Greek Voters Gave Political Parties a Five-Finger Salute

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Greek Voters Gave Political Parties a Five-Finger Salute

Christopher Tripoulas

Special to The National Herald

Despite an overwhelming majority of Greeks citizens turning out to vote against pro-memorandum policies that have plunged the Greek state into poverty not experienced since WWII and the Civil War, the country will be heading back for new elections following the political parties’ inability to reach a consensus on how to implement the popular mandat

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May 24, 2012

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36 readers comments


1. Philip Vorgias wrote on May 25, 2012 12:46 PM	When Tsipras empoverishes the nation while teaching the 'robber barons' a lesson, you can write one of your sophmoric articles about how it's all good, Chris. If you're going to share your thoughts-such as they are-on the Greek economic problems you might at least take one course in Econ 101, Modern International Banking or Currency Theory. The thoughts you post, taken out of Karl Marx's diary or extracted from one of your beneath the belt orifices, don't pass muster. Even Armodios could do much better.

2. Nicholas Kostopoulos wrote on May 25, 2012 5:00 PM	While I am not fond of the Golden Dawn Party, I like what they have said about illegal immigration and crime. They have not flip flopped on the issues, but have scared the illegal immigrants and the criminals with their no nonsense forms of criminal control. Hooray for them! Greece needs such a political party in the mainstream parties in dealing with the current economic disaster , not a bunch of yes men, and crooks like ND and PASOk are. As for illegal immigration, ND and PASOK, has said like Obama here in the US I will set up centers to get them out of here. What a lame stance on illegal immigration that is. While immigration and crime are one of two problems facing the Greeks, you must start somewhere first. At least Tsipras realizes that the ECC and Germany have made it impossible for Greece to get out of this mess, and he has said renegotiate or go the hell ECC and Germany. People may not like his party's stance or type of party he belongs to, but he has laid a line in the sand. and stuck by it.

3. Philip Vorgias wrote on May 26, 2012 12:45 AM	Someone once said if you tell a great lie and you tell it long enough people will believe it. Tsipras is telling Greeks they can flip-off the hated Germans, repudiate the terms of the agreement and the Eurozone still won't get rid of them because it would cause too much turmoil to eject Greece. He's full of it, but Greeks like his unilateral attitude-they've bought the Great Lie. Utterly appalling.

4. ARMODIOS PAPAGIANAKIS wrote on May 27, 2012 9:38 PM	LOL Philip, once again you flatter me. Of course I can do better. Tsipras wants to punish Greece’s exploitive “robber baron” creditors, who are the chief recipients, and beneficiaries, of the Troika’s bailouts, by nationalizing them; essentially stealing their assets and replacing the already incompetent bankers with equally incompetent Syriza bureaucrats…communism “lite” ,and yes, permanent impoverishment. Philip Vorgias, the Troika, and sadly, many readers of this newspaper, instead want to REWARD and subsidize Greece’s incompetent and exploitive creditors by continuing the bailouts and essentially stealing from German/Eurozone taxpayers to do it…socialism “lite” and permanent borderline sustenance. Armodios want the markets to punish Greece’s incompetent and exploitive creditors by letting them fail, and re-pricing their assets lower in order to reward and incentivize, competent and vigilant banks, to risk proprietary capital to purchase the failed creditors’ assets in order to expand and further grow their business for profit…. short term pain, long term gain – capitalism!

5. Philip Vorgias wrote on May 27, 2012 10:41 PM	I knew that comment would elicit a reaction from you, Armodios. Of course, I was only saying it in jest. You've forgotten more about economics than Chris Tripoulas ever new. You have good instincts and-with a little fine tuning-I'm sure we'll swing you over to elightenment. As for your latest comments-we've bandied that discussion around before. I'm not willing to see Greeks lose 50% of their net wealth in order to stick it to the-no question-incompetent bankers. My capitalism is not purist, not to that extent. A bankruptcy 'soft landing' is about as much as Greece can stand right now-all that's politically possible. Hopefully they'll use this time to introduce all the needed reforms to open up the Greek economy. But you never know with Greek politicians-they're incompetent as well. Cordially, as always.

