Greek Prime Minister Antonis Samaras is holding a face-to-face meeting with German Chancellor Angela Merkel. The Greek PM is seeking to extent Greece’s time to meet bailout-imposed fiscal targets. Samaras needs two more years. For the economy to breath, as he said recently. then the recession has hit the debt-ridden country much more than the technocrats from IMF, EU and ECB could predict. In 2012, recession is stuck at -7 percent. Tax evasion seems to be at its peak with more and more Greeks unwilling to pay their contribution to state debts – either out of lack of money or out of mentality. Those who still pay taxes are the employees and the pensioners. they hardly have a way to escape the grip of the tax officers. And hardly a self-employed businesman is issuing a receipt. Stealing the Value Added Tax for the shake of the own pocket.
Angela Merkel is not willing to move from her rigid position, at least not before the Troika has concluded its report about Greece’s progress. All German officials who are entitled to say something (Schaeuble, Roesler) have sent a clear message to Greeks: Do your homework and thus as soon as possible. Also Merkel signaled that there would be no decision during the meeting on Friday.
Equally clear was the common message, Angela Merkel and French President Francois Hollande sent to Greece on Thursday: “Do your homework, first!” And Hollande added: “We want Greece is the euro zone.”
And yet, Antonis Samaras is under pressure. He has to announce to Greeks the package of additional austerity measures, a package worth 11.5 billion euro that will affect our lives in the following two years.
Merkel to Samaras: Watch out! Slippery Reforms Ahead!
Many of these measures will turn upside down Samaras’ promises before the elections of last June. some of these measures are even threatening the cohesion of Samaras’ three-party coalition government.
Therefor Samaras is under pressure and needs a “successful achievement” before he reveals the painful measures to the Greeks. Sometime between end of August and beginning/middle of September.
He needs a politically “successful achievement” that his EU partners seem unwilling to give. At least, not now.
Already average Greeks wonder, what’s the purpose of Samaras meeting Juncker, Merkel and Hollande now, if the time is premature and he cannot get what he wants.
“Why is he meeting all these people now, if they’re not willing to give him the green light for the extension?” my 70-year-old aunt asked me earlier today, while we were watching the news.
The answer came directly from state broadcaster NET. “They [Merkel] could say, that they recognise the Greeks’ efforts.”
It looks as if this would be the only consent Samaras would get in Berlin and in Paris. He already secured this statement by Euro Group head Juncker. Now it’s time for Merkel and Hollande to support Samaras with their verbal support.
I expect nothing more for the time being…
Where does Samaras think he is going with this? He’s had the answer hundreds of times. Which part of “Nein” does he not understand?
If he so desperately wants to be the hero who leads Greece out of it’s troubles, he’s most definitely standing in the wrong corner for the fight…
He has no interest “to be the hero who leads Greece out of it’s troubles”. Like a true Greek hero he is looking to be a hero who, for some reason, beyond his or her own responsibility, is destroyed so as to serve the dark interests of others… Or something mythological like that.
He showed that destructive streak while in opposition. He then defended the total opposite from what he is defending now and got hammered by his political friends in Europe. In that there was a perverted logic, as he wanted to woo the Greek voter to make him Khalif instead of the Khalif. What the logic now is, I do not know. Probably, like in any good ancient myth, there is no logic. Just faith.
Personal relationships among leaders do matter and often are developed with face to face meetings. Obviously, the decision to give Greece the next €31 billion loan tranche will be based on the troika’s upcoming economic report and the Greek Parliament’s approval of budget cuts worth €13.5 billion.
Greece has to implement a version of the German economic model in order to get out of the crisis. That is, to have robust manufacturing and an export oriented economy, to save money and make long term investments, rather than to consume and import, borrow and look for short term profits. Germany is experiencing a health economic growth coupled with trade and budget surpluses and a sustainable public debt as a percent of GDP.
First of all Nicolas, why would Greece need to develop a German style economy? Why can it not develop it’s very own, unique Greek style economy instead. Why copy what others are doing, and which is obviously costing many many people their lively hood, their homes,their social welfare (in every sense of the word) etc. Do you really think an economy based on cheap labour, export of tonnes of stuff nobody really needs and a banking ponzi scheme on a gigantic scale is the way to go?
Secondly, anybody who seriously advocates taking the German economic model as an example for progress or development needs their head examined.
You are advocating rootless selfishness, unbridled production with complete disregard of its need or necessity, exploitation of a voiceless work force, corruption that dwarfs the Greek experience, and all the other niceties to go hand in hand with a pure neo-liberal philosophy. It’s not a very nice thing to wish on Greece…
As I already mentioned the idea is for Greece to implement a VERSION of the German economic model. You’re right, the median annual wage rate of increase in Germany was much lower than in other European countries, the wages of low-skill jobs were kept low, the retirement age was raised from 65 to 67 and some benefits were cut. It’s true that some German companies had been involved in bribery schemes worldwide in order to secure public works and military contracts.
