The potential for real trouble in Europe is that a failure to adequately address crisis in Greece may tip a financial system that is still very wobbly back into panic. I dont know why the core European powers are letting this Greece, Portugal, Spain situation to evolve, why they do not stamp out before it becomes seriously distabilizing and people starts to stampede towards safety?
Feb. 9 (Bloomberg) -- The euro traded near an eight-month low against the dollar on concern a European Union summit this week will fail to address Greece’s fiscal crisis, damping demand for assets in the region.Follow Up: I didnt know my blog had such power :-) ! Only two hours after publishing the above note, a senior German ruling coalition source called a press conference and said that euro zone governments have decided to help debt-burdened Greece. Wall Street is rocketing.
“Investors won’t be willing to take the risk to buy higher-yielding currencies unless organizations such as the European Central Bank and EU speak up to rescue Greece,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest bank. “If investors switch their attention to the fragility of Europe’s economy, euro weakness may accelerate.”
Europe’s currency dropped 1.3 percent last week against the dollar as Greece struggled to deal with its budget shortfall, the largest in the European Union. The country is trying to convince investors that the deficit, now at 12.7 percent of gross domestic product, can be brought down to the bloc’s 3 percent limit.
8 comments:
My original theory was that this was all Kabuki theater - that Germany would allow Greece to be brought to the brink, but not over it, pour encourager les autres. This may still be right and they are just playing the drama out longer than you would prefer.
But my new revised theory is that the people in charge are clueless and gutless bureaucrats incapable of making any decision. Any decision you make you can be blamed for later, but it is much harder to pinpoint personal responsibility for non-action.
Theory #3 is that the Germans are well and truly furious at the Greeks for their duplicity and are going to let the lazy southerners rot. The Greeks have been cooking the books for years and each day reveals new ways in which they have lied about their true financial situation (likewise, on an individual level, half the people in Greece are collecting undeserved disability pensions, cheating on their taxes, etc. - the whole basis of their economy is the scam and the perception in Greece is that it was OK to scam because the EU was paying for it). If they had told the truth they never would have been admitted to the Euro zone (and they should not have been - in the old days the same kind of tricks went on in Greece but at least the payments were all made in funny money. Greece went overnight from being one of the lowest cost of living countries in Europe to one where the prices were almost as high as in Germany but the labor productivity was not - so the difference was made up by the government who didn't really have the money either).
We have friends in Greece and I have visited. It is a lovely country filled with ancient monuments but it was clear to me that they did not really have a basis for a modern economy. Aside from the tourist sector and a few olive groves (most of which are consumed domestically), there was no real source of hard currency that I could see - no export industries to speak of, neither high nor low tech. There was a large construction sector based on the price bubble and subsidies from the EU for road building. Everywhere I went there were signs about how many millions of Euro were being sent by the EU for this or that road building project (not that these projects were not badly needed - Greek roads were death traps lined with hundreds of shrines to those who had perished).
K
K, see the Follow Up. The Germans are not letting the Greeks to rot, not that they dont deserve it. In Israel we say that Athens is a large Jenin, a Palestinian village.
So my original Kabuki theory was right - it shows you that you should go with your first instinct.
That Athens is an overgrown Jenin is not a coincidence - they are both overgrown Ottoman villages. In 1833, only 4,000 people lived in Athens and it has grown since then into a city of almost 4 million with only sporadic efforts at planning. The centuries of Turkish occupation gave the Greeks disrespect for following rules. The archetypical modern Greek hero is a bandit who lives free of government in the mountains. Only in Greece is the word "Klepht" (thief) viewed as positive. To imagine that these people could be made into obedient little EU citizen sheep like the Germans was never a real possibility.
Our friends took us thru a slum where their cleaning lady lived - very 3rd worldish and quite different from the tourist center. On the streets I saw men (Albanians?) wearing embroidered Persian slippers with long upturned pointed toes, like in some Arabian Nights cartoon. I didn't realize that such footwear even existed anymore.
K
The problem of Greece is that it is usurping the name of a great people from the Antiquity. We do not expect from the people of Algeria to behave like French, because the French left and they are Arabs. You dont expect Makedonians to be able to fight in a phalanx, they are South Slavs. Plato and his family have long left Greece and the people we call Greeks are something else.
I suppose they are the genetic descendants of the classical Greeks, at least some of them. I was not aware of any total displacement of the population, the way all the French left Algeria. The Jews of modern Israel are even less genetically the Jews of ancient Judea. But each people is shaped by their pre-independence circumstances and being ruled by the Ottomans for many centuries was not better for the Greeks than it was for the Palestinians. There has lately been an (at least in Turkey) upgrading of the historical view of the Ottomans but in fact the last couple of centuries of their empire (which is a LONG time) they fell into a backward torpor (read Mark Twain's descriptions of Palestine in An American Abroad) from which neither the Greeks nor the Palestinians have fully emerged. The Mexicans in N. America had some of the same torpor - being an imperial backwater saps your culture of energy and sometimes it's hard to ever get the motor running again on all cylinders.
K
I think that after Alexander conquered the East, there were many opportunities for Greeks in its vast empire. Anybody speaking Greek could find employment as a teacher, or in the administration or in the Army. Soon Greece proper was depopulated and the East became "Greek". Alexandria in Egypt had a population of hundreds of thousands, most of them Greeks. Even Caesaria and many other cities (like Neopolis - Naplus) were peopled by Greeks.
The current population of Greece may have little Ancient blood.
I think they have not changed a lot.
Look at the Fayum portraits (mummy paintings of Greeks living in Egypt):
http://www.mlahanas.de/Greeks/Arts/Fajum.htm
These are faces you could see in Athens today.
Here is a description of the appearance of the average Greek today from WikiAnswers:
"A typical Greek has thick and wavy to curly black hair. ... In general, there is a pronounced nose with the Mediterranean bump along the bridge. Skin color is rarely pale white but, rather, olive to dark brown. "
Does this not describe exactly the people in the Fayum portraits?
K
Describes Fayum people but not Elgin's marbles.
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