6. ARMODIOS PAPAGIANAKIS wrote on May 28, 2012 2:00 AM	It’s not a question of economics but one of ethics. Of course your “capitalism is not purist” – because it’s socialism - by transferring and spreading (socializing) the inherent risk of lending to Greece, from the few creditors, to the many German/Eurozone taxpayers. You’re not willing to stick it to incompetent and/or greedy creditors but (unbeknownst to you - I HOPE) you’re willing to “stick it” to hard working German/Eurozone taxpayers. You’re not willing to see Greeks “lose 50% of their net worth” but nor are you, and similarly “enlightened” others, willing to see the negative impact of the bail-outs on the German’s net worth. Why?

7. Basil Zafiriou wrote on May 28, 2012 10:16 AM	Hello Armodios! You’re months behind news on the euro crisis. Those “incompetent and/or greedy creditors” have already accepted a 70%+ writedown on their Greek debt --they've been punished; that story has long been over. As for the German taxpayers, they’ve benefited so far from the loans to Greece (borrowing at zero, lending at 3.5%), and continue to benefit from the crisis: a low euro is boosting German exports, funds flood into Germany in search of safety, and German interest rates have been driven down to record low levels. These benefits largely explain Germany’s reluctance to relax the draconian austerity it has imposed on the euro area that has driven the periphery countries to depression. In a depression, even the most efficient firms –not just the incompetent- can go under. If this issue is about ethics, you still have your bearings wrong.

8. Philip Vorgias wrote on May 28, 2012 10:23 AM	Basil answered perfectly, I have nothing to add to his arguments.

9. ARMODIOS PAPAGIANAKIS wrote on May 28, 2012 11:29 AM	LOL gentlemen! I have to run to my barbeque/backyard. I’ll be back…promise! In the meantime keep reading Basil’s post and see which point is most glaringly wrong.

10. ARMODIOS PAPAGIANAKIS wrote on May 29, 2012 1:55 AM	Hello Basil – In the interest of brevity, I won’t bother with the last half of your post since you’re simply stating the obvious. I’ll only address the absurd portion of your post and end with the colossally absurd. The (70%) recently written-off loans were subsidized by the initial 110 billion euro bailout package which was largely financed by the German/Eurozone taxpayers ( I hope you and Philip see my “socialism” here), who were, and still are, largely against the bailouts. The creditors’ 70% loss would have potentially been much worse, much sooner, if not for the bailouts. So, in essence, the existing creditors were rewarded, since “accepting” a 70% loss is infinitely better than insolvency. Conversely, (or perversely) it is the G/EZ taxpayer who is punished since he just lost 70% of his bailout monies on a loan he didn’t want to make in the first place (I hope you and Philip see my “unethical theft” part here). But wait, the story is not “over” as you suggest, it continues. Two years after the first bailout, the G/EZ taxpayer is again forced to throw his hard earned wealth into the Greek abyss, as part of second, and now, 130 billion euro bailout. And here is where the German taxpayer really gets to “benefit” from the Greek crisis. As soon as the post, 2nd bail-out, newly swapped bonds start trading, they plummet 75% within days as they “price in” the inevitable Greek default. So now the G/EZ taxpayer has lost 70% of his first loan to Greece, is down 75% on his second, but can take comfort from the 3.5% he’s receiving from Greece, while the markets demand 25%! Keep plugging.

11. Philip Vorgias wrote on May 29, 2012 9:56 AM	The German taxpayer would have been hit far worse if Greece defaulted on it's debt payments. Better a controlled implosiong than catastrophe. You aspire for clean, unadulterated capitalism in a crisis which was brought on by non-capitalist measures. You're a purist, you propose measures which are politically impossible.

12. Basil Zafiriou wrote on May 29, 2012 11:15 AM	You make a good point about the potential impact of an uncontrolled default, Philip. But Armodios is wrong on the facts of the case too. The Greek debt restructuring that occurred in March of this year related to bondholdings by PRIVATE creditors -nothing to do with the initial Troika support package of two years ago when debt rescheduling was not even on the table. Recognizing that owing to changed circumstances they would not be able to collect on the original terms of their loans, these private creditors –banks, insurers, hedge funds, others- agreed to take a loss in a negotiated deal with the Greek state. Similar deals take place in business insolvencies in the private sector every day, and are perfectly consistent with free market principles. A unilateral Greek default is the Tsipras option -funny how economics also can make strange bedfellows.

