Headline news: Greece doesn't use much electricity in the night-time!

From Sky News:

Greece breaks a new record by running the country entirely on renewable energy for five hours

Well done, you think, reducing its reliance on fossil fuels etc... until you read the small print:

It reached a record high of 3,106MWh (megawatt hours) of electricity at 9am local time (7am UK time), according to IPTO, the country's independent power transmission operator.

Yup, during night-time/dawn period, when electricity consumption is only a fraction of daytime peak usage.

So this sort of statement is jumping the gun a bit:

Nikos Mantzaris, a partner at think tank the Green Tank said last Friday's performance was important because "it shows that a 100% renewable electricity system is within reach in Greece, a concept that was considered impossible by most opinion and decision makers in Greece before".

I'd consider this a 'gotcha' worthy of Ali G.

Fun Online Polls: Abroad and The News

The responses to last week's Fun Online Poll were as follows:

Abroad. All very grim, all very tricky.

Waves of migrants in the Mediterranean - 44%
Isis and Syria - 16%
Iran nuclear deal - 11%
Grexit or not - 7%
Ukraine-Russia war - 5%
Ebola - 5%
Chinese islands - 4%
Other, please specify - 7% (4 votes)

Going by the headlines, it's the waves of migrants which are people are concerned about most. My approach is the same as on anything else, the UK government should do whatever is in the best interests of the existing British population/electorate as a whole.

It appears that people still haven't quite got the hang of the "Other, please specify" option. Four people voted for it but only one person made a suggestion.
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This week's Fun Online Poll:

"What were you doing when you heard the news?"

Vote here or use the widget in the sidebar.

It's a Fry and Laurie one-liner, I think.

Fun Online Polls: Neo-liberalism & abroad

The results to last week's Fun Online Poll were as follows:

When writing an article for The Guardian, how often should you use the word 'neo-liberal'?
About once every sentence - 70%
Less often - 12%
More often - 18%

This week: abroad. It all looks very grim and very tricky to me.

Take part here or use the widget in the sidebar.

Greek "Sun and sea vouchers": Part 2.

Random left a comment on Greek debt crisis solved: Greece to issue "Sun and sea vouchers":

Can they be used to pay taxes? ;)

Obviously. The vouchers are pre-paid tax.

Having issued the vouchers, the Greek government has to force the tourism industry to honour them by levying a tourism tax payable in vouchers (just like any other vouchers - be they rationing vouchers, nursery vouchers or coins and notes).

So, for example...

Tour operators buy the vouchers from The Troika for near face value and use them to part-pay the airline companies and hotel owners.

Airline companies have to pay a certain number of vouchers for the right to land a planeful of tourists; hotel owners have to pay a certain number of vouchers each year, depending on how big or favourable their site is. Or the government just levies a fairly high nominal tax rate on them and accepts the vouchers in lieu of cash payment.

The airline companies and hotel owners can keep the cash element (their "net of tax" income) and give the vouchers back to the government as "tax".

The government then chucks the vouchers on a bonfire.

Greek debt crisis solved: Greece to issue "Sun and sea vouchers"

In round numbers, seeing as Greece makes up a lot of statistics anyway:

* Greece owes the Troika €200 billion
* 20 million tourists per year.
* Average spend on air fares and hotels €1,000 each = €20 billion per year.
* Half of this is actual incremental costs.
* The other half of what tourists pay for is stuff which Greece gets for 'free' or which are already in existence/paid for i.e. airport infrastructure, hotel buildings, landscapes and historical sites, beaches, blue sea and sunshine.
* Additional cash spend by tourists €500 per holiday.

So what Greece could do is issue the Troika 400 million "Sun and sea vouchers" entitling the bearer to €500 off the cost of airfares and hotel stays, pre-dated 20 million a year for each of the next 20 years. So Greece will be redeeming its national debt by giving away value which they themselves get for free.

We can assume that balance of what tourists actually spend more than covers the incremental costs (the airport and hotel staff, the food and drink they consume and other tourist tat like fridge magnets), so that's a break even.

All the creditors - the IMF, banks, the ECB and so on - will be given the appropriate number of vouchers and they can sell these to travel agents for something approaching face value, who then pass on the discount to people who want to go to Greece on holiday, so over the next 20 years the creditors will get their money back (albeit indirectly).

A sunshine backed currency. What can possibly go wrong?

