tag:blogger.com,1999:blog-8764541874043694159.post4025924125179074494..comments2024-03-29T10:48:38.142+00:00Comments on Coppola Comment: What on earth is the ECB up to?Frances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger74125tag:blogger.com,1999:blog-8764541874043694159.post-13105302423022488312015-03-20T08:04:01.357+00:002015-03-20T08:04:01.357+00:00This comment has been removed by the author.Anonymoushttps://www.blogger.com/profile/12941768242699213044noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-71455126577623323322015-02-11T13:11:45.409+00:002015-02-11T13:11:45.409+00:00If Greece gets out and collapses into hyperinflati...If Greece gets out and collapses into hyperinflation and rioting it might give the Spanish pause, no matter how much they dislike the PP.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-60967871644463019702015-02-10T21:42:23.753+00:002015-02-10T21:42:23.753+00:00I completely disagree on this. Podemos will gain m...I completely disagree on this. Podemos will gain more power if Syriza fails. Spanish electorate wouldn't accept a bow to the Germans and not a ultimatum as such. They are fed up with PP and most of PSOE. If you understand Spanish try to see some of the current debates at TVE or similar.<br />If Greece gets out, nothing won't stop the others to follow. Especially if Germany remains the same neanderthal austerity religion<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-67043402030262033262015-02-10T07:51:32.090+00:002015-02-10T07:51:32.090+00:00"Well obviously the ECB (and if I’m right, th..."Well obviously the ECB (and if I’m right, the politicians giving it orders) are not acting in the interests of pigs"<br />Well.. And why not? Are we not european? are we not enough people? Is the ECB our central bank or not? Should the europeans of the south to believe in Europe when all the decisions come from Germany?<br /><br />"and paid for by German taxpayers"<br />Are we talking about Greece here? Because only counting Italy and Spain, together have more money in Greece that the Germans.<br /><br />The idea that Europe economic crisis is the fault of the implemented politics is not naive. It's what the ORTHODOXY economist think (including some nobel). Proof of that ECB is going to start QE but, we are not going to recognize that we were wrong from the start, are we?<br /><br /><br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-4471817820644024742015-02-09T14:18:34.648+00:002015-02-09T14:18:34.648+00:00Great article.
There is another interpretation: t...Great article.<br /><br />There is another interpretation: that Draghi knows a lost cause when he sees one.<br />Perhaps Germany isn't the real stumbling block as this is not an existential threat for them.<br /><br />We should remember that decisions are taken by individuals not by countries.<br /><br />Spain would have much to gain from the EZ softening its stance, but Rajoy would have the most to lose.<br />Anything that looks like a victory for Syriza would feed Podemos. The Portuguese and perhaps Italian leaders may feel similarly, but with less urgency.<br /><br />The best thing for the leaders of these countries (although not the rest of the country) would be to see Greece pushed off the cliff and then to ask their own citizens if that is really what they want to vote for.<br /><br />So if Draghi thinks that the Greeks are going out unless they back down, he knows which side he has to be seen to be on afterwards.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-84721560756875830612015-02-09T12:48:30.298+00:002015-02-09T12:48:30.298+00:00Greece doesn't have to counterfeit anything. W...Greece doesn't have to counterfeit anything. With EURO QE they can just sell their T-bonds to the local branch of ECB.<br /><br />Banknotes are only a few per cent of money in circulation it would be very hard to operate using cash only. Unless they figure out how to get "counterfeit" deposits accepted in the international banking system this is not really an option.BTOhttps://www.blogger.com/profile/07742433311983036311noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-31692471541960402872015-02-09T00:36:53.825+00:002015-02-09T00:36:53.825+00:00I think you're right that this puts pressure o...I think you're right that this puts pressure on European governments to face up to what's coming, but I don't get the sense that anyone seriously thinks it can be avoided. This was a decision by all the central bank governors of the Euro Area to shield Europe as best as possible from further losses when Greece defaults. It disavows responsibility for most Bank of Greece loans to Greek banks, unless they're backed by EFSF notes or other quality foreign assets. It also effectively caps total BoG lending to Greek banks, because ELA is capped and their supply of quality assets is limited, which limits the contingent liability of having to plug a capital hole in the Eurosystem if Greece exits. The side effect they knowingly accepted is that there is a very limited amount of deposits Greek banks can lose from here before they run out of cash. This is much worse than the Cyprus scenario, as there's no bailout pending and that's unlikely to be decided quickly. Bank deposits are likely to be frozen and stay frozen for a while.<br /><br />http://globalizedblog.com/2015/02/europe-girds-for-greek-default.htmlTom Warnerhttp://globalizedblog.