13. ARMODIOS PAPAGIANAKIS wrote on May 29, 2012 12:41 PM	LOL Philip….I can’t believe what I just read!!! Re-read you first sentence and then ponder this; wouldn’t the German taxpayer have been hit far LESS, had he never lent to Greece in the first place??

14. Philip Vorgias wrote on May 29, 2012 12:46 PM	I recognize that things are tough in Greece right now, but if you look at the facts of the matter Greece was presented with quite a deal. Repudiation of a major part of it's debt is nothing to discount. What Greece has been given is time to reform it's economy. If they don't make use of it, on their heads be it. But the Tsipras proposal-to refuse to live up to the new Greek obligations and turn back to the old way of doing business in Greece is a prescription for disaster. There is no future for Greece if they don't reform work rules, labor laws, tax policy and the like. There is only one realistic choice on June 17, every other option is a path to disaster.

15. ARMODIOS PAPAGIANAKIS wrote on May 29, 2012 12:46 PM	Basil – I guess you prefer avoid the discussion of the ethical ramifications of the Greek crisis to the German taxpayer, and want to switch gears…again. The “facts” are/is that the initial bailout was largely funded with German/Eurozone taxpayer monies that were funneled to the Greek Treasury, which in turn made payments to pensioners, government employees and many of the aforementioned PRIVATE creditors who ultimately wrote off the “70%” losses and subsequently swapped to the new bonds. So in essence many of Greece’s creditors’ losses were indirectly subsidized by G/EZ taxpayer - who also lost. Your description of the legal mechanics of the bond swap is basically accurate but irrelevant. Now, please tell us again how lending to Greece at 3.5% benefits the German taxpayer when present yields on Greek 10 year debt is about 25%???

16. Philip Vorgias wrote on May 29, 2012 12:50 PM	Are you suggesting Chancellor Merkel is providing debt relief to Greece-and dealing with voter anger in Germany-because she likes Greece so much, Armodios? Think about that for a minute before you respond. She has many reasons NOT to lend Greece money, if she's doing it than it must be because she recognizes-as some of us do-that uncontrolled Greek default would be a catastrophe for the Eurozone. It is what it is, Armodios. As much as you'd like to to be more black and white, it isn't.

17. ARMODIOS PAPAGIANAKIS wrote on May 30, 2012 2:24 AM	Congratulations Philip! You’ve just hit rock bottom! It seems as if you’re prepared to hinge your hope for a solution to the Greek/Eurozone crisis based on the supposed integrity of a German POLITICIAN. I don’t know what motivates Merkel to squander German taxpayer monies down the Greek sinkhole, or what she “recognizes”, and neither do you. Much like we don’t know what motivated FDR and his New Deal proponents to continually implement economic policies that prolonged the depression. The New Deal’s shortcomings are obvious to us now, but they weren’t as obvious to MOST others at that time. Sound familiar?

18. Basil Zafiriou wrote on May 30, 2012 9:07 AM	Whoa Armodios! Whatever you may think of Chancellor Merkel, we should be able to agree that she is more qualified to speak for German taxpayers than you? Incidentally, your new version of how German taxpayers indirectly subsidized the Greek debt restructuring earlier this year is also wrong: Any debt repaid with bailout funds would have been retired and therefore not be part of the debt restructured.

19. Philip Vorgias wrote on May 30, 2012 9:08 AM	That's supposed to pass as argument, Armodios? Merkel's party is in big trouble with German voters, who don't want to send any more money to Greece. That she is doing it anyway shows-to discerning folks anyway-that she is aware the effect of an uncontrolled Greek bankruptcy would be far more damaging to the Eurozone as a whole. Unassailable Truths are pretty hard to come by in Economic Policy, you have to make policy based on the best estimations of the experts. EU POLITICIANS don't have the luxury you have of watching the Eurozone go down the tubes while they stand off to the side and admonish, 'Well, chalk another one up for Adam Smith.'. They have to act on the basis of best estimations. The worst thing that can happen to you is you'll continue to get brow-beaten by Basil and I in these forums. Merkel would have to deal with a seething electorate for dereliction of her duties.

