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Germany to Greece – we’re in charge, so shut up

A short item, which takes the breath way, on how the problems of countries like Greece has encouraged the German government to insist that unless these countries are as economically “fit” as Germany is or claims to be, they cannot participate in EU decisions.

Well, I guess such a comment makes it explicit that as far as Germany is concerned, the strong states rule, and the weaker ones should shut up and do as they are told. Sometimes, it really amazes me why anyone ever doubts that this is the consequence of the single currency project. The Greeks, and other such countries, have just had a lot of illusions broken up into atoms.

Update: well, I guess I should thank Glenn Reynolds for the “instalanche” of comments, some of which, I assume, are from the US. Let me consider a few of the points made. First of all, I am not – which seems to be the view of some – defending the Greek state, and by implication, some of their voters. To the Germans, or indeed other euro zone countries, it must indeed be an outrage that a country expects to be able to continue enjoying the luxuries of early retirement, generous welfare and short-work week. If the Germans are irritated about this, they are entitled to be. But you see, this is what happens in a currency union where one bit of it is subsidising another bit. In the US, where the poorer parts get subsidies from the richer or at least not bankrupt bits, the poorer bits are not then told, by their neighbours, to shut up. I am not aware, for example, of a rich state of the US demanding that poorer parts be banned from sending Congressmen or Senators to DC (if you have examples, please let me know). The Germans knew, when they choose to sacrifice a perfectly solid currency – the Deutschemark – in exchange for the euro, that there were risks. Some German politicians may have naively assumed that the less prosperous bits would raise their game, but given the cussedness of human nature, that was not a sure-fire bet. As Michael Jennings points out in the comment thread, Germany itself had the experience of reunification and the problems of integrating the post-communist East into the capitalist West. But at least it had a common sort of political identity. But it is a much more difficult thing for a German politician to demand that a member of a currency union should not be allowed to participate in discussions relating to that currency.

I don’t feel a lot of sympathy for the Greek government, but I don’t feel much sympathy for the Germans, either. They wanted this currency union, and arguably, imposed an unsustainable interest rate straitjacket onto the continent. Much of their political and media elite has invested a huge amount of emotional and political capital into this. They made their bed, now they must lie on it.

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64 comments to Germany to Greece – we’re in charge, so shut up

  • Oh, I do believe it’s time to review chapter two of Rand’s CUI: “The Roots of War”.

    Yes, I do.

  • John K

    Achtung Schweinhunden, ve are ze masters now.

  • Jim V

    Deutschland, Deutschland über alles,
    Über alles in der EU

    Or should it be

    Angela, Angela über alles,
    Über alles in der EU

  • Rusty

    I don’t know, I can’t say I blame the Germans for the position they take. It would be one thing if The Stronger was bullying around The Weaker. But in this case, because of how the EMU is structured, Germany is essentially paying for Greece’s profiligacy. If I was paying for someone else’s bar tab, I’d probably take the same position.

    I’m not saying the situation is ideal, or I like the fact that this will most likely result in a more centralized EU, through which Germany (and France, to a lesser extent) holds more power. But I can’t say I’m surprised.

  • Jim V

    Granted the Germans are paying the tab. But when the political backlash from the draconian fiscal reforms start it will be the Germans who will be the bad guys and not their profligate political class. Let the guys who created this mess pay in political capital for the bailout and not the ones who are helping them.

  • Königstreu Sachsen

    If the German Atlas finally shrugs, refuses to submit to historical-emotional blackmail and ceases to provide open-ended funding the Franco-Belgian imperial project, we may yet see the end of the EU.

  • Off topic but important. You can download the official opt out from the NHS database form here:

    http://www.connectingforhealth.nhs.uk/systemsandservices/scr/documents/optout.pdf

  • Otto Flick

    Those who pay decide how we play.

  • george

    Well, yea.

    A strong country like Germany lords it over the Greeks. What a surprise. Has it ever been different?

    The only reason you might be so foolish to think that a German and a Greek have the same weight is because you’ve bought in to an ideology that pretends that the creditor and the debtor is one and the same. Very silly.

  • Jeffersonian

    I’m not sure it’s so much the strong against the weak so much as it’s the marginally responsible against the screamingly irresponsible. Germany isn’t dictating to the Danes, after all.

    Pretty soon, Hu Jintao will be saying similar things to Obama, and for the same reason.

  • Germany, playing the part of the stern bad guys?

    Who could have seen that coming?

  • Peter

    If we keep going down a socialist road like Greece it will just be a matter of time before China is telling us to shut up! The borrower is always a slave to the lender.

  • The easy way to prevent this would be to not spend so much more than you take in that you have to crawl around begging for handouts.

    Kind of like real life.