Gloriously obvious headline of the day: "Acropolis Now"

Having said that, the whole banking and currency system depends on people believing in it (or more uncharitably, it is a confidence trick).

If people expect it to work, it will work; if they expect chaos, they will get chaos.

To use a crude analogy, in hunter-gatherer days, people collected and stored their own nuts. It was hard work, and what you gathered was your to keep, not for sharing with the whole band.

Fresh meat on the other hand could not be stored as they hadn't invented fridges yet. So when lucky hunters came back from a successful hunt, they would share it with the rest of the clan, including that day's unlucky hunters, on the understanding that next time somebody else had a successful hunt, they would also share, so in the long run, the meat got shared out fairly equally and eaten up straight away.

If some 'hunters' cheated by neither gathering nuts and so on nor bothering to ever catch any animals (i.e. running up debts to the rest of the clan i.e. printing currency), sooner or later they would be excluded from the meat sharing exercise and nobody would want to give away their hard-earned nuts either (i.e. these lazier members of the clan have 'defaulted' and their credibility and hence currency would be deemed worthless), so they had a choice - start collecting nuts etc or try a bit harder with the whole hunting lark.

And presumably it worked or else we wouldn't be here.

Oooooo, the irony..

Building on my earlier post, there is also this gem from the same article:

"...One CDU member who used to work with Mrs Merkel agrees. "[The announcement of the referendum] was the moment that things changed. Up until then we'd all agreed to work with the Greeks, support the Greeks, pay for the Greeks. All that was OK if they were willing to reform. Many Germans go to Greece to enjoy the culture, the food, the history.

"But they also go there and see what the [Greek] government has wasted its money on.

[I'm sorry, just run that past me again? Whose money has it wasted exactly?]

You see these huge air-conditioned Daimler buses which go to nowhere with just one passenger. We've all seen them."...

This is those German made 'Daimler Buses' that Germany loaned money to Greece to buy, that he actually admits that they 'wasted their money on', when it was perfectly obvious that Greece didn't/would never have the wealth to pay for them in the first place.

As I asked, who are the mugs?

You couldn't make it up.

I hate to get involved in this, but...

"...I am 52 years old, and get a Pension of €1,400 per month, and dont know if i will get the next payment. I would vote NO, i have been retired since the age of 50 and get the money sent from Greece, and can use the council Gyms in London for free, free meals on wheels from Hackney Council, it is a good life...."

I would not be at all surprised if he also got housing benefits and council tax relief.

From here

Who are the mugs?

Personally, I am beginning to think that the whole thing - the EU - is some giant gerrymandering exercise based on creating the universal client state.

"Greece (is the word)"

From stlyrics.com:

We solve our problems and we see the light
We gotta plug and think, we gotta feed it right
There ain't no danger we can go too far
If we start believing now that we can be who we are

Greece is the word
They think our [debts are] just a growing pain
Why don't they understand, It's just a crying shame
Their lips are lying only real is real
We start to find right now we got to be what we feel

Greece is the word
Greece is the word, is the word that you heard
It's got groove it's got meaning
Greece is the time, is the place is the motion
Greece is the way we are feeling

We take the pressure and we throw away
Conventionality belongs to yesterday
There is a chance that we can make it so far
We start believing now that we can be who we are

Only two words needed to be changed.

Free markets or subsidy junkies?

From Business Insider:

European markets rocketed upwards today on some sudden and positive hints of a Greek bailout deal at today's emergency European summit.

The Greek government is trying to negotiate a billions of euros in bailout money, and for the first time in weeks there are genuine signs of positive developments today. Athens stocks led the way — the index recorded a dramatic rise of 9% on Monday...

And so on and so forth.

So basically, share prices depend to a large extent on the continuation of the massive subsidies which somehow trickle their way from ordinary taxpayers and ordinary bank customers, via the Greek government and ultimately back to various large European banks (for whose benefit this whole show is being organised).

So while the stock exchange as such is a free market (anybody can buy or sell), a large part of what is being bought and sold is corporatist welfare.

The circular logic of the banking system.

From City AM:

Q Why would Greek banks need support?

A The banks have lent money to the government. If the state defaults, banks will be unable to fully repay depositors. Money has been flooding out of the banks for months on fears this could happen.

