Greeks vote to reject incumbants, austerity

[GlennB]

I think the fact that Varoufakis had the time and inclination to write and organise this book at a time when he should have been devoting 100% of his professional energy into his ministerial duties on behalf of Greece speaks volumes (no pun intended). What a joker. And a fame/money-chasing joker at that. No wonder the Troika ended up refusing to deal with him. And of course it reflects extremely poorly on Tsipras and other senior Syriza figures that they put this clown into such a critical post.

It was written in 2011, so I imagine he's simply updated it and republished?

eta: The Amazon entry for the original mentions a "newer edition" available.

 

[McHrozni]

I can only compare it to the UK and we live in a rural spot, but it's relatively heavily geared towards cash. There's a sizeable minimarket down the road here where I asked about paying by c/c and they were apologetic about not having the equipment. My dentist* is in a bigger town down the road and she has to c/c machine either, and so on. And many older folks don't have a c/c or d/c at all, hence the effort to open the banks for pension payments.

*And this is part of the worry. She worked in London for some years but came back to escape the city hassle and lead a less wealthy but nicer life. She could work abroad at the drop of a hat, and a lot of skilled young Greeks are looking to do exactly that.

What's c/c and d/c? Cash & carry and ...?

McHrozni

 

[The Don]

What's c/c and d/c? Cash & carry and ...?

McHrozni

I guess Credit Card and Debit Card...

 

[McHrozni]

I guess Credit Card and Debit Card...

Mm, okay - basically POS terminals are nearly absent in Greece. Thanks

I wonder why, they're supposed to be cheaper than operating with cash. There is greater possibility of tax evasion though, so that could be a reason.

If so Greece should introduce greater expenses for operating with cash, and reduce the costs of operating cashless as part of the reform package. POS transactions are more traceable, so it could realistically collect more taxes.

But of course, the current crisis has severely damaged the perception of how good this is.

McHrozni

 

[GlennB]

Mm, okay - basically POS terminals are nearly absent in Greece. Thanks

No. Just less common.

 

[McHrozni]

No. Just less common.

It's a matter of what you're used to. I almost don't use any cash, anywhere. Not being able to pay a dentist with a debit card is to me

McHrozni

 

[GlennB]

“We are now waiting for precise proposals from the Greek prime minister, for a programme that will allow Greece to return to prosperity. It is urgent to have these proposals so we can find a way out of this situation,” said the German chancellor, Angela Merkel, after talks with her counterpart, the French president, François Hollande.

That would be the Varoufakis/IMF programme then, or something damn close.

 

[ddt]

Mm, okay - basically POS terminals are nearly absent in Greece. Thanks

Oh, hotels and restaurants have them just fine, as I noticed when I was in Athens in January.

I wonder why, they're supposed to be cheaper than operating with cash. There is greater possibility of tax evasion though, so that could be a reason.

The costs of using POS transactions also depend on how many are done. It can just be a matter of being a bit behind the times. Greece certainly isn't the only country.

When I moved from Holland to Germany in 1993, I encountered exactly the same. In Holland, most shops already had debit card terminals - and before that, it was common to pay with (guaranteed) cheques. In Germany, OTOH, the day-to-day economy was wholly based on cash. Paying cash at the supermarket, paying cash at the gas station, etc. By now, you can pay with debit card anywhere in Germany too - though they still have some antiquated things like bankbooks for savings accounts.

It's a matter of what you're used to. I almost don't use any cash, anywhere. Not being able to pay a dentist with a debit card is to me

I don't think my dentist accepts debit or credit cards either. They send me an invoice.

 

[McHrozni]

The costs of using POS transactions also depend on how many are done. It can just be a matter of being a bit behind the times. Greece certainly isn't the only country.

I'm not implying otherwise, I'm saying Greece would benefit with catching up to the times in tax collection, and probably elsewhere as well.

I don't think my dentist accepts debit or credit cards either. They send me an invoice.

Hehe That's entirely acceptable too

McHrozni

 

[Oystein]

I'm not implying otherwise, I'm saying Greece would benefit with catching up to the times in tax collection, and probably elsewhere as well....