20. ARMODIOS PAPAGIANAKIS wrote on May 30, 2012 12:13 PM	LOL gentlemen!!! I never said I was qualified to speak for Merkel or any other politician. My point is that politicians have a long history of enacting political and economic policies which posterity later shows sometimes hurts its citizens instead of helping - despite even the best of intentions. Assuming that Merkel, or any other politician, “must recognize” (Philip’s words) what the end result of his/her actions will be is conjecture, and of course, historically inaccurate. Politicians/bureaucrats are also human beings, and are expected to make decisions based on ethics first (right/wrong) and then best “estimations” just like the rest of humanity. Now, if either of you can’t explain how it benefits the German taxpayer, to lend to Greece at 3.5%, when the market demands approx. 25%; you should ask Merkel.

21. Philip Vorgias wrote on May 30, 2012 12:30 PM	When all is said and done Armodios, you'll probably get what you want-a bankrupt Greek government and ejection from the Eurozone. If Tsipras gets elected the next Greek PM that will be the outcome. I'm asking you to promise to the forum that you won't 'disappear' when that happens, I'm going to enjoy seeing you try and tapdance your way through the disaster that will be Greece-post EURO. You can entertain us with explanations of how it'll all work out in the end, as Greece burns in riots and the fringe parties beat each other up on the streets. You better start lacing up your tapdance shoes! lol

22. ARMODIOS PAPAGIANAKIS wrote on May 30, 2012 12:51 PM	I promise, I promise, although I may be wearing “tsarouchia” instead. LOL!

23. ARMODIOS PAPAGIANAKIS wrote on May 30, 2012 1:04 PM	PS - Please re-read above post #4 as a reminder.

24. Philip Vorgias wrote on May 30, 2012 1:50 PM	As long as you're not wearing running shoes, I know that's what Tsipras will be wearing. But he won't be able to run fast enough to escape from his just deserts, on that let there be no doubt!

25. Basil Zafiriou wrote on May 30, 2012 2:49 PM	Armodios, when you borrow at zero and lend at 3.5, you’re making money. At a higher spread, you would be making even more money and, if you fund an activity at a lower spread than you are able to get elsewhere, you’re subsidizing that activity. So yes, the bailout loans to Greece do constitute a subsidy. Who said otherwise? Now why would the Germans (and other Europeans plus the IMF) be subsidizing Greece at this point? One good enough reason, as Philip has noted and just about everyone now recognizes, is that a Grexit would cost much more than the subsidy. Another is because of the value you attach to your membership in an organization, which you do not determine by looking at a single transaction only but over the full range of the relationship. Study after study shows Germany being the major beneficiary of the eurozone and, as I pointed out in my first post above, Germany has even been benefiting from the current crisis thus far. BTW,I normally charge for economic lessons -consider this a subsidy.

26. Philip Vorgias wrote on May 31, 2012 9:12 AM	Basil, you should have added, "Here endeth the lesson, Armdios.". LOL

27. ARMODIOS PAPAGIANAKIS wrote on May 31, 2012 11:09 AM	Oh I see, the German government first disregards its people’s wishes and then deliberately destroys its peoples’ hard earned wealth by losing 75% of principle, rendering the 3.5% spread moot, in order to “benefit” the German economy. Unfortunately any gains to the German economy are off-set by the LOSSES incurred by the German taxpayers. You cannot create wealth by first destroying it. “Study after study” shows: minus 1 plus 1 equals zero. Furthermore, if the subsidies to Greece are so beneficial to Germany, then why don’t they rename the Greek “bailout/subsidies” to “German Stimuli” and avoid the political heat? Surely the German taxpayer has read that a “Grexit” would cost much more than the subsidy”. If the benefits are so obvious then why can’t the German taxpayer see the “value” of maintaining his membership in a politically vaunted “organization”? I suggest you go back and re-read Bastiat then consider refunding your students' monies.