They now have so little cash in reserve, that for every euro withdrawn, they must borrow an extra euro in reserves from the Bank of Greece, if allowed by the European Central Bank (ECB). If this emergency lending is removed, cash withdrawals and cross-border transactions would be limited.

So the government has to lend to bank so that banks can lend to the government? This is Emperor's New Clothes territory.

If the banks were taken out of the loop entirely, what we have is individuals lending directly to the government i.e. the government acting as its own bank, and people making deposits with it.

Sorted.

Ed Balls, Syriza vaguely talk sense: shock

From City AM:

To those who say that Labour is anti-markets, Balls replies: “We have shown a huge understanding of how the markets work. Markets are really powerful in driving incentives but you need to write the rules of the game. Without them you get a lack of investment, collusion and a lack of competition.”

His first sentence is an outright lie, the middle sentence is correct and that last sentence sounds borderline Georgist, if only he realised landowners' role in the economy.

“Markets alone won’t deliver long-term infrastructure, or stability for the energy industry or vocational learning. Markets can not fund a basic science base. But a proper plan must understand the dynamism of a market economy and ensure that government plays its proper role in assisting that.”

Good list! That's what good government is all about, no more, no less.

(Yes, we know that he was quite senior in the last Labour government which got it wrong on both sides: two much intervention where it was not needed; not enough intervention where it was needed; and f- all 'investment' in roads, electricty generation or proper education. And we also know that, John Major aside, each UK government has been worse than its predecessor, so whether Labour or the Tories get in this year, they will be worse than the current Tory-Lib Dem coalition, but hey…)
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From the BBC:

It is not just the poor who voted for Syriza but the middle classes as well. [Home] owners in Athens's leafy, northern suburbs were enticed with the promised abolition of a hated annual levy on [homes].

Known as "Enfia", the tax was introduced in 2011 as an emergency measure but made permanent under the previous government. Instead, there will be a tax on luxury homes and large second [homes].

Fair play, their Enfia was a lot less than our Council Tax but it was more like a Poll Tax. If they make it more proportional to land values, then that must be a good thing. We'll see.

Yanis Varoufakis

Let's see whether he actually learned anything...

... and if he did, whether he puts that knowledge to good use:

PROFILE: Alexis Tsipras

■ Born in Athens 1974.

■ Holds a degree in Civil Engineering from the National Technical University of Athens.

■ Conducted post graduate studies in Land Surveying and Planning.

Let's go Greek!

Fun Online Polls: Bank Holidays and Bail-outs

The results to last week's Fun Online Poll were as follows:

What do you call a week day on which most people don't go to work?

A Bank Holiday - 33%
A General Strike - 8%
Depends on the context - 18%
Comes to much the same thing, really - 34%
Other, please specify - 8%

So that was a pretty close result, but "Comes to much the same thing, really" just scraped through to the finish line. Which is my own view, as it happens. I mean - what would happen if the unions declared a General Strike for a certain day and the government then declared that day to be a Bank Holiday?

Pedant points to Bruce: "As the working population is less than half the population, that's every day of the week that most people don't go to work."
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What is most alarming about the Spanish bank bail out is that nobody is in the slightest bit surprised, they were hotly denying it until the end of last week and they hey presto, come Monday morning it was a done deal and the Spanish PM was hailing it a success for the Euro-zone. So the bankers get away with it yet again and are now presumably limbering up for the next bail out, I guess they'll "do" Italy next, seeing as they/the EU have already got one of their place men in charge.

For the record, following the Irish bail out, in a November 2010 poll our view was that Portugal would be next, followed by Spain. Portugal was duly bailed out five months later but Spain managed to hang on until now.

I (quite wrongly) didn't consider Greece to be a bail out candidate - in November 2011, I asked how long they'd manage to keep Greece in the Euro-zone. Only 18% thought longer than the end of 2011, so a retrospective 'well done' to them.

So who's next?

Cast your vote here or use the widget in the sidebar.

"Euro crisis: UK plans for rise in immigrants"

From the BBC:

The Home Office is drawing up contingency plans to cope with a possible large increase in immigration from Greece if the euro collapses. Home Secretary Theresa May told the Daily Telegraph "work is ongoing"and "trends" were being examined to see whether immigration was rising from countries with stricken economies.

EU nationals are largely entitled to work anywhere in the single market. If the single currency breaks up, people looking for work abroad may see Britain as an attractive alternative as it is a non-eurozone country.

