is something analogous happening now in northern Europe? If it is politically impossible for northern Europe to bail out Greece on reasonable terms, the contagion immediately following will be so dire that the politicians will have a free hand in containing the impending collapse of the Italian and Spanish banks.
And the slow motion train wreck of exponential growth debt-based capitalism continues. A bitter pill to swallow to be sure, but one that is absolutely necessary for the world to survive. For those that come out on the other end of it in 50 or 100 years – assuming any actually do – they’ll view it all as the mass insanity that nearly killed us all and wonder how any rational species could have succumbed to such malarkey. Or maybe it will? The jury’s still out of course. If so, it will be our very perverted “rationality” itself that will have done the deed (You know, because “rational” people all know that technology and brainpower conquers all, and that humans – especially Americans – are All Mighty God’s highest expression of that concept). System reset. Evolution, try again.
I know lets play pretend to play hardball and then kick the can down the road. Works every time.
The reality no one wants to face is the hard fact that there IS no solution, either to the European situation or the situation in the USA or the world situation as a whole. Yes, if Greece (and by implication several other insolvent states) adopts severe austerity measures, there will be no growth and the debts will continue to accumulate until the system finally collapses.
On the other hand, if there is an effort to promote growth by pouring still more “investment” money into these failing economies, the level of debt will skyrocket, carrying Europe and the rest of the world as well, far beyond the emergency we now face. There is only so much money in the world and only so much additional money can be printed without courting disaster big time.
On the other hand, a complete meltdown of the world economy might not be as bad as most of the experts think. But even if it is, we have no choice. So why not make some attempts to prepare, instead of continuing with a depressing game of kick the can that is no longer even interesting anymore.
This is what I wrote on the situation back in Feb. 2009:
“the economic system cannot be allowed to collapse because that would be a catastrophe; on the other hand, there is no way to prevent the economic system from collapsing without producing a catastrophe. So what are you going to do, Mr. Obama?
The Financial Armageddon we are now confronting is not simply a technical problem that has to be solved, as assumed by our leaders, the pundits and the media generally, who are continually arguing back and forth on this issue — but an aporia, an inherently insoluble dilemma.” http://amoleintheground.blogspot.com/2009/02/aporia.html
I was, of course, referring to the situation in the USA, but the basic logic is the same and holds today, not only for Europe, but the world economy generally. I’m amazed that our leaders have managed to delay the inevitable for so long a time, but that doesn’t make it any less inevitable, I’m afraid.
Aporia… what a wonderful concept, thanks! Nice post. I quite agree with the fact that there is “no solution” to this situation. There is no way to “fix” it or control outcomes. The various trends will have to play themselves out and we will all have to deal with the consequences. There are many problems in the world that can’t be fixed (the world is not a “machine”, nor are countries or economies), though they can be worked on and nudged a bit here and there. Not seeing any effective nudging either.
This morning I was watching Betty Liu interview Simon Johnson on Bloomberg News. It was very entertaining to see Betty Liu trying over and over again to get Simon to admit that it was a good thing that the Greeks had agreed to a solution, and that this was a good first step to restoring confidence to the market. Meanwhile Simon keeps saying, in varying ways (and with increasing and barely concealed frustration), that this is just another attempt at papering over fundamental problems that are deep and severe and that it was of no value and was NOT a first step of any kind. While Betty did not overtly stick here fingers in her ears, stick her tongue out and say “LALALALALA”, she might as well have.
What will happen next in this Kafka-esque economic dance? Who knows? Stay tuned for the next episode of “As Europe Turns” and make your best chants ;)
GATE GATE PARA GATE PARASAM GATE BODHI SVAHA!
http://www.interluderetreat.com/meditate/ppsutra.htm
Hi Valissa. What will happen next? I’m not sure. But I have a pretty good idea of what will ultimately happen. Because it will have to happen, we’ll have no other choice: http://amoleintheground.blogspot.com/2009/02/shape-of-things-to-come-part-8.html
I like your mantra, by the way. I guess there’s more than one “gate” to conquer in this world, if not the next. :-)
O.k. when does this austerian insanity result in Greece “going Hungarian” ? You can bet your bottom NewDrachma that there’s some Victor Orbanopoulos lurking in the shadows waiting for complete civil breakdown to give them their chance.
The situation in Greece is socio-politically totally different than that of HungaryÇ: there is of course a fascist party that has been propped up to the national unity government but the real winners are unavoidably the traditionally very strong Greek Left, one of the most powerful Left wing forces of Europe. It comes in four flavors:
Neo-Stalinist KKE, poised to get some 20% of votes in the last poll I read (before national unity government). Their weakspot is that they are so authoritarian that they even collaborate with police against those who try to act independently.
Radical Left Coalition, Syriza. c. 10% in same poll (more likely to attract discontent protest votes than KKE IMO).
Anarchists: the largest militant Anarchist movement in Europe by far, with groups exerting urban guerrilla for decades, many occupied centers in universities and neighborhoods, etc. Obviously they do not take part in elections.
Antiauthoritarians: somewhat similar to anarchists but infintely more eclectic and not in too good terms with the Anarchists (at least not in the 1990s). Similar to other European ‘Worker Autonomy’. They are also very strong and hold many occupied buildings. I imagine that some may sympatize with Syriza.
The dimensions of all these movements have little comparison in Europe or elsewhere. At the most the Italy before the collapse of the USSR and the recycling of the PCI into social-democracy and now a mere clone of the US Democrat Party. There was maybe more similitude with Germany or Spain back in the 80s but today I think that the strength of the Left in Greece is unmatched anywhere in the Western World.
On the other hand the right is rather weak, being correctly perceived as the cause of all the troubles. Also Greece is a sociologically Western European country what really does not make the fascists nor religion as popular as in former Soviet bloc countries like Hungary or Poland.
O.k. I stand corrected. I really didn’t realise that the KKE was still so strong in electoral terms as it was back in the late ’80s. Still … I’m not sure whether in terms of the EU/EZ political dynamics here’s much daylight between a neo-Stalinist bunch and a near-fascist one. Both have a long and inglorious history of garnering support through xenophobia which, in this case, would mean blaming all the country’s troubles on the Euro. Conveniently, in the case of Greece, this blame would devolve onto the conservatives who took the country into the EZ in the first place.
“I’m not sure whether in terms of the EU/EZ political dynamics here’s much daylight between a neo-Stalinist bunch and a near-fascist one”.
The Neo-Stalinists are likely to show the middle finger to EU and the banksters right away, placing Greek de facto out of EU, WTO and even NATO in a matter of days, while a Neo-Fascist like Orban or Berlusconi are most likely to protect the banksters’ interests and try to stay inside these organizations instead.
I do not know that much: I can’t really predict the future and surely, in case of victory, the KKE would have to try to keep some sort of realistic balance, much like the Maoists in Nepal… but what is clear is that Greece is not Hungary at all.
Re: “…unions in Portugal were demanding that Potugese bondholders take a hit too.” I believe that the proper phrasing would be “…unions in Portugal were demanding that holders of Potugese bonds take a hit too.” It’s important for intelligent people to write intelligently as a means of opposing the cultural barbarians.
Hey, you can give them a Portuguese passport in exchange for the haircut. That way the grammar would be correct and expropriation would become an strictly internal affair of Portugal. ;-)
Send us $$$s and we’ll gladly hire subeditors…