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-61218676115536201202015-02-08T13:29:06.231+00:002015-02-08T13:29:06.231+00:00Anon, That’s a circular argument. A Northern Euro ...Anon, That’s a circular argument. A Northern Euro (more or less aka Deutschmark) would be strong because North Europe’s export performance is (excessively?) strong. A North Euro would float, just like the US dollar, Japanese yen, etc etc, and that “float” at least in theory keeps a country’s external balance of payments in balance in the long run.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-22773874124347468142015-02-08T13:22:55.919+00:002015-02-08T13:22:55.919+00:00Well obviously the ECB (and if I’m right, the poli...Well obviously the ECB (and if I’m right, the politicians giving it orders) are not acting in the interests of pigs: if by “in the interest of pigs” you mean giving Greece etc never ending loans which they clearly won’t pay back and paid for by German taxpayers. The Troika (including the ECB) are trying to enforce a regime in which every country pays its way even though that results in severe social problems for pigs. But that’s an inherent problem for common currencies.<br /><br />Re the idea that Greece’s problems can be solved by a simple rise in demand, that is naïve. There could be SOME SCOPE for a little more demand, but any significant increase would just raise inflation in Greece which would make it even less competititive.<br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-28244914823689813972015-02-08T13:10:06.659+00:002015-02-08T13:10:06.659+00:00I published an article on my own blog yesterday ma...I published an article on my own blog yesterday making that point. All I would add to your comment is that having Greece print it’s own money is the equivalent of the various cities round the world which do likewise, e.g. Lewis and Bristol in the UK and Ithaca in the US. The latter local currencies are not the ideal solution, but they help a bit, plus they don’t cause havoc for the Pound Sterling or the US dollar.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-84841473619719830132015-02-08T12:42:41.645+00:002015-02-08T12:42:41.645+00:00 Sreak ironic....You are right anyway Sreak ironic....You are right anywayΖάχαρηhttps://www.blogger.com/profile/08416263338005015765noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-71662384522180895082015-02-08T11:31:04.777+00:002015-02-08T11:31:04.777+00:00Congratulations to Syriza for brilliant geopolitic...Congratulations to Syriza for brilliant geopolitics (so far).<br /><br />Greece does have an option which most have not mentioned: Greece could continue printing its own Euros. The ones with Greek faces on the coins and Greek words on the banknotes. It would be up to other countries whether to accept them or not...<br /><br />...but the thing is, it would be *incredibly advantangeous* for most of them to accept the Greek "illegally printed" euros. Because there aren't enough euros floating around. So if (for example) Spain, Italy, and France all agreed to take Greek euros... where would Germany be? Germany might be the one who had to leave the Euro.'<br /><br />I read somewhere that over 30% of the banknotes and coins in Victorian England were estimated to be counterfeit. This didn't matter; they performed their function admirably. The Bank of England and the Mint were not producing enough money and the counterfeits were valuable in increasing the money in circulation. Greek euros printed in contravention of ECB rules would have the same positive effect.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-58010219646652409602015-02-07T17:34:44.339+00:002015-02-07T17:34:44.339+00:00@Anonymous, 7 Feb. Interestingly, the whole concep...@Anonymous, 7 Feb. Interestingly, the whole concept and history of state borrowing derives from raising the money required for war. So at a time that the global economy is in actual or potential depression -- and politicians are too incompetent and pig-headed to do anything intelligent -- then war as a solution to economic problems may be a second best option.<br /><br />However, personally I would prefer that German (and other) morons would stop chanting the mantra "If you borrow money, you have to pay it back", and address issues of the real world rather than of German Protestantism. Guest(xenos)http://www.mmo.grnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-48691547939987647332015-02-07T17:03:32.229+00:002015-02-07T17:03:32.229+00:00greece will succeed by exiting eur and ue but it w...greece will succeed by exiting eur and ue but it will take decades [like poland succeed by finishing wight socialism] - but it will be road through hell - citizens will be literally destroyed by inflation. and these neo-communist-lunatics - it's beyond comprehension how naive one's could be to vote for something like that. and btw, i would love to live in reality where when totally broke you could thrive by spending more, don't have to pay back your debts - i would sincerely, literally love to live in such reality.deadinsidehttps://www.blogger.com/profile/18334626120730658778noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-63548438435024070072015-02-07T15:17:18.923+00:002015-02-07T15:17:18.923+00:00I have been arguing against such nonsense ad neuse...I have been arguing against such nonsense ad neuseam on various blogs for a long time now and surprisingly there's always someone new that needs to be "convinced". Are you all on some black PR agency's payroll ? :)<br /><br />Someone is very scared not because Greece might fail but SUCCEED.BTOhttps://www.blogger.com/profile/07742433311983036311noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-49516107119127971192015-02-07T11:56:59.925+00:002015-02-07T11:56:59.925+00:00nikolas, socialist systems didn't work too - a...nikolas, socialist systems didn't work too - and i'm pretty sure that it work much worst then sensible austerity and working hard for paying your debts - but you will have a chance for front row seat observing that very soon - i'm betting that greece will be second venezuela in europe in months if not weeks.