I saw a documentary on German public TV the other day (I believe phoenix or 3Sat - the politics and culture branches of mainstream ZDF public TV) about how Greece joined the Euro with fantasy key economic numbers that no one in Brussels or Frankfurt got to check until it was too late. They said that in the late 1990s, the Greek public finance administration was largely still doing almost everything by hand on paper, numbers were reported mostly via telephone.
No hints later in the program if and to what extent this has changed.

If true, that basically made it, and perhaps still makes it, nearly impossible to audit efficiently.

 

[Oystein]

An analogy is considering someone graduated yesterday from the School of Medicine, or worse, adding to that a postgraduate with theoretical studies in Medicine and field practice in laboratory research on cell tissues, is "expert" enough to direct and do everything in the emergency ward of a hospital.

If you can deduct how such expertise is obtained then you'll have got what I meant to say by "the kind of people who is needed for the job."

A minister is a top level manager - his job should be rather different from that of the experts in his staff. So I doubt from the get-go that a professorship in economics automatically makes for a good finance minister, or having been a general for a good defence minister (although the general stands a much better chance). Nor, for that matter, would a world-class sports coach make a good sports minister.

The medical professor who manages a large hospital needs not be a wizzard with the scalpel - the assistant doctor who cuts under my skin should better be good at that, even if he'd suck at organizing the surgery department.

A person who knows the topic may voir dire me about a knack that is not so uncommon in these lands the same way veteran soldiers with three years of warfare on their backs can spot who would make a good lieutenant or not.

I think your life experiences are valuable, and they give you a view and a level of understanding that I find interesting and educating. I feel that you make a lot of sense.

But - I don't have to trust you

 

[McHrozni]

I saw a documentary on German public TV the other day (I believe phoenix or 3Sat - the politics and culture branches of mainstream ZDF public TV) about how Greece joined the Euro with fantasy key economic numbers that no one in Brussels or Frankfurt got to check until it was too late. They said that in the late 1990s, the Greek public finance administration was largely still doing almost everything by hand on paper, numbers were reported mostly via telephone.
No hints later in the program if and to what extent this has changed.

If true, that basically made it, and perhaps still makes it, nearly impossible to audit efficiently.

Hm, interesting. I'm wondering whether the obsolescence is intentional. It's easier to hide corruption in that way.

McHrozni

 

[Childlike Empress]

I saw a documentary on German public TV the other day (I believe phoenix or 3Sat - the politics and culture branches of mainstream ZDF public TV) about how Greece joined the Euro with fantasy key economic numbers that no one in Brussels or Frankfurt got to check until it was too late. They said that in the late 1990s, the Greek public finance administration was largely still doing almost everything by hand on paper, numbers were reported mostly via telephone.
No hints later in the program if and to what extent this has changed.

If true, that basically made it, and perhaps still makes it, nearly impossible to audit efficiently.

Apparently they didn't mention the pretty sophisticated "legal" swap tricks that helped cook the books, and who did it for the Greeks.

[...] Now, though, it looks like the Greek figure jugglers have been even more brazen than was previously thought. "Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future," one insider recalled, adding that Mediterranean countries had snapped up such products.

Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date.

Such transactions are part of normal government refinancing. Europe's governments obtain funds from investors around the world by issuing bonds in yen, dollar or Swiss francs. But they need euros to pay their daily bills. Years later the bonds are repaid in the original foreign denominations.

But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.

In previous years, Italy used a similar trick to mask its true debt with the help of a different US bank. [...]

When the Italians were cooking the books in the late 90s, the head of the Italian treasury was Mario Draghi. By 2002 when the Greeks were doing it, he had joined Goldman Sachs as their vice chairman and managing director. Now he's head of the ECB, of course. They asked him some questions about these events but apparently toothless enough to still make him seem "qualified" for the job.

 

[Childlike Empress]

When I moved from Holland to Germany in 1993, I encountered exactly the same. In Holland, most shops already had debit card terminals - and before that, it was common to pay with (guaranteed) cheques. In Germany, OTOH, the day-to-day economy was wholly based on cash. Paying cash at the supermarket, paying cash at the gas station, etc. By now, you can pay with debit card anywhere in Germany too - though they still have some antiquated things like bankbooks for savings accounts

Until very recently a clear majority were still paying with cash in supermarkets etc. Now it's maybe 50:50, depending on where you are.

