A French friendly suggestion on how to save Greece from default and collapse

@Philip Lane

I started to read the article but did not finish it. It is nothing more than an undisguised thuggish threat to impoverish Greece if it does not pony up all its debts due.
I would have serious issues about the credibility and independence of this writer. The paragraph below supports my accusation of a thuggish threat.

I hope the Greeks go for default. These debtor banks and nations need to get a revised crash course in capitalism. How dare this writer issue such a threat to a sovereign country.

My message to the Greeks is the following: all the people in the EU that support you now and are ready to finance you now (in Brussels, Paris, Frankfurt, Rome, Berlin…) will not accept that Greece
defaults.
In case of default,
A) the Europeans will stop lending further money to Greece at once ‐you do not keep on lending to a country that has just defaulted.
B) The ECB will not hesitate stopping refinancing Greek debt.

@ Philip

There’s a typo in the title, it should read “French-friendly”, not “French, friendly”…

A very light weight piece – Greek defecits do not solely benefit the Greek people.
http://www.youtube.com/watch?v=MLxhOzyF-Pg

The French state has numerous state or state affiliated industries that it subsidises to continue its technological advantages.
The French lost for the most part a contract for new Greek fighters as the Greeks chose the American F – 16 block 52 10 years ago.
It is probably still smarting from this
When other states are in the Euro the French banks would be put under pressure to buy foregin sov debt in exchange for industrial contracts for France – thus recycling both the interest & the industry back to the mother country.

In Ireland the core banks propelled private credit towards this juristiction – we bought BMWs and the like.
In Greece they bought the most sophisticated German / Diesel submarines in the world with sovergin debt – there is essentially no difference between this process.
Greece like Ireland is a user rather then a issurer of the currency – it does not benefit from this arrangement as neither the interest income or industry is recycled into the country – the periphery countries are effectivally colonies of the core banks and their operating bases.
If Greece or Ireland built cars , subs , planes and created most of the money then France & Germany would see no advantage in the Euro.
Greece kept itself afloat by relying on its chief export industry – tourism , when the core citizens decided to retrench in 2009 and 10 they no longer spent as much Euros on the Islands creating the crisis we have now.

I believe the core mercantile states of Europe particullary Germany are in deep crsis as they have not spent enough of their money on Generating internal wealth – they have relied on 2nd world states to keep debt off their books and thus benefit from a artificially lower interest rate.

Unless the ECB monetizes this ship will sink.

Crickey phillip, I’ve just realized – you may have cracked it! Where’s Eureka?

“Jacques Delpla is an influential economist in French and European policy circles.”

Just zoom in a bit on the right there

“….. French and European policy circles. ”

Thats it exactly.

It is certainly nasty, egotistical and quintessentially French.

Still, I can’t help wondering why so many Irish people have a sudden soft-spot for the plight of profligate Greeks…

We will support you (in many effective ways) if you accept to reform comprehensively your country. If not, we will cut our support and let you collapse. The choice for Greece is either a significant but viable slide, with the IMF‐EU program, with a European future ahead; or, otherwise, a lonely free‐fall without parachute and no European prospect.

Contrary to the nattering nabobs of negativism above, I read Jacques Delpla’s article as direct home truths to a friend.

Greece and Ireland have to take the lead themselves in promoting change.

Greece is a particularly bad case and Delpla is right to say if Greece is not interested in changing a deeply corrupt system, it should be handed its sovereignty back and let it see if if it can manage to be richer than Albania.

We can see in Ireland that a foreign scapegoat shifts attention from inconvenient issues and the trade unions now see default as more palatable than losing Irish bubble gains.

It’s the same in Greece and while there’s blame to go around, know where primary responsibility for the current crisis should be placed.

http://www.finfacts.ie/irishfinancenews/article_1022584.shtml

Jacques Delpa is overplaying his hand. He is throwing hard-won political stability and unity into the pot. He hasn’t realised that if the cards fall in a certain way he can lose it all.

There was good discussion between Greek economists at the LSE on 3 May 2011:
http://www2.lse.ac.uk/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=981

Those demanding massive reforms without any fundamental restructuring of the debt, as per Jacques Delpa, totally ignore the political realities. All stick and no carrot is not going to work with your low paid worker on the Athens omnibus.

Many people will pay a high price to preserve their dignity and their freedom. Playing hard-ball and offering nothing in return is not a smart overall strategy. It also ignores the fact that it makes it more difficult for the creditor to get paid as much as possible, and it minimises the incentives for the debtors. Also, time is a great healer.