28. Philip Vorgias wrote on May 31, 2012 12:18 PM	I think your bionic eye may need a new battery Armodios, it seems to be cutting in and out and seeing only part of our arguments-selectively, of course. Nobody ever said the bailout was good news, we argued that given the choice between that and an uncontrolled Greek bankruptcy it was preferrable. Arguing with absolutists is like arguing religion-it's a pointless exercise because their viewpoint is an article of Faith. It allows no consideration of weighing least-bad options. Nevertheless, I proceed forward on the basis one day the scales will be removed from your eyes-bionic or no.

29. ARMODIOS PAPAGIANAKIS wrote on June 02, 2012 1:45 PM	LOL Philip, Those aren’t scales falling from my eyes but tears…from laughter. However, if you take your untarnished vision and read posts 7 and 8, you will clearly read what Basil wrote: “As for the German taxpayers, they’ve benefited so far from the loans to Greece (borrowing at zero, lending at 3.5%), and continue to benefit from the crisis; and you agreed. I would imagine that implies that the bail-outs are good news, at least for Germans. Now that Basil finally and reluctantly agrees to my point the German taxpayer is in fact taking loss on their 3.5% loans to Greece by euphemistically calling it a subsidy, and I correctly point out any “continued” “benefits” or gains in the German economic future are off-set by the continued losses in the German economic present, you then subsequently praise him instead of me and call me an “absolutist”…boo-hoo…LOL. Seriously, and as I wrote earlier, even with best of intentions, history has repeatedly shown that “studies” are often biased and sometimes doctored, politicians and bureaucrats (See IMF) are often inept and sometimes unscrupulous, and even minority opinions are sometimes proven right. Saying otherwise would make you the “absolutist.”

30. Philip Vorgias wrote on June 02, 2012 1:53 PM	At any rate, we'll likely see if you're correct in your beliefs-if SYRIZA is elected. You may not care for their 'nationalize the banks' jargon, but their repudiating the loan agreement will result in your preferred option-a bankrupt Greece. We'll see if that's the quick-fix you've been maintaining it would be. Like I've said, don't disappear when things come down!

31. Basil Zafiriou wrote on June 02, 2012 7:18 PM	Armodios, if we’re going to make any progress in debate, we have to keep an open mind and stay honest. What purpose does it serve for you to claim that I’ve “finally and reluctantly agreed to your point” that the bailout loans to Greece constitute a subsidy? Here’s what I wrote in an exchange with you on this a year ago: “the Troika support package is in fact a massive subsidy by European and world taxpayers (through the IMF) to help Greece recover without first completely flattening itself. Greek bond rates are currently north of 20%, while the IMF/EU funds lent to Greece carry an average rate of less than 5%. The difference between the two is a measure of the subsidy.” (http://www.thenationalherald. com/article/51167) So my view that the bailout constitutes a subsidy is not new. Where we differ is that I don’t see the bailout as zero-sum, where a benefit for Greece must be at the expense of the rest of the EU. To illustrate, during the 1907 panic on Wall Street, J. P. Morgan lent out millions to several trust companies and a leading brokerage house at subsidized rates (these firms in fact no longer had access to market funding), even though they were his competitors. Why do you suppose old Pierpont would do that? Obviously because as the major financial firm on Wall Street, Morgan had the most to gain from containing the panic. You refuse to recognize the potentially disastrous consequences of an uncontrolled Greek default and dismiss evidence showing that Germany is the major beneficiary of the eurozone, preferring to rely on solipsism instead (“I correctly point out...”). Hard to advance debate that way.

32. Philip Vorgias wrote on June 03, 2012 3:49 AM	If SYRIZA is elected on June 17 Armodios is going to have to defend the net result of an unconrolled bankruptcy, Basil. He's beginning to move around unconfortably in his seat while considering that fact. While he may not advocate the socialis agenda of Tsipras and his minions, the policy of repudiating the bailout terms and lettting the chips fall where they may is EXACTLY what he has indicated should happen. Going to be interesting to see ole Armodios perform a little softshoe in these forums and try and put lipstick on that pig! lol