<br />deadinsidehttps://www.blogger.com/profile/18334626120730658778noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-17007834064566618262015-02-07T11:08:31.881+00:002015-02-07T11:08:31.881+00:00It seems that you are not alone to think that Drag...It seems that you are not alone to think that Draghi has to act as a politician. But Draghi is a bureaucrat. He has to follow the mandate he has, he was appointed and not elected.<br /><br />Bailing out Greece has to be a political decision. The ECB is not legally allowed to bail out eu member countries. The ECB may have done that already - but it is arguing that it does not do so. The ECB has to argue that it assumes that Greece can pay its loans back. <br /><br />The ECB argues that if Greece follows the program by the troika the loans are not unsafe. Most economists and even politicians did not believe that. But a bureaucrat can make a mistaken judgment, this is not the same as explicitly violating the no-bailout-rule.<br /><br />The ECB having previously argued that under the condition that Greece is following program by the troika its purchases of greek debt are in its mandate, has to act now that Greece does not want to follow through. So not extending the loans is only logical if the ECB wants to save its credibility. <br /><br />A bailout for Greece is still possible, but this has to be a decision made by democratically elected politicians. The ECB may have given them some time, but it can not go on pretending if Greece does not play by the unwritten rules...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-79340865210255434242015-02-07T09:50:03.933+00:002015-02-07T09:50:03.933+00:00Spot on comments about Schäuble. That and Frances ...Spot on comments about Schäuble. That and Frances closing comments are the truth of the situation for Germany. Stephennoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-69933810584514057432015-02-07T09:21:16.392+00:002015-02-07T09:21:16.392+00:00I agree with Xenos. The trouble with a lot of econ...I agree with Xenos. The trouble with a lot of economic theory and commentary, some of it on this blog, is that it assumes economics and finance are automatically at the heart of all debate. In the long term this may be (partly) true, but in the shorter term it tends to be issues such as nationalism, international relations, political ideology, geopolitics and conflict that drive the decision-making process forward. Money can always be found to pursue these interests (when was the last war that ended because one or both sides had simply run out of money?). If Greece is forced out of the Eurozone then it will seek new friends elsewhere and the EU may come to regret the German attitude of just letting them go. Greece will exist in a 100 years' time. I wonder if the EU or Euro will?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-2233976576258195582015-02-07T05:18:11.779+00:002015-02-07T05:18:11.779+00:00Germany appears to be between a rock and a hard pl...Germany appears to be between a rock and a hard place; if it backs down and accepts Syriza's proposals it will strengthen anti-austerity parties in Spain, Italy, Ireland, France, possibly even Die Linde in Germany. If, however, it does not compromise at all and pushes Greece out of the Eurozone the results will most likely be even worse and Greece might drag down Germany and the rest of the Eurozone down the hill along with it, like you wrote. Perhaps they might find a middle ground, but if Germany does compromise in anything, I really hope Syriza will persist, even when the Grexit card is openly pulled. The current system of 100% austerity and 0% growth has not work, does not work, and even if it is applied unaltered for another 5 years it will still not work at all; it will just slice another 25% off the GDP of Greece, and unemployment will exceed 50+%. Sharpedonhttps://www.blogger.com/profile/10154151724668140312noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-40435015878415270392015-02-06T21:41:45.483+00:002015-02-06T21:41:45.483+00:00Yes... This is exactly what I also foresaw, and Ya...Yes... This is exactly what I also foresaw, and Yanis Varoufakis is way ahead of the curve! And so was I and a few others. The whole Credit Rating Agencies joint conduct has been beyond suspicious all along! Major agencies have come to understand this! Efforts by corrupt politicians to sell out European societies, hence deliberately wrecking the power of governments and key institutions, to the short-term false benefit of Global-reach Cos-Monopolists became apparent to those within with enough ethical conscience. What We The World have been witnessing is nothing less than The Most Dangerous Ongoing and Current Global Heist in Human History! It is as if in the days of The Old West ( days of Cowboys, Native American Indians, etc. ) a Town's entire population was busy on Main Street shopping and/or Enjoying a Carnival being held in the Town's Central Square, all while their only Bank was being Heisted