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Thread: The EU should control the Greek Budget the German Goverment says

  1. #16
    Senior Member tluassa's Avatar
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    Quote Originally Posted by The Kaiser Chief View Post
    Then it should get rid of everything except Germany and maybe France under German fiscal control. BTW FYI Germany hasnīt posted any surplus budget since 1969 or so and is closing in on a 90% debt ratio. With one million retirees being added every year from now on I would maybe think about inflating the debt away such as SkyUS recommended. This would also help the German exports.
    Bla bla, Germany gets money for free at the moment and could easily sustain a debt ratio comparable to the UK or Japan, which is around 500% overall debt. Germany is at ~285% overall debt. So go somewhere else to spread your unfounded, silly little opinion

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    Quote Originally Posted by Papenheims View Post
    What if Greece simply doesn't submit? I am not sure that EU community are able to enforce their will on Greece. It would be interesting to know if some EU state can be kicked out of union by decision of majority or otherwise.
    Nope, there is no legal possibility to kick out members of the EU since there is no passus in the contract works. Yet, since this are contracts and accords bound the priciples international law, one could freely choose to leave the union by declaring so and simply stopping to enforce the implementation of the EU legal framework - but at the moment there is no reason Greece should so, unless something is done to "sweeten the pot". On the other hand, a bunch of member states could leave the EU und found another union, e.g. the North-European Union, and thereby shutting the other members out. The same applies for the EURO. Alone the required paperwork and negotiations would make such a "new-start" an project for at least a decade, not accounting for the basic decisions (who is in? who is out? what about France and Italy etc.?).

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    Quote Originally Posted by tluassa View Post
    Bla bla, Germany gets money for free at the moment and could easily sustain a debt ratio comparable to the UK or Japan, which is around 500% overall debt. Germany is at ~285% overall debt. So go somewhere else to spread your unfounded, silly little opinion
    Who said that these overall debt ratios of the UK and Japan are sustainable? Isnīt it apparent that they are not? Especially Japan has chronic high unemployment, low pensions etc., and is branded as a "Zombie Ecnonomy" where uncompetetitive industries are subsidied by the government with money it does not have? It is the sheer size of its GDP which prevents it from coming down, but I would not regard the Japanese or the UK scenario as a feasible option for Germany.
    I guess you wouldnīt like to live in country that taxes every step of yours, but isnīt able to give you anthing back (social security, infrastructure, healthcare, etc.) because all the money goes to the creditors (thatīs what happens in Greece BTW). Maybe you should wait for the upcoming reforms after the 2013 election...so bottom line, Germany has a good standing in comparison to the other Eurozone members, but it has its own challenges looming in the not too distant future (pensions etc.)

    P.S.: The "for free" credits do have a duration of less than a year, which means that the whole sum has to be paid back after twelve months. And the relatively low interest rates can always sky-rocket once certain problems become apparent, as they have done in the case of the PIIGS BTW. So bottom line: there is no reason for a new Germanic sense of superiority, they are just next in line after France.

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    It is more clear than ever that Greece goes in default,this time for real. The media have kind of prepared the Greek public about this and everybody waits it til March. And it seems to be served to the public as a way to achieve a kind of catharsis.

  5. #20
    Member cem40's Avatar
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    i think euro was the worst idea in the human history... Even if there was no weak links in eurozone, more powerfull countries ( like french and germany )will face difficulties in long run...

  6. #21
    Senior Member valtrex's Avatar
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    [SIZE=4][*******grey]Germany's Role in the European Debt Crisis[/COLOR][/SIZE]
    By [*******red]George Friedman[/COLOR]

    The German government proposed last week that a European commissioner be appointed to supplant the Greek government. While phrasing the German proposal this way might seem extreme, it is not unreasonable. Under the German proposal, this commissioner would hold power over the Greek national budget and taxation. Since the European Central Bank already controls the Greek currency, the euro, this would effectively transfer control of the Greek government to the European Union, since whoever controls a country's government expenditures, tax rates and monetary policy effectively controls that country. The German proposal therefore would suspend Greek sovereignty and the democratic process as the price of financial aid to Greece.

    Though the European Commission rejected the proposal, the concept is far from dead, as it flows directly from the logic of the situation. The Greeks are in the midst of a financial crisis that has made Greece unable to repay money Athens borrowed. Their options are to default on the debt or to negotiate a settlement with their creditors. The International Monetary Fund (IMF) and European Union are managing these negotiations.

    Any settlement will have three parts. The first is an agreement by creditors to forego repayment on part of the debt. The second is financial help from the IMF and the European Union to help pay back the remaining debt. The third is an agreement by the Greek government to curtail government spending and increase taxes so that it can avoid future sovereign debt crises and repay at least part of the debt.

