Let Greece leave the Euro

June 19th, 2012 at 12:00 pm by David Farrar

Stuff reports:

Filippos Nikolopoulos, a sociology professor at Crete University and SYRIZA supporter, said that Tsipras’s fans were jubilant because they had won new force and authority by increasing their share of the vote so much on Sunday.

“We want Europe, we want to cooperate,” he said. “But we do not want to be subjugated by (German Chancellor) Mrs Merkel.”

Stathis Stavropoulos, a newspaper cartoonist famous for his drawings depicting German officials preaching austerity at as Nazi taskmasters, said the new conservative government would have the people of against it from the outset.

“Our dream of European union was very different,” he told Reuters. “It was a union of countries and peoples, not a union to serve banks and not a Fourth German Reich.”

Using the term for a Nazi regional leader under Hitler’s Reich, Stavropoulos added: “Our country is under occupation. How would you feel if they sent a Gauleiter to run your country and tell you what to do ?”

The cartoonist said he had nothing against the German people or other European nations. Indeed, he had never visited Berlin, Paris or London – but was familiar with Moscow, Beijing and Nicaragua from his Communist activities.

“The Soviet Union may have ended but not the dream of democratic communism,” he sighed wistfully.

I detest this blaming of , when in fact the poor German taxpayer has thrown billions of Euros at helping keep Greece solvent.

It is becoming clear the is a flawed concept. For a common currency to work, you need a common economy. I think a number of countries should and will leave the . This will allow their new currency to be set at a level which makes their economy competitive again.

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32 Responses to “Let Greece leave the Euro”

  1. James Stephenson (2,071 comments) says:

    It is becoming clear the Euro is a flawed concept.

    Becoming? Margaret Thatcher told us that 20 years ago, and thankfully she won the argument in the UK..

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  2. Adolf Fiinkensein (2,810 comments) says:

    Damned if I know why the Krauts don’t tell these Gleek Plicks* to fuck off and wallow in their indolent poverty.

    *For the still wet behind the ears, that’s a reference to Fresh Fish on Friday.

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  3. tvb (4,229 comments) says:

    Greece will leave probably in 6 months. Germany seems to be obstructing any attempt to mutualise the debt and instead driving the weaker economies into a depression. Germany through put its history had had the capacity to wreak countries but it is too small to provide solutions. The euro is finished because Germany will not look beyond austerity. Spain will use up all the Gail out funding. They cannot solve Italy or even France which has a big exposure to Greek debt. Once again Germany has wreaked Europe. Britain understands this well.

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  4. Michael Mckee (1,091 comments) says:

    Common economy!
    Bullshit.

    If you don’t have common values how can you have common sense?

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  5. Bevan (3,965 comments) says:

    @tvb, so Germany is to blame for not blindly coming to the rescue of those that could not (more likely would not) control their own spending?

    Let Greece sink, send a message that if your country spends and borrows outside of its ability to service then you are on your own.

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  6. wikiriwhis business (3,883 comments) says:

    Greece and Europe needs silver to protect against fiat paper currency govts keep devaluing and here’s the proof

    Hugo Price and Max Keiser can save Greece

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  7. RRM (9,585 comments) says:

    “We want free European money, and we want to be free to do what we want with it!”

    If only running a country in Europe was as simple as being a beneficiary in New Zealand eh?

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  8. adze (1,933 comments) says:

    Wasn’t the Euro created precisely as a way of ensuring that the German economy didn’t overshadow other Euro countries (and as a counterweight to the USD)? It seems the German economy wins either way.

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  9. James Stephenson (2,071 comments) says:

    ensuring that the German economy didn’t overshadow other Euro countries

    Not quite, but that’s certainly one of the positives that the French thought they’d get out of it.

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  10. KiwiGreg (3,211 comments) says:

    You’re quoting stuff quoting a sociology professor.

    Why would ANYONE think this was relevant? It’s just more vox pop masquerading as news.

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  11. KiwiGreg (3,211 comments) says:

    “Once again Germany has wreaked Europe.”