and then some people begin to notice that Thieves are hauling tons of Cash and Other Liquid Assets ( Bars of Gold, Platinum, etc. ) and putting them on horse-drawn wagons, and more and more towns-folk people begin to stop doing all their shopping and what not and begin to also see the terrible crime that keeps on going on for many minutes; except that the Town is The World, the days of old are Today and Now, the Bank contains All Our Money, including that of The Sheriff, the Town Government Council, etc., and instead of mere minutes this ongoing Mega-Bank-Robbery has been taking place for many years now!!! But what the Bank Thieves did not count on was that their efforts to distract the Town's people with a Carnival in the middle of the Town Square had failed! Except that in Our World's Case the Carnival is this Very Real Set of Global Threats; from Severe Climate Instability to the Insanity of Psycho-bat-sh-t Ruthless Terrorist Thugs who have totally distorted things to fit their sick agenda! I have been saying this all along! So; what's next? Simple! The Thieves and the Carnival Operators serving them are Caught and are offered one of two options: either they nice and slowly, but not too slowly, begin to return most of what they have been Stealing and will then be let go free without having to be Locked Up in Jail and Sentenced to Prison, or they can take their chances in an all-out No_Okay Corral-style shoot-out! Except an all-out fight would easily end up with everyone losing everything forever! Best, The Free Advice ManJean-Pierre A. Fenyohttp://thefreeadviceman.yolasite.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-12550209305843109722015-02-06T18:56:55.899+00:002015-02-06T18:56:55.899+00:00I think you're basically looking in the right ...I think you're basically looking in the right direction, although the exact strategy details may differ. It's hard to tell at this point.<br /><br />My view is that it's mostly a cheap way to establish credibility ("we're tough") while not doing anything actually damageable (as you've explained), so as to (a) give the more enlightened Northern politicians something to reassure their electorates with and (b) it may play with internal ECB politics as well, get brownie points with the hawks on the governing council so that they don't actually do something stupid when it matters. It does make things clearer as well -- some idiots in the eurogroup may have wanted to negotiate on that thing and thus waste everybody's time if it was still on the table.<br /><br />On timing I see nothing complicated: it was done as soon as Draghi met Varoufakis, presumably explaining to him what was going to happen (or hinting) and why. Common courtesy and diplomatic propriety?<br /><br />Same point put in another way, maybe the ECB just wanted the German press to write that type of article:<br /><br />http://www.sueddeutsche.de/wirtschaft/schuldenkrise-ezb-genehmigt-griechenland-notfallkredite-in-milliardenhoehe-1.2338243<br /><br />Summary: "ECB strong with Greece, ELA backed by Greek central bank therefore any losses are for Greek taxpayers [sic!]". Hilarious, isn't it? <br /><br />(But however wrong arguably better than the outrage about Syriza's dress code elsewhere in the German press...)<br /><br /><br />And BTW here's my take on the Kosovar version of Grexit (which may or may not be relevant):<br /><br />http://commentisglee.wordpress.com/2015/02/06/the-greek-kosovo-scenario/<br />cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91785059515768081672015-02-06T18:52:19.043+00:002015-02-06T18:52:19.043+00:00Or, Germany will force Greece out of the EU, which...Or, Germany will force Greece out of the EU, which will bring Russia into play. The EU itself will start to collapse, and the USA will intervene to maintain a coherent western sphere of influence and the power of NATO.<br /><br />The book title then would be "When game theory meets political reality -- and why Germany tried (again) to destroy Europe".Guest(xenos)http://www.mmo.grnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-62097816026984092292015-02-06T18:52:13.211+00:002015-02-06T18:52:13.211+00:00So, Frances?So, Frances?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-52213327712122887462015-02-06T18:48:17.507+00:002015-02-06T18:48:17.507+00:00Greece does not buy arms and maintain large forces...Greece does not buy arms and maintain large forces just for fun, but because it faces an aggressive and expansionist opponent in Turkey. Turkey seized Greek territory in 1922 (just as it illegally occupied Northern Cyprus in 1974) and refuses to recognise Greek air space and the territorial waters of the their islands in the Aegean. There are constant non-lethal dogfights between jet fighters over the Aegean and there have been a number of incidents including mid-air collisions and 'accidental' weapon firings. Have a look at YouTube to see Hellenic Air Force imagery of clashes with the Turkish Air Force. <br /><br />Without this constant threat Greece would not feel under so much pressure to spend money it does not have on defence. Incidentally, if NATO members start declining to sell weapons for self-defence then that nice Mr Putin will certainly do so, at a knock-down price. Forcing Greece out of the Eurozone and perhaps the EU eventually will result in Greece becoming a de facto Russian ally, something already advocated by some in Syriza. That will really help European long-term stability and economic prospects.Anonymousnoreply@blogger.com