    Bankruptcy and the Nation State

    The Germans don't trust the Greeks to keep any bargain, which is not unreasonable given that the Greeks haven't been willing to enforce past agreements. Given this lack of trust, Germany proposed suspending Greek sovereignty by transferring it to a European receiver. This would be a fairly normal process if Greece were a corporation or an individual. In such cases, someone is appointed after bankruptcy or debt restructuring to ensure that a corporation or individual will behave prudently in the future. A nation state is different...
    Continue here: http://www.realclearworld.com/articl...9869-full.html

  7. #22
    Senior Member Mackie's Avatar
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    Quote Originally Posted by valtrex View Post
    George Friedman should focus on his war-games.

  8. #23
    Senior Member tluassa's Avatar
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    "Therefore, the Germans have used the institutions and practices of the European Union to maintain demand for their products. Through the currency union, Germany has enabled other eurozone states to access credit at rates their economies didn't merit in their own right. In this sense, Germany encouraged demand for its exports by facilitating irresponsible lending practices across Europe. The degree to which German actions encouraged such imprudent practices -- since German industrial production vastly out*****s its domestic market, making sustained consumption in markets outside Germany critical to German economic prosperity -- is not fully realized."

    This is outrage I mean what does this "George Friedman" think Germany is ? We have a veto right but certainly Germany does not control the European Union itself !!! The EU consists of 27 members, and to declare that "Germany used the EU to maintain demand for their products" is simple lack of reality. Besides, there is "demand for Germany products", everywhere on this planet, and has been since the Industrial Revolution ! With or without the EU. Actually the German share of World-trade was higher with the Deutschmark back in 2000 ! The years until 2006 were absolutely disastrous because the ECB followed a credit policy diametrically going against German interests !

    "The Germans claim the Greeks deceived their creditors and the European Union. A more comprehensive explanation would include the fact that the Germans willingly turned a blind eye."

    The author is either stupid or totally inconsistent with his arguments. First, Germany is accused of "turning a blind eye", later Germany is accused of wanting to control the Greek budget and credit ratings. By the Way, what influence should the German Government have had on private lending to Greece ?

    Is George Friedman really thinking the German Government should have dropped the bomb of accusing Greece in 2007, 2008 or 2009 or something of "lying to its creditors" ? Is that what would have been expected of us, to totally destroy confidence in Greece at this time by throwing such a bomb ? I find this argument really disgusting.

    WHAT does George Friedman want ? Seriously what does this guy want ? Tight German control or no control and letting states like Greece go on as they did before ?

    And how can somebody be blamed disrespecting the great Greek "national selfdetermination" and at the same time be expected to tightly control and monitor their budget when considering credits at a time when such a state according to its own falsified statistics runs well ?.

    Either Way, Germany has every right now to force tighter controls within the Euro zone, given the obvious flaws in the books of some states. Since Germany could not force nations to join the Euro these nations are now themself entirely responsible for their own misery.

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    Europe smell the oil and gas of Aegean

  10. #25
    Senior Member Mackie's Avatar
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    Quote Originally Posted by periandros View Post
    Europe smell the oil and gas of Aegean
    And you really believe this peanuts will help?

  11. #26
    Defender of the Man Code muttbutt's Avatar
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    Quote Originally Posted by cem40 View Post
    i think euro was the worst idea in the human history... Even if there was no weak links in eurozone, more powerfull countries ( like french and germany )will face difficulties in long run...
    I'm pretty sure there were "worse ideas" in history......WWI/II being prime candidates.

  12. #27
    Defender of the Man Code muttbutt's Avatar
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    Quote Originally Posted by periandros View Post
    Europe smell the oil and gas of Aegean
    More likely this was floated to push the Greeks into voluntarily leaving the Euro....IMHO.

  13. #28
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    [*******#666666] [/COLOR]“[*******#000000]The first rule of business, protect your investment[/COLOR]” – [*******#000000]Etiquette of the Banker[/COLOR], [*******#000000]1775[/COLOR].
    [QUOTE=tluassa;6006844
    By the Way, what influence should the German Government have had on private lending to Greece ?
    [/QUOTE]
    Plenty. Why? Because your citizens are on the hook if this "private" business goes belly up and needs to be "bailed out" to prevent "contagion", e.g. triggering the faux insurance the bank had resulting in domino collapse .

  14. #29
    Senior Member tluassa's Avatar
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    @ tea drinker

    Germany will use every method it has to "protect its investments". My advice: just watch and be amazed at how great our government acts to keep damage away from Germany, now successfully for more than 2 years already.

    As I said before, if there is ANY real danger for really essential German investments, the printing press of the ECB for which the key luckily rests in German hands can always be turned on.

  15. #30

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    The Eu taking control of the budget wont solve the problems Greece has. It will make matters worse in fact.
    It's never going to happen anyway.

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