radical party wins Greek election

[Kadabra]

Well, I guess it's not really interesting unless you know a bit of background. So, here's some background info, simplified:

As some may know, Greece has found itself in a government debt crisis in 2009, when their government admitted that its debt was much higher than previously reported. The extremely high debt, coupled with the weakness in the economy, in simple terms meant that they could no longer find anyone to lend them more money and hence the country would go bankrupt. European governments, the European Central Bank and the International Monetary Fund launched a massive rescue package, worth in total around 250 billion Euros (or $280 bn USD), on the condition that Greece would become more fiscally responsible and reduce government spending. The organizations were even able to negotiate lower interest rates and a debt reduction to 53% (!!!) on Greek government bonds to make Greece's debt more manageable.

Greece did implement the requirements for the rescue fund, but over the course of 5 years since, the reductions in government spending, increased taxes and other requirements have proven to be very unpopular. Unemployment was at record levels, with many greeks living in porvery. Elections were called, and when a party promised things like:
-Add 300,000 jobs
-Increase min wage
-Increase pensions
-Tax cuts
-Demand more debt forgiveness from Europe
-Halt sales of government assets

...well, that brought us to now.

They won by a landslide, despite being a far-left party that no one took seriously before. I personally find it interesting how people could buy into this.

Even more interesting is that the anti-austerity promises the new government made clash with the requirements the previous government agreed to in order to receive rescue funds in the first place. As a result, Greek financial markets are in turmoil right now. Bank bonds are plummeting and there are reports of people withdrawing their cash, as they lose confidence in the viability of their country's banks.

Have you been following this story? Where do you think things will go?

 

[Jolene]

I found this result to be amusing personally. Not because of political bias but because of how utterly unrealistic the promises this government made were.

Needless to see this will be interesting to watch.

 

[Fig]

As unrealistic as the promise of austerity actually accomplishing anything positive beyond creating banker-boners.

 

[Saucedo]

This election has made me laugh. The new radical government, are formed of 2 parties that have no experience of governing whatsoever, and that apart from shouting no more austerity have nothing in common what so ever, and have made a set of pledges that are all contradictions and impossible to meet. Politicians rarely achieve everything in their manifesto, but I've never seen politicians actually having competing contradictions as policies.

Greece was on the brink of collapse during the height of the financial crisis but the Troika, of European Commission, European Central Bank, and the IMF, helped out Greece in return for Greece getting it's house in order after the situation had stabilised. Greece is still heavily reliant on the Troika's money and on February 28th they will need a new instalment from them to be able to pay all their bills, and already Syriza has said we are not going to go along with the conditions you set. Syriza has also said they will not default, well which is it going to be? If you refuse to meet the Troika conditions, they aren't going to give you the bailout money you need to avoid yet another default.

In the end Syriza will take a long hard dose of reality, and realise that they are in no position to be making demands or threats. Once this happens, they will appear mainstream, the radicals that elected them will turn their backs and say "you are more of the same you're just like the rest etc" and will go and find another young radical to rally behind.

 

[Nero the Giant Whiscash]

This election has made me laugh. The new radical government, are formed of 2 parties that have no experience of governing whatsoever, and that apart from shouting no more austerity have nothing in common what so ever, and have made a set of pledges that are all contradictions and impossible to meet. Politicians rarely achieve everything in their manifesto, but I've never seen politicians actually having competing contradictions as policies.

Greece was on the brink of collapse during the height of the financial crisis but the Troika, of European Commission, European Central Bank, and the IMF, helped out Greece in return for Greece getting it's house in order after the situation had stabilised. Greece is still heavily reliant on the Troika's money and on February 28th they will need a new instalment from them to be able to pay all their bills, and already Syriza has said we are not going to go along with the conditions you set. Syriza has also said they will not default, well which is it going to be? If you refuse to meet the Troika conditions, they aren't going to give you the bailout money you need to avoid yet another default.