@Fergaloh
We live withen a currency union – I have no problem with Germany increasing its effeciency ,it will probably always be more effecient then the Euro periphery.
I have a problem with the exporting of deflation.
The Germans refuse to spend the money they earn.
I can understand a distaste for vulgar personel over consumption.
Many great nations persue great projects to recycle this wealth – but Germany does not.
A 20 billion a year space programme or other inspiring program that would increase technological advancement would be my choice but other great applied scientific programme would fit the bill.
The rocket enginners who are paid a good wage can holiday in the Greek islands.
You cannot save debt – it leads to a subtraction of deposits.
Its completly pointless.
The banks are pursuing their own policey of deindustrialisation so that they will have a larger proportion of the pie – JCT has no problem with the concept of exponential interest in conjunction with static to falling wages.
This is pure feudalism.

Zhou
The problem in Greece is not at the bottom, it’s at the top
The wealthy are not paying their share and the politicos are not tackling that
The social unrest is because the bottom is getting screwed

Dork
Very laudable but the Germans didn’t force us to buy Mercs and inflate the housing market. IRL has reaped what it voted for.

@ Desmond

“Europe’s offer is generous”

I think that’s a hell of a stretch. Greece has made some horrible horrible policy errors in the last decade or so, but the European plan essentially entails little or no pain/loss (financially or politically) for the Eurozone, so i don’t see how it is “generous”. In fact, the EZ-core stands to gain directly from the in-built lending margins on the loans, as well as more generally from a non-default supporting the EZ project and its banks. This plan helps the EZ way more than it does Greece.

I wonder if we even should be discussing articles like this? After a few lines I simply clicked away in disgust.

If any one in Greece takes it seriously (which I hope they dont) we may well see the end of Greek membership of the EU and EZ followed soon after by the end of the European Project.

IMHO no sovereign state needs the kind of “friendship” this author is offering.

Maybe the author should consider advocating terminating Franceś membership of the EU and EZ. That way (if he is sucessful) he can discover how many “friends” wish to join him and his fellow countrymen in their new state of purity and fiscal responsibility.

@Fergaloh

Greece has loads of problems according to the speakers at that LSE event. It sounds like they are far worse off than us in terms of institutional problems.

It also seems fairly clear that they are not going to reform without a certain amount of crisis and a big stick hanging over them. At the same time, in the long run we are all dead so things could go very sour unless some medium term benefit is on the horizon.

Greece will default eventually no matter what medieval funding devices Mr. Delpla might dream up. The important thing is not to miss the opportunity for reform by whipping he horse to death. The right balance has to be found.

@Ludwig
We are essentially paying vast sums to vast numbers of financial engineers in London , Frankfurt and other financial centres so that they can smoothly deindustrialize to a strange modern feudal system.

I prefer the idea of reaching for the stars myself – once the Americans boasted that their Germans were better then the Russian Germans – now it seems Germans has no ambition to achieve anything of substance other then just balancing monetory books.
Money is just a instrument – it is not a goal in itself.
Alas many men have become broken during this period of monetarist malice.
Men without the spark of boyhood are broken sorry creatures
http://www.youtube.com/watch?v=iGv64mFJ2E8

We are all victims of the Club of Rome agenda – it has destroyed the west.
But most of us cannot see as we have been inside the fishbowl for far too long now.

@TRP

Actually a lot of East Germans found the “transition” to be very difficult.

As a result a lot of them complained quite bitterly about their difficult circumstances and I suspect there were a lot of post re-unification”winners” who uncharitably described these complaints as “whingeing and moaning”.

IMHO the only Europeans who describe Irish people as “whingers” are a few Irish people.

Even those Europeans who “are not so liberal with their friendship” are just frustrated with Ireland, which is actually their problem and not ours, especially when they realise aggressive “strutting” does not get them very far.

In my experience most Europeans privately admire the way the Irish are peacefully but determinedly “fighting our corner” despite our small population and in the face of huge pressure.

One of the common fears within Europe is that the Irish may just “quietly slip away to the lifeboats” just before MV Euro keels over.

@ postmodernprimate

Sadly, I concur with this analysis.

I wish I knew what the right answer was, beyond educating people to avoid Ponzi schemes and live decent, frugal lives.

Talking of the relationship between capitalism and community, an associate and friend of mine recently said,

“Greed is good, but not if it comes at the expense of the Greater Good.”

@Ludwig

Naah, if everybody would live “frugal” lives we would kill the economy.
Every Euro somebody saves has to be borrowed by somebody else.
Reasonable moderation is the key.