Asked whether emergency immigration controls were being considered, Mrs May explained that the government's main concerns were providing new arrivals with accommodation and National Insurance number cards and ensuring that there was a sufficient supply of leaflets in Greek and Spanish explaining their entitlements under the UK welfare system.

Grexit made easy

According to Euronews, a "Grexit would be ugly and costly" because..."The return of the drachma – which would immediately be massively devalued against the euro – means Greeks would not be able to repay foreign loans."

1. Sure, it might be ugly and costly for Greek's creditors, but a politician's first duty ought to be to his or her own electorate, so here's what I would do if I were in charge: simply start collecting taxes and paying public sector salaries, pensions etc in a new currency, let's call it "Drachma" for sake of argument.

2. There is no need to officially leave the Euro-zone (subject to whatever niceties are buried in some treaty or other) and the rest of the Greek economy can continue to denominate transactions in € if it so wishes.

3. So instead of paying out €100 billion a year in pensions etc and collecting €90 billion in tax (running a €10 billion annual deficit), they just start paying out GRD 100 billion (pensions etc being converted 1 for 1) and demand GDR 100 billion in tax. Conceptually, this works best with Land Value Tax (or a Poll Tax) but it works with income tax or VAT as well.

4. There doesn't need to be any indicative exchange rate between GDR and the Euro. At present, VAT is €23 for every €123 of gross turnover, and this raises (say) €18 billion. So they need to collect nominal GDR 20 billion in VAT, so the rate is just set at GDR 26 per €123 gross turnover.

5. That would ignore the fact that spending by pensioners etc is 40% of GDP, to keep the arithmetic simple, sales made in GDR could be exempt from tax for the time being. So the rate then has to be bumped up to GDR 26 per €78 turnover (i.e. 60% of the original €123).

6. So there will be businesses who need GDR to pay their tax bills; and there will be pensioners who have GDR which they have to exchange for stuff. There's supply and demand on both sides, and things will soon settle down.

7. Before the Grexit, a shopkeeper with €123's worth of goods on the shelf had to keep back €23 of the sales proceeds to pay the VAT; he now knows that he has to try and get total sales proceeds in the ratio of €78 to GDR 26.

8. So €78 + GDR 26 is OK - this implies an exchange rate of GDR1 = €1.73. €117 + GDR 39 is also OK - this implies an exchange rate of GDR1 = €0.15. It's up to each shopkeeper to try and work out the optimal GDR prices, i.e. an item which currently costs €10 might be priced at GDR6 or it might be GDR60, I can't imagine it will take them more than a few days to work this out by trial and error.

9. Hey presto, deficit eliminated, Euro problems solved, revolution/military coup/civil war averted.

Insurer's trade association: Your house has not burned down

From Sky News:

That smouldering wreck standing in your garden was not the result of a fire, an official trading body has ruled.

The Insurers Scams and Dissemblement Association said that towering flames and billowing smoke which neighbours report having seen emanating from the building, did not equate to a 'conflagration event' - essentially a fire. It means payments of fire insurance - an insurance mechanism to protect you in case your house burns down - totalling about £100,000 has not been triggered.

ISDA, which oversees complex forms of insurance, was asked by you to determine whether your house had burned down earlier in the week. A second question relating to the ruined contents was asked on Thursday morning, stepping up the pressure on ISDA's Determinations committee which made the ruling.

In response to both your questions, the 15 members voted unanimously that a "conflagration event" had not happened.Your house not on fire earlier in the week, source.

The news will delight other insurance companies who are desperate to avoid any mention of a fire. But ISDA noted that your garage was still smouldering and further questions relating to the presence of two fire engines in the middle of the road could be submitted. The body said that "a conflagration event could occur at a later date as further glowing embers come to light."

ISDA's review of your house followed the fire brigade's decision to hose several thousand gallons of water at it - based on their initial assessment that your house was indeed 'burning'. It was, the fire brigade said, a reaction to the sparks landing in your neighbour's garden and the pall of smoke spreading over the neighbourhood. ISDA's spokesman however suggested that most of the damage was actually caused by the fire brigade's over-application of water to the problem.

Your bank also moved to temporarily suspend the eligibility of your house as collateral for bank loans. It will start accepting it again once you have borrowed the money elsewhere to pay for it to be rebuilt, when measures to insure yourself against losses come into effect.

It's as if his debts are following you round the room...