    LOL that’s right. Shoot the ant and give the grasshopper his home.

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  12. graham (2,245 comments) says:

    Filippos Nikolopoulos is a supporter of the Opposition – who lost.

    It’s hardly surprising he’s pissed off.

    And as for Stathis Stavropoulos claiming the new government “would have the people of Greece against it from the outset” – well, as 30% of the people of Greece voted for the damn thing, hopefully they at least will give it a chance.

    What is it with people? All over the world, they claim to want democracy, when what they really want is democracy as long as they win.

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  13. grumpy (248 comments) says:

    “….the poor German taxpayer has thrown billions of Euros at helping keep Greece solvent.”

    Bullshit! The “poor German taxpayers” are just subsidising the German banks who have lent recklessly. Just another bank bailout.

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  14. profile (13 comments) says:

    Spot on Grumpy. The Germans didn’t mind taking the fat Greek interest rates at the time but now cry foul when the party is over. It’s akin to whinging about a beggar spending your donation on beer and pokies.

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  15. Paulus (2,535 comments) says:

    Germany has an election this year.
    The Germans will not like it if Merkel waivers.
    Why should a sensible hatd working economy pick up the crap of Greece and others – its banks actually have limited funds available.

    Longer term watch the French economy collapse under the new Socialist Government, tax, borrow (from whom ?) and spend, spend.
    The next European war has begun – all against Germany.

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  16. grumpy (248 comments) says:

    “The next European war has begun – all against Germany.”

    Germany will win, Greece lost the propoganda war and will now be made an example of. The only time in my life I have wished the Socialists had won………………………..

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  17. kowtow (7,844 comments) says:

    kiwigreg is onto it,sociology professor and a supporter of the far left,pfft.

    The Euro is a political concept ,part of the out of control growth that the Common Market or EEC has become.
    Context is everything ,the Germans knew the idea was stupid but due to a misplaced sense of guilt over WW2 they keep having to prove what good european citizens they now are.And evryone ,quietly or otherwise ,won’t let them forget.

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  18. tom hunter (4,527 comments) says:

    Nikolopoulos and Stavropoulos are simply a reflection of the conflicting desires of the Greek population itself; they want to remain part of the Euro so they can get access to all that cheap money as they’ve done since they joined – but they also don’t want to pay the piper.

    I’m afraid I can only shrug my shoulders. With Syriza floating along in the background the new coalition government might be able to renegotiate the bailout agreement – but I doubt it. And in any case it would change the facts on the ground, which is that ordinary Greeks will get screwed while money sluices through the country to keep their debtors afloat. Which means that this will all turn to custard again anyhow.

    From a political point of view Syriza should be quite happy as they’ve gone from nowhere to 17% of the vote in the last election to 26% in this one just a few weeks later: what will they be like after another year of collapsing healthcare and education systems? And after 5-6 years, which is the timetable the Euro clowns have set for Greece to get it’s debt/GDP ratio back down to 120% – the level that supposedly set this crisis in motion? No wonder Pasock wanted them in this coalition government; they want the blame spread as widely as possible.

    And as far as the rest of the Euro-zone are concerned, the “contagion” is not simply the spread of very bad problems, it’s also the spread of the solutions. The PIIGS are all keeping a very close eye on each other’s bailout deals and any difference in treatment – no matter the pragmatic reasoning about the unique aspects of each – will screw things up.

    For all the Greek screaming about the Nazis it should also be noted that Poland is still on track to switch from the Zloty to the Euro in 2015, as part of the whole entry into the Eurozone – and although they’ll have big questions should all this nonsense continue, I’d defy anybody to claim that their “occupation” memories are not far harsher than that of the Greeks.

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  19. tas (596 comments) says:

    It’s all too little too late now. These problems should have been addressed a decade ago at least.

    Greece has been poorly managed for too long. That is the fundamental problem, not the euro.

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  20. James Stephenson (2,071 comments) says:

    That is the fundamental problem, not the euro.

