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.
Sunday, 5 July 2015
Oooooo, the irony..
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12 comments:
Hehe, well spotted.
"As I asked, who are the mugs?"
Certainly not German exporters. Hehe.
R. Except that Greece is now going to default on all the EU and ECB debt it has racked up that is,effectively underwritten by the.... Germans
L, don't think its likely. The Greeks will fold. We will have to see what happens.
But regardless of this the German government has been supporting exporters. Germany really needs to exit the euro, reducing inflation and boosting the value of their savings.
R. I think that some form of default/repudiation has a high probability. Agreed about Germany exiting the Euro, which they have both benefited and suffered from. They are the de facto underwriters of the whole Euro
Different Germans have benefitted than those that have not. The vast majority are worse off with mercantile policies.
Valid points by Lola, though to be accurate, I think the French loaned more to Greece than Germans. See:
http://blogs.cfr.org/geographics/2015/07/02/greecefallout/
Germany is not the underwriter of the Euro currency in a functional sense. Its the people on the other side of the transaction , the borrowers that have a more active role in the proccess of the currency. Selling a lot of things a holding a lot of the currency is a more passive role.
D, yes agreed it is always the borrower or spender or issuer who creates the currency.
D / MW I meant underwriter in the sense that other people have confidence in the Euro because they know that it's value is supported by the productivity of the German taxpayer. They think its still run under Bundesbank rules. (More fule them)
L, correct. The euro is undervalued for Germany and Holland and overvalued for the Southern European countries.
There is no accurate theory to describe currency values, it is just too complicated.
But we know what basically gives currency value.
Even in countries like Greece when tax is not enforced properly the euro effectively has value as a foreign currency.
And the remark about Bundesbank is spot on, if anything policy is even more deflationary.
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