German Chancellor Angela Merkel considers that the situation in Greece of strict austerity, bailout agreements and income decreases “is in a much better state than a year ago.” She also expressed confidence that when Greece implements the outstanding 100+1 austerity measures of the third bailout agreement and its revisions “more jobs will be created”, Greeks will have better prospects and will live happily ever after.
So much austerity…
won’t bring that much prosperity.
Greece is now in a much better state than it was a year ago, German Chancellor Angela Merkel said on Wednesday, speaking during a press conference. Once the Greek programme has been implemented, she added, “we will have relatively good prospects.”
“I hope and consider that Greece will implement all that has been agreed. Greece had some successful moments, for example, when an effort was made to issue some bonds. This has definitely generated some self-confidence,” Merkel said.
At the same time, she clarified that she was not in a position to promise anything to the Greeks, since she was not a Greek politician.
The only thing she could say, Merkel added, is that things were now much better than a year ago “when I worried a great deal more.” Wishing Greece every success, the German chancellor acknowledged that life was difficult for many people in the country but expressed her conviction that Greece will benefit from the creation of more jobs and, in this way, a gradual increase in prosperity.
Regarding the euro area as a whole, the German chancellor pointed to several encouraging signs, such as that fact that all member-states – including Greece – were experiencing economic growth, while the number of jobless was down and employment was rising.
“These are all good signs. I know that the problem of youth unemployment has not been overcome but with these figures we are in a much better position than we were 2-3 years ago. And in these countries this is due to bold reforms, whether in a programme or not,” Merkel added.
“I think the suggestion from (Finance Minister) Wolfgang Schaeuble to turn the European Stability Mechanism into a European Monetary Fund is a very good idea and it could make us even more stable and allow us to show the world that we have all the mechanisms in our own portfolio of the euro zone to be able to react well to unexpected situations.”
On relations to Turkey, the Chancellor said “I would like to have better ties with Turkey but we have to look at reality… This is a very complicated phase in our relations.”
“Our demand is clear that (all German citizens) who are detained there must be freed,” she added.
She also called for an extension of EU border controls in the passport-free Schengen area beyond a planned end in November. Austria, Denmark, Germany, Sweden and non-EU Norway introduced the ID checks in 2015 and have been allowed to repeatedly prolong them at set intervals in response to a massive migrant influx.
PS Just wondering what Troll Level German austerity politicians will have reached by September 24th. Even thought they are no “Greek politicians” – what a cheap, old-pub-style and clumsy nonsense by the Chancellor!-, they seem to write in the same book of narrative like the Greek government. It’s only that Merkel’s promises are directed to her voters using the usual political double talk when she addresses people in or outside Germany.
Of course it would ve been sooo much better if the European partners just agreed to send 20 billions a year to Greece so it could continue to run its pre crisis 15% deficits … oh 20 billions is not enough, here have 30….
I’d like to tell the pied piper where to stick his flute. In the past week I have seen families made homeless because their now pitiful wages can’t even cover rent. I have seen women with children choosing to starve so that their kids won’t. I’ve seen kids who have done well in the Panhellanic exams have their hopes of attending university crushed because their parents can’t afford to pay for their accommodation in another city… all this on just one street of an Athens suburb. All the bailout billions being given to foreign banks doesn’t make one iota of difference to the Greek people.
@Piedpiper Have you been to Greece in the last 5 years and seen anything? Of course not. You are probably some useless German financial man sitting in an office somewhere in Frankfurt (or even worse maybe, a Bankster!). Keep following Schäuble’s ideas to see what eventually happens to the EU. Wolfgang’s brain functions about as well as his legs. Thank God the Eastern Europeans are finally waking up and realizing that Brussels is nothing but the mortal enemy of every European country.
A great example of the German sense of humour!
It is always easy to complain about the solution the international community found to Greeces debt problem, but never do those people present a better solution that would have lead to a better outcome without a higher investment of money. What would you have proposed in 2010? Greece declares that it cannot pay its debts perhaps? That would have lead to all the countries with Greek debt would have in the end bailed out their own banks grumpily, while Greek banks (which held most of Greek debt) and Greece pension funds (close second) would have been bankrupt. So all of Greek savers would ve lost all their money in Greek banks (cause only the Greek state guaranteed the first 100000€, and that guarantee would ve been worthless), and pensioners would ve been out of luck getting money from their bankrupt pension funds.
So please, what great solution would you have offered in 2010?
best for 2010 would be: Leave the Eurozone. But Germany and France would have cut their wrists – for reasons everybody know about.
“War is Peace; Freedom is Slavery; Ignorance is Strength; Austerity is Prosperity…” Angela Orwell
@PiedPiper, your knowledge of international finances is pitiful, I suggest you go back to pre-school calculus and start over.
another case of insults, but no plan for what should happened in 2010: please educate us with your perfect plan that would ve gotten Greece out of its troubles in 2010 with your incredible knowledge of finances.