    …and Spain, Italy, Ireland? No, the Euro was a doomed project from the get-go, and unfortunately the Eurocrats are making things much much worse as they attempt to save their invested political capital.

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  21. mavxp (494 comments) says:

    Yes the Germans have benefitted from the Euro – making their industry hum as cheaply lent money to southern Europe was spent on Porsche Cayennes and Krups Coffee machines. But whose fault is that?

    A) The borrower (i.e. Greeks, Irish and Spanish) – for overextending themselves.
    B) The lender – (i.e. French and German banks) for not considering adequately the credit worthiness of the borrowers.

    Now to the solution: Who pays?

    Since it falls to the countries with surplus cash to bail out those in debt, Germany is compelled to bail out it’s banks via providing bail outs to the borrowers. However the tax payer/ voter is not happy with this prospect. The moral hazard of doing so is plain to see. The Greeks etc. must be incentivised to change their ways – reduce tax evasion, and corruption in government and the sense of entitlement the bloated government sector has.

    The alternative solution is to let Greece fall out of the Euro and deal with the consequences on its own – which would be quite horrific in the short term. But this would also show up the “European (dis)Union” as a failure. Germany must then bail out it’s banks anyway as they are overexposed to now completely worthless Greek debt.

    Answer: Both will pay.

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  22. wreck1080 (3,778 comments) says:

    I want to see what Iceland does — they are currently making applications to join the EU, and , presumably to adopt the euro.

    But, the application began before the huge greek crisis.

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  23. campit (467 comments) says:

    Shouldn’t Germany just leave the Euro?

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  24. tom hunter (4,527 comments) says:

    But whose fault is that?

    Before blaming the lenders it should be remembered that successive Greek governments basically lied to everybody about the state of their finances, and appear to have done so right from the start. That gave them credit ratings far higher than their real risk would have delivered, and hence they could borrow as cheaply as anybody else.

    Then there’s the fact that much of this lending was effectively via the ECB, in the sense that they kept the Euro interest rates low because most non-PIIGS economies showed no sign of inflation while growing strongly. But what cheap money can do in a productive economy like Germany is entirely different from what it does in a place like Greece.

    Finally, it should be noted that about 2/3′s of Greece’s government debt is owned by various national central banks and the ECB – and they took no “haircut” at all in the last bailout. On the other hand, the private sector did, losing some 75% of the value of the Greek bonds they’d purchased – 90% when one takes account of the fact that the “new” Greek bonds they were issued immediately (and predictably) dropped in value as well. Losses like that make the word “haircut” beg and scream for mercy. And those private sector bondholders were not just “the banks”, they included pension funds and insurance companies whose losses will directly impact ordinary people.

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  25. brucehoult (190 comments) says:

    @dpf what would it take for you to call it a common economy?

    Don’t they have free movement of goods, capital, and labour?

    The greek government (and all the others) are reduced to little more than big city councils. They just don’t seem to have realized it yet.

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  26. Michael (898 comments) says:

    The Nazi analogy is correct, it’s just used in the wrong context. The Germans were saddled with crippling reparations following WW1, they solved the debt problem by printing money. After the hyper-inflation the Nazis came to power on a platform of blaming others for all of Germany’s problems. Those who say out loud that “the Germans” are causing hardship in Greece are peddling a message that the far right want to push.

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  27. Komata (1,138 comments) says:

    From memory, the original reasons for what became the European Union was to provide a counter to the then very-strong US Dollar, and militarily to provide a ‘buffer’ against Russian expansion into Europe. The idea of a ‘United States’ of Europe made perfect sense at the time, a situation helped by the military treaty which became NATO. Proponents of the idea argued that a ‘United Europe’ would have advantages in respect of a common currency, and (hopefully) a ‘common culture’ . This latter idea willfully overlooked the events of the last few centuries but the optimists were extremely persuasive. France bought into the idea very enthusiastically, seeing it as a counter to its traditional enemy across the fence, with the added advantage (for the French) of making that country once again important in Europe ( remembering that de Gaulle was in power, and with a nuclear capability – something Germany didn’t have!!) Notably, most residents of Great Britain did not want a bar of the whole idea, but were dragged kicking and screaming by their political ‘masters’ into a semi-defacto arrangement which resulted in the imposition of European rules on a very unwilling and resentful populace. A referendum, on the whole question of membership (called for years ago), is pending. Despite all the platitudes of the European politicos, national aspirations have not been extinguished, and the ‘we are all equal together’ idea has not come to pass, and may well be a factor contributing to the eventual demise of the erstwhile ‘United States of Europe’ The British are likely to disengage themselves, and following their lead, it will be interesting to see what develops – only time will tell.