In the end Syriza will take a long hard dose of reality, and realise that they are in no position to be making demands or threats. Once this happens, they will appear mainstream, the radicals that elected them will turn their backs and say "you are more of the same you're just like the rest etc" and will go and find another young radical to rally behind.

Russia may bail them out as seen here

 

[Jolene]

This election has made me laugh. The new radical government, are formed of 2 parties that have no experience of governing whatsoever, and that apart from shouting no more austerity have nothing in common what so ever, and have made a set of pledges that are all contradictions and impossible to meet. Politicians rarely achieve everything in their manifesto, but I've never seen politicians actually having competing contradictions as policies.

Greece was on the brink of collapse during the height of the financial crisis but the Troika, of European Commission, European Central Bank, and the IMF, helped out Greece in return for Greece getting it's house in order after the situation had stabilised. Greece is still heavily reliant on the Troika's money and on February 28th they will need a new instalment from them to be able to pay all their bills, and already Syriza has said we are not going to go along with the conditions you set. Syriza has also said they will not default, well which is it going to be? If you refuse to meet the Troika conditions, they aren't going to give you the bailout money you need to avoid yet another default.

In the end Syriza will take a long hard dose of reality, and realise that they are in no position to be making demands or threats. Once this happens, they will appear mainstream, the radicals that elected them will turn their backs and say "you are more of the same you're just like the rest etc" and will go and find another young radical to rally behind.

Precisely. They are negotiating from a position of weakness. It's tantamount to a prisoner demanding to have his sentence halved. Nobody is going to bother with him.

 

[jayrachi]

Not terribly surprising that people bought into the first glimmer of hope in their bleak lives. Unfortunately that glimmer is shining off a pair of teeth that'll do nothing but bite them when the time is right. Good luck Greek citizens. I'm sure you'll need it now.

 

[Fig]

The Troika has more concerns than merely making greece slash slash slash (like the impact of a greek debt default and/or countries leaving the EU on EU credibility and Euro credibility), that make the negociations not 100% one-sided. Though still rather one-sided.

The dogma of austerity still need to die. Yes, govt need to control their spending for a better economy. But crash courses of CUT ALL THE THINGS just crash the economy along with the spending, torpedo all but the very upper class, and leave the state nearly as crippled after the fact than before, because a crashed economy and impoverished middle class can't sustain state spending either.

 

[Dorothy LaRouge]

Interesting policy proposals from a leftist party. And hell, anything's better than Golden Dawn...

 

[lavachickens]

If the new government do indeed pull out of the EU, I wonder what it'll mean for the governments in similar situations to Greece. That could be the most interesting part of all this.

 

[zakisrage]

Personally, I'm glad Golden Dawn didn't win. We don't need Greece to turn into a fascist country.

 

[Kadabra]

It would seem that the fallout from the result of this election is still ongoing.

As a recap: With Greece choosing to violate the agreement reached between it and European organizations and nations which offered it the $280 bn USD aid package, Greece stopped receiving bailout cash. At the same time, Greece still has to pay its bills: Namely government pensions, salaries, etc, AND make periodic payments on its debt to its creditors. The leftist government has prioritized government spending over debt payments, but has still managed to find just enough money lying around to make the debt payments at the last moment. Last time, they had to raid their emergency reserves to make the interest payment. For the payment coming up this June, however...

Greece hasn't got the money to make June IMF repayment: interior minister

...looks like they're stuck for real. Or perhaps it's just more negotiation tactics/BS. What do you guys think?

Oh, and here's the other upcoming payments Greece has to make:

Source: BBC

---

The way I see it, this whole mess is incredibly ridiculous and the only people who really benefited from this election so far are ... the people who got elected (I suppose you could say the same in most elections, though it's far more painfully obvious here.) The constant instability has killed any hope for real economic growth.

Picture yourself as a bright individual living in Greece with a great business idea--would you set up a business in Greece right now? With the inability to get loans or investment, economic and government policy instability, plus the insane government regulations on business and taxes (you have to send them a sample of your poop in order for you to register a business... WHY??) Chances are you'd be taking your idea and moving elsewhere.