  • george

    The more I read on this site the less impressed I am. What point are you trying to make? Are you suprised that there is a limit to Germany’s bailout? Bad Bad Germany for not being there for the profligate Greeks! It’s like you are prepping Europe for a breakdown but you are otherworldly about how a breakdown happens.

    Do you know anything about European politics? Why are the German’s in charge? If Greece is weak, why are you criticising the Germans for being strong? The Germans are strong because they are not silly about money, like the greeks are.

    In the end, it comes down to a moral compass. Smart. Not stupid. Careful. Not Greek.

    Success has a thousand fathers, and failure is pretty much Greek.

  • jon livesey

    I find it hard to believe that the Euro members who happen not to be Germany didn’t know this was coming from the beginning. They can’t claim that Eurosceptics forgot to warn them that it would lead to German hegemony and that the Euro would be the mechanism; we did, over and over. If they ignored the warning, they wanted to ignore it.

  • george

    The more I read on this site the less impressed I am. What point are you trying to make? Are you suprised that there is a limit to Germany’s bailout? Bad Bad Germany for not being there for the profligate Greeks! It’s like you are prepping Europe for a breakdown but you are otherworldly about how a breakdown happens.

    Do you know anything about European politics? Why are the German’s in charge? If Greece is weak, why are you criticising the Germans for being strong? The Germans are strong because they are not silly about money, like the greeks are.

    In the end, it comes down to a moral compass. Smart. Not stupid. Careful. Not Greek.

    Success has a thousand fathers, and failure is pretty much Greek.

  • Eric

    If we keep going down a socialist road like Greece it will just be a matter of time before China is telling us to shut up! The borrower is always a slave to the lender.

    Not when the lender is foolish enough to lend in the borrower’s currency. Yes, Mr. Hu, we’ll pay you right back as soon as we receive our order for ink and paper.

  • Mark Well

    Let’s see. The Germans are raising their retirement age to 68. The Greeks are rioting at the thought of having to raise their retirement age from 61 to 63. Greek civil servants get 14 months pay every year. And half of the comments here act like the Germans are throwing their weight around. Seems to me Germanophobia is still bubbling. Greece is as solvent as California, which means it’s belly up. Greece wants a handout, the way all beggars do. They ran out of their own money, and now they want everybody elses’s. Lots of luck with that.

  • Roue le Jour

    “No pay, no say”, is an excellent principle. I look forward to the EU proposing the disenfranchisement of non private sector tax payers.

    Should I hold my breath, do you think?

  • Georgie

    @Mark Well: Oh, really now? I can’t stand listening again and again about “14 salaries”.

    You can’t compare 14 salaries of average 1000€ with a German salary figuring like 2500€.

    Maybe if we haven’t paid around 2bil € for faulty Leopards and around 5billion € for some German submarines that can’t float straight, we would be in a better financial position…

  • Robert Speirs

    Whatever happened to “Einheit fuhrt zur Freiheit!”? I guess the Greeks only saw the “freedom” part and forgot about the “let’s all pull together”.

  • PTL

    Man walks into a bar, says “drinks for everybody.”
    Everyone drinks. Man says “now everybody pays.”

    The Greeks don’t want to pay. Socialists are like that.

  • Mark Well

    Georgie, maybe Germans get paid more than Greeks because they work harder and produce more value. Got nothing to say about the rioting about the retirement age, eh? Or the begging, eh? Or the running out of money, eh? The Leopards seem to work for the Germans. Haven’t heard of too many subs going glug glug, either. Fourteen months pay for ten months work. Hmmmmm. It’s a wonder you can find a Greek to open a deli in New York.

  • lukas

    Given that the Greek government lied and cheated to get into the currency union in the first place, I doubt that they had many illusions to begin with. It’s the welfare mentality: keep the handouts flowing, and if big daddy asks you to do something in return, pretend like you give a damn and go on like before. Big daddy will never let you down.

  • Walter Sobchak

    I think you guys a riveted on the Germans. The fact is that the Greeks have been having a party on the German’s pfennig. The Greeks are now smashing plates and demanding to be bailed out. If the Germans set stiff conditions on a bailout, that is too bad. They probably shouldn’t have invited the Greeks to the party in the first place.

  • Arty

    Greece has already broke the EU constitution agreement by exceeding the allowed debt-to-GDP ratio. If there was any justice they’d be expelled from the union until they paid their debts and showed they could live within their means. That way those nasty Germans couldn’t stick their noses in Greek business.

  • I like Germany, this is why. If you want to be a bunch of lazy good for nothing slobs, that is your business. If you want to be a bunch of lazy good for nothing slobs living off our energetic, hard working and thus industrious citizens, get lost.