The German economic prowess is primarily based on medium size companies, Mittelstand, where some wage and benefit concessions were made in exchange for job security. Mittelstand firms have low turnover rates, are export oriented in high-tech specialized niches, rely on cooperative labor-management relations, make long term investments, emphasize efficiency and product quality, provide educational opportunities to their employees, and through apprenticeships offer training to young people in high-skill jobs. As a result the German economy is the fourth-largest by nominal GDP in the world, the largest in Europe, it grew 3.1% last year, the unemployment rate was 5.4 % ( June 2012), the trade surplus reached € 133 billion (2011), the budget deficit was 1.7 % of GDP (2011), the public debt was 81.2% of GDP( April 2012), the gross external debt was 132% of GDP, and the German economy maintains a AAA credit rating. Simply putting it, Germany’s economic model is based on public debt sustainability, saving and making long-term investments and living within its means. It’s a good economic model for households, companies and countries alike.
The German economy is the 4th largest economy in the world because it is based on exploitation, their own and others. Like most people advocating this type of economy, you make 2 basic mistakes. You cannot create an export based economy without having others willing to import. This willingness is bought by the exporters, using a variety of means. In the German case, apart from wholesale bribery, it was the promise of cheap money, allowing heavy borrowing in order to pay for those exported products.
We all know what the result of that policy is. I’ll tell you again, get out of you cosy flat in downtown New York or where ever you are and come and have a sniff of the real world here, or in Spain, Portugal, Ireland, etc. Percentages, GDP,AAA ratings are meaningless. The poverty hidden by those meaningless symbols is only too real!
The second big mistake you make is assuming that it is ok to have an economy for the purpose of gaining financially. We cannot all gain financially, that is simply an impossibility, unless you accept the unlimited printing of money, which of course kills the economic model you promote, any version thereof. In other words, in order to gain financially, somebody else must lose financially. It is the simple law of action and reaction. The German bank accounts grow because of the austerity imposed on Greece, Portugal, Spain, etc.
The German people don’t even get the benefit from this. All it does for them is keep the illusion alive that they somehow have got it right. Until the austerity stops producing the goods, and the financial institutions turn on the German, Austrian, Dutch people to satisfy their unsatisfiable hunger for money.
That is the reality of your model, as experienced by more and more people every day. It doesn’t matter how well you dress up a pig, it remains a pig, stench and all. Despite giving it AAA ratings, high, meaningless percentages, etc.
The system is rotten to the core, serves the few (and growing fewer by the day) at the expense of the many (growing bigger every day), and the sooner the whole thing is blown out of the water the better for all, (except for those few currently profiteering on the back of all others of course).
You wrote “You cannot create an export based economy without having others willing to import… The second big mistake you make is assuming that it is ok to have an economy for the purpose of gaining financially”. On the first point you raised, the German economic model is based on manufacturing products other nations need. Specifically, cutting-edge, high-tech products such as vehicles, electronics, electrical equipment, machinery, pharmaceuticals, metals, chemicals and many others. By investing in R&D, focusing on quality and continuous product improvement most German companies are staying ahead of their competitors. Last year, Germany exported products worth € 1.288 trillion representing 50.1% of the country’s GDP-roughly six times Greece’s GDP.
Regarding the second point you raised, what I’m advocating has little to do with the creation of an economy for the purpose of gaining financially. The proposed economic model is based on having a sustainable public debt, saving and making long-term investments and living within your means. Are you willing to lend someone your own money knowing that he/she has a bad credit history, accumulated a large debt and spends significantly more money than he/she earns?
in other words,
the model you propose concerns debt, investments, means, but has nothing to do with money??? You scrapping the bottom of that barrel again Nicolas, one of these days you’ll go through it. Be careful.
As for producing things we “need”, I really do not see or agree with anybody needing overpriced flashy cars, weapons, electronics to guide the weapons, chemicals that destroy the earth we are supposed to live off and on,etc. This so hailed export economy exported 2.3 billion worth of weaponry in 2010. Needed products, really Nicolas?? Who needs pharmaceuticals with a contra indication list twenty times the length of it’s supposed benefit, just so that more pharmaceuticals can be sold to counteract the first one, etc? The biggest growing, and already largest market in that pharmaceutical market (which is artificially created and NOT a basic need!) are psychiatric drugs, doing all the damage they do. And taking that market to it’s absolute ludicrous top, have a look at this
Really Nicolas, necessary products? Come off it. It’s all a money game, and somebody has to pay for it. As Greece is finding out the hard way.
Again, the economic model you so admire is based on greed and exploitation, not on need and necessity. If it was, do you really think we would be in the shit we’re in?
There won’t be any concession from the Troika. Does it look like all the rages from the Greek people just 6 months ago are now totally lost?
What are the people thinking and wanting now?
Is it just too hot now to protest? When the heat breaks do you think there will be more protests in the streets?
it depends on the 11.5 billion euro measures…
Even if Greece gets more time its pritty much useless. They can not grow again untill they get out of the Euro and default. Without growth there will only be more misery till civel order breaks down.
Default dont mean all debt will go away but it will be restructured over time. Out of the Euro would make Greece competitive again. Ofcourse this will not be simple but done right offers a chance that in 2 years Greece can start grow again. That is a far better option then how the future is looking now for Greece.
Every day Greece waits makes it harder to recover later.