I'm interested to know what others think about the current developments (or lack of thereof), where do you think this will be going, and the like.

 

[henrymidfields]

Mind you, though, in terms of debt-to-GDP ratios alone, Japan is a lot worse. Last time I checked, Greece's ratio was around 160%; Japan is over 200% of debt-to-GDP. Sure, apples and oranges, but there's only so much debt a country can take. In fact, when I first heard about Greece's financial crisis, I was puzzled by why Greece and for that matter, Italy and Spain, were seen as the worst debt-laden...

 

[Kadabra]

ECB to turn off emergency help for Greek banks - BBC News

If true, things are about to get extremely messy.

 

[Iteru]

In my opinion, deserved. Tsipras has been messing about for far too long and was naive to ever think he could get a one-up on the creditors. Time for reality and sense to finally kick in.

 

[Kadabra]

Reality and sense is about 5 years overdue (or far longer, depending on how you want to count.) One of the biggest screwups here is that Greece has done very little in terms of implementing real structural reform during the time they've been fed bailout money. Tsipras then got elected (with a silly mandate, as per first post), and in a way, he did a good job at showing the country how bad they've fucked up. May post something a bit more in-depth later.

...in the meantime: Greek debt crisis: Banks to remain shut all week - BBC News

Well, that's that. Capital controls have been implemented. People are essentially shut away from their money.

 

[Pandora]

Greece was destroyed by the neo-liberal right, all of Europe is in crisis, only those who got rid of the shit was Germany and still is worse than when entered. So in this case, it's a matter of choosing the less bad. .

The situation must be macabre to elect them. Good look to them. They will be under constant proof. It is expected that Syriza do not be so radical when their speech crossed with reality. If you get into a spiral of debt , the solution isnt you will simply saying to your creditors that can not pay its debts.

It's pity a country in this century still believe in "free lunch" or in a State that promises spend more than they earn, right now that apparently tightening in spending was beginning to take effect. They want to raise wages and investments and reduce taxes. First consequence will be the default on debt and total loss of confidence iof the European Union, they may be excluded from the euro area. In addition to completely close the door to foreign investment

The route Greece is taking remember much what is happening here in Brasil. Hosted the Olympic Games and years later broke. Just like what happens here, a country that hosted a world cup in 2014 , but the superficial media BigBanana never establishes a relationship with the orgy of public spending . Greece may be another country that falls into the clutches of populism and completely ideological promises.

I dont think the party has bad idea, and I was in the past a fierce leftist. But nowadays I think it would only work on another system, and for this system ever happens, it does not depend entirely on Greece. Anyway Greece will function as a laboratory.

 

[jayrachi]

Greece’s Bailout Expires, Becomes First Developed Country to Default on IMF Payment | TheBlaze.com

With its failure to repay the roughly 1.6 billion euros ($1.8 billion) to the IMF, Greece became the first developed country to fall into arrears on payments to the fund. The last country to do so was Zimbabwe in 2001.

After Greece made a last-ditch effort to extend its bailout, eurozone finance ministers decided in a teleconference late Tuesday night that there was no way they could reach a deal before the deadline.

“It would be crazy to extend the program,” said Dutch Finance Minister Jeroen Dijsselbloem, who heads the eurozone finance ministers’ body known as the eurogroup. “So that cannot happen and will not happen.”

“The program expires tonight,” Dijsselbloem said.

 

[Jimmy 3 People 0]

So this is working out really well for ya, Greece. Reeeeeally well. [/sarcasm]

 

[Krash]

With the country effectively hitting the economic pause button last week, it seems as though the outcome for Greece is bleak. Sure, they could sell off government assets and hike taxes, but unnecessary benefits and whatnot, but in the end that would only cover a portion of what is owed.

Short of exiting the Euro (which in itself is not the best idea), I don't really know what else can be done. Granted, I know very little of economics.