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  28. nzd.gbp (130 comments) says:

    It seems to be generally accepted these days that to share a currency you need a shared economy. This is not true. That’s like saying you can’t go to a gold standard because you then have no ability to devalue your currency to become competitive. It’s not the relative nominal level of your currency that makes you competitive, it’s the value for money you provide. It’s whether or not you live within your means or whether you require constant debt growth to fund your lifestyle. The currency is not the issue. The issue is that, like all socialist set ups these days, those who pay their taxes, innovate, have a work ethic, have hard wrought skills, have been tapped by those who have none of these things but who can vote to demand the same lifestyle. Greece deserves to be caught in a debt trap. They borrowed the money and spent it on bureaucrats rather than development. They took the money from their own children and lived it up thinking they could get yet another loan or bailout and then die of a comfortable old age before they had to pay it back. And amazingly, the younger generation is voting to have those older greeks in their earning years be able to pass even more debt down the generations because they too now need welfare to survive. What a legacy.

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  29. PaulL (5,961 comments) says:

    It’s not, in my opinion, as simple as people present.

    The Greeks joined the euro, and that meant they got lower interest rates, as effectively people thought they were lending to “Europe.” So, the Greeks, who used to borrow at 15%, could now borrow at 6%. Funnily enough they borrowed like crazy.

    Flipside, the Greeks used to get along by devaluing about 10% a year, to make up for their appalling productivity. So that 15% was made up of 5% of interest, and 10% of currency risk – the average Joe just didn’t know that. So they grew gradually more uncompetitive.

    At the German end, they had the opposite. They’re very productive, but their currency rose every year, which kept their growth rates down. Once they joined the Euro their interest rates basically didn’t increase (nobody worked out they were now effectively underwriting Greece). But their currency was weaker – so their incomes went up a lot. Germany has made out very well.

    In summary, the weak economies do poorly from the Euro, the strong economies do well.

    Now we come to the bail outs. Really, the Greeks are crazy to be saying “I don’t like the conditions you’re putting on this free money you’re giving me.” That’s just rude. At the same time, those conditions are going to destroy the Greek economy, so can’t blame them for asking for a bit more time.

    On the other side, the Germans stand to have a lot of pain if they don’t do the bailout. If the Euro implodes then the one off cost will be a lot more than the bailout would cost. And they’d also lose their year on year holding down of the currency (similar to what the Chinese do, but a bit more hidden). Against that they have to set the moral hazard – sure, bailing out Greece might be OK, but what about Spain, France, Italy? Can they afford to bail out all of Europe? Maybe everyone needs a wake up call – once we stand Greece up against the wall and shoot them the rest will be scared.

    All more complex than many make out.

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  30. brucehoult (190 comments) says:

    @nzd.gbp exactly right. A currency pegged to a commodity (such as gold) is effectively having the same currency as everyone else pegged to the same commodity. Either way, the government loses the tool of stealing from everyone’s savings by printing money.

    @PaulL my memory of the time is that, prior to the Euro replacing it on 1/1/99, the DM and the NZD stayed within a quite narrow range of each other for a quite extended period of time: 10 or 15 years that I was watching them.

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  31. OECD rank 22 kiwi (2,819 comments) says:

    I thought Germany had ended World War I reparations.

    The Euro 2012 game between Germany and Greece is going to be awesome.

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  32. unaha-closp (1,130 comments) says:

    Germany, Finland and the Netherlands should leave the Euro.

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