33. ARMODIOS PAPAGIANAKIS wrote on June 03, 2012 8:39 PM	Basil – No need to go back a year; After expressing my concern for the German taxpayer’s net worth from the negative impact the from the bailouts in Post 6, you write in Post 7 directly above; “As for the German taxpayers, they’ve BENEFITED (emphasis mine) so far from the loans to Greece (borrowing at zero, lending at 3.5%), and continue to benefit from the crisis”; Later during your unsolicited economic “lesson” in Post 25 you reiterate the same; “when YOU (emphasis mine; meaning Armodios or the German Taxpayer, I presume) borrow at zero and lend at 3.5%, you’re making money”. However, you conveniently forgot to mention that capturing the yield spread is profitable only as long as the price of the underlying asset purchased, remains relatively stable because the initial monies borrowed at 0% to purchase said asset still need to be RE-PAID. Furthermore, when the price of the asset or one’s principle drops more than 3.5%, it NEGATES the gains from capturing the 3.5% yield spread, ergo, at that point, one is no longer “making money”, one, is in fact LOSING money. In addition, you also forgot mention when the price of the bond drops below certain equity requirements, the event triggers a MARGIN CALL forcing one put up more cash in order to maintain sufficient equity which now puts one further into a NEGATIVE YIELD or if not, one gets SOLD OUT, at a significant LOSS of principle. So, how does the German taxpayer “benefit” and/or “make money” (your words) by holding a Greek bond paying 3.5% with his principle down approx. 75% and his loan to Greece is now carrying a negative yield???

34. Basil Zafiriou wrote on June 04, 2012 12:25 AM	I think we've flogged this to death Armodios, but I'll try one last time. Under current accounting rules, assets not traded, such as the IMF/EU loans to Greece, are normally carried on a firm’s balance sheet at book value; a positive spread would therefore show up as profit in the firm’s income statement. From an economic perspective, one would want to reduce the returns by any expectation of capital loss. But the whole point of the bailout package for Greece is to stabilize the country so that it does not default. Indeed, the IMF is precluded from lending to any country if it does not expect to be repaid in full; and loans are preceded by intensive analyses to assess a prospective borrower’s ability to repay. So far only three countries have defaulted on IMF loans: Somalia, Sudan and Zimbabwe. Greece may be a fourth, in which case lenders may get less than they expect, but so long as the loans remain current and collection in full is expected, you don't discounted them. Up to this point, therefore, German taxpayers have indeed been making money on their Greek loans, even on a narrow business sense. As I have stressed in previous posts, however, the benefit of the bailout loans to the lenders is not measured by the interest rate alone but also, and most important, by the contribution these loans make to the stability of the financial system and the strength of the eurozone. Even if Greece defaults in the end, the time that the bailout assistance bought to date has afforded euro countries opportunity to bolster their defences and reduce potential losses from the shock of a Greek default. Decision-makers in these countries obviously have concluded that the Greek bailout is a good investment for their citizens.

35. ARMODIOS PAPAGIANAKIS wrote on June 05, 2012 11:58 AM	LOL Basil!! Only in your and Lagarde’s world, it is in the best interest of the German taxpayer to AGAIN lend to Greece by throwing good money after bad, and getting a 3.5% yield on make-believe, albeit legal, balance sheets, instead of buying comparable Greek debt at a discount in the capital markets at 25% yield. Only an IMF bureaucrat’s “intensive analysis”, could not see the CDS market pricing in the probability of a Greek default. Only an IMF analyst/ EU bureaucrat can conclude that Greece is a creditworthy borrower at 160% debt-to-GDP ratio. Maybe the German taxpayer has concluded that it’s his in the best interest to avoid the risk and NOT lend to Greece and instead invest in directly in Germany? All because the “decision makers have concluded that the Greek bailout is a good investment for their citizens” in spite of their protestations, doesn't automatically make it a good investment. (See your own African examples above). In fact, it reaps of fascism. Furthermore, you cannot strengthen the Eurozone by strengthening one member at the expense of (by weakening) another, you can’t multiply wealth by first dividing it…the net gain is zero, and that reaps of socialism.

36. Basil Zafiriou wrote on June 05, 2012 1:30 PM	Armodios, you’re mixing apples and oranges. IOs and countries have more leverage than private lenders to exact payments on loans. Also, official loans take precedence over private loans. The latter would have to go to zero before the former are affected. –No more lessons.
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