Greece leaves the Euro, goes to a rapidly devaluating drachme, inflation (driven by rising costs for necessary imports like oil and medications) explodes, foreign currency reserves (cause noone will accept being paid in drachme) collapse. Noone is willing to lend to Greece after this defacto haircut of Greeces debt, so Greece has to shrink its deficit from 15% to 0% in a single year. Great plan.
oh, spare me with this threat. anyway we talk about 2010, not after 2012, when GER+FR would kick out GR like a squeezed lemon after they had gotten rid of the GR bonds. GR was in much better negotiation position in 2010, sadly, GR’s top political leadership surrendered to creditors’ – see: German – demands without even firing a single bullet.
BTW: I never got a reply to my question: why lenders kept lending money to GR – before 2010.
Even my cat knows, there would not have been a problem with GRs finances if it wasn;t for the Lehman Brothers…
The solution proposed by Germany and forced onto everyone else was a solution for Germany and for bankers. It was not — and remains not — a solution for Greece and other countries with fiscal problems. What should have happened is that german and french banks were allowed to go bankrupt, along with some greek banks, and state banks established to put capitalism back on the road to prosperity. Since all of the EU has been managed by the Right for decades, the very idea of doing something intelligent like that was anathema. Far better, in their eyes, to pour hundreds of billions into private banks and make the poor of Europe pay for it.
They kept on lending money to Gr because Greece agreed to the medicine. So they had to. As long as Gr agrees to everything they say, Gr will get the money.
Germany in reaction to the subprime morgage crisis created the Soffin fund with a volume of 400 billion € to bail out some of its major banks, nothing would have prevented Germany from creating a much smaller additional fund which which to bail out banks invested in Greece.
But as you say, Greek banks would ve gone bankrupt (as noone would have bailed those out), which means all savers with money in those banks would have lost all their money, as the Greek state who guarantees the first 100000€ in case of bank failure was insolvent in 2010.
I do agree generally that banking should go back to the a lot more boring times of the 80s, but tell me, who would ve bailed out the Greek savers in your scenario?
agreed that Greece was in a better position in 2010 than in 2012, but as i said above, Germany and France bailed out their banks from the subprime crisis in the US, a bailout of the far smaller losses with Greek debt would have been possible.
Why lenders (that is banks, not other European States) continued to lend money to Greece in the pre 2010 years. Simple a huge misconception that the Euro currency meant that all gouvernment debt in the Eurozone had the same risk, which is why interest rates of the various countries converged, although the Maastrict treaty explicitly forbid bailouts. With the introduction of the Euro, interest rates shouldn t have converged or at least not as much, as the risk of countries inflating away their debts was replaced with the very real risk of countries going bankrupt. Bankers, looking for that 0.1% higher interest rate they could get for Greek debt compared to French or German debt kept puring money in. There is always a problem when a country runs a deficit of 15% of GDP at the time of the peak of an economic cycle, even Keynes would agree with that.
@piedpiper. There are several axiomatic principles for neoliberal politicians and economists. One of them is that market forces should prevail, and the State should not intervene; another is that any interventions (along with all private transactions) should be completely transparent. What was done with the eurozone crisis contradicted these two principles so completely as to overturn the entire basis of advanced capitalist economies. The prioritisisation of financial capital over productive capital is the most horrific mistake that could have been made, and Germany made it.
This was not about saving Greek banks, or even the smaller task of helping Greek investors. This was an elaborate scam to save bankrupted German and French banks without allowing voters to realise it. It was also an elaborate scam to protect the rich investors in banks and make the poor across the entire EU pay for it. It has nothing much to do with Greece at all, other than the clear fact that Greece was in the front line of a collapsing eurozone economy and had a foolish and arrogant politician heading its new government in 2009. Instead of building politicial coalitions across the eurozone, Papandreou chose the ludicrous option of begging for money and whining about Greek citizens not paying their taxes (a false claim, for the most part). This allowed Germany to play a clever game that perpetuates Greek bankruptcy and keeps Germany afloat.
As for the cost of protecting ordinary Greek investors in Greek banks, this would have been trivial. The real costs has been protecting the investments of the rich and super-rich – which Germany eagerly chose to do. In the case of Cypriot banks subsequently, this was not done — because most of the big investors were Russians and not Germans, French, British, Americans, etc.
Your comments about economic cycles are irrelevant. The eurozone was poorly constructed (by German design) with an unclear mandate for the ECB and two guaranteed outcomes: that weaker economies would run increasing trade deficits alongside increasing debt and decreasing production, and that the eurozone system would collapse with a serious exogenous shock. Both of these events occurred (and had been predicted) yet Germany chose to blame Greek politicians and the tiny economy of Greece for what were German/French mistakes and stupidities made for political and non-economic reasons. We remain mired in this mess of refusing to deal with reality.
Your analysis is much more succinctly put than I could manage – I agree entirely
@Molly: thanks:-) I used to lecture economics in UK universities 25 years ago, so this sort of analysis is second nature for me. The important thing is to get people outside of Greece, Italy, Spain etc. to understand what has been happening across Europe. Bear in mind that I am very pro-EU (and consider Brexit to be a terrible error) but the eurozone is also making terrible errors…