 

[The Don]

Mm, okay - basically POS terminals are nearly absent in Greece. Thanks

I wonder why, they're supposed to be cheaper than operating with cash. There is greater possibility of tax evasion though, so that could be a reason.

That may be part of it. Then again cash based receipts can be readily converted to cash based payments without having to go to the bank. I give William £25 in cash for cutting our hedges at the end of the Autumn, he can just take that £25 down to the pub. If I paid him by bank transfer, he's have to go into town to make a withdrawl.

edited to add......

Despite being financially sophisticated in many ways, Mrs Don prefers to do her budgeting with cash. We take out a certain amount each week and budget our "normal" spending including meals out and pub visits using that cash. If the money for the week is low then we won't go out and will have something to eat from the freezer or store cupboard instead of buying fresh ingredients.

 

[Oystein]

Apparently they didn't mention the pretty sophisticated "legal" swap tricks that helped cook the books, and who did it for the Greeks.

When the Italians were cooking the books in the late 90s, the head of the Italian treasury was Mario Draghi. By 2002 when the Greeks were doing it, he had joined Goldman Sachs as their vice chairman and managing director. Now he's head of the ECB, of course. They asked him some questions about these events but apparently toothless enough to still make him seem "qualified" for the job.

Oh, quite the contrary, the report was very much about those Goldman Sachs tricks and how they exploited legal loopholes. And also some not so legal loopholes. That was then. I am fairly sure most people here are already aware of the general mess that resulted in Greece being accepted to the Euro zone.
I merely replied to the topic of the Greek financial administration not being on top of the time wrt to tax collecting (and auditing) procedures.

 

[Childlike Empress]

Oh, quite the contrary, the report was very much about those Goldman Sachs tricks and how they exploited legal loopholes. And also some not so legal loopholes. That was then. I am fairly sure most people here are already aware of the general mess that resulted in Greece being accepted to the Euro zone.
I merely replied to the topic of the Greek financial administration not being on top of the time wrt to tax collecting (and auditing) procedures.

Your summary made it sound like the Greeks hid some dusted files in a cellar. You omitted the crux, which couldn't be further from that picture. And I'm not sure if "most people" are aware of the interesting career Draghi had in connection to these events.

 

[ddt]

A bit dated now, but here's an enjoyable sketch from a Dutch satirical program, from Feb 21st. It has English subtitles:

 

[aleCcowaN]

I tried to find a source for that claim, because it sounds rather outrageous. This is the best I could find:

http://prospect.org/article/east-asias-challenge--standard-economics

"Illegal capital flight has been punishable in South Korea with a minimum of ten years' imprisonment and a maximum of the death penalty"

Not a lot of details here, and it's still essentially second-hand, though I'd trust it a lot more than Chomsky. First, what's illegal capital flight versus legal capital flight? Don't know. Second, even if correct, a death penalty was only possible, there's no indication that anyone was ever sentenced to death (or even threatened with it) for the crime.

I don't know of any country that wants capital to come in and at the same time punishes capital which wants to go out.

Capital going out passing a complete screening and severe punishment for those who managed to send dirty money overseas, that I may believe.

 

[aleCcowaN]

A minister is a top level manager - his job should be rather different from that of the experts in his staff. So I doubt from the get-go that a professorship in economics automatically makes for a good finance minister, or having been a general for a good defence minister (although the general stands a much better chance). Nor, for that matter, would a world-class sports coach make a good sports minister.

The medical professor who manages a large hospital needs not be a wizzard with the scalpel - the assistant doctor who cuts under my skin should better be good at that, even if he'd suck at organizing the surgery department.

I don't understand. Does this mean you understood or accepted what I was telling you and you are rewording it?

I think your life experiences are valuable, and they give you a view and a level of understanding that I find interesting and educating. I feel that you make a lot of sense.

But - I don't have to trust you

You shouldn't. If you are prone to trust what you are said in a web forum then you should join and participate in some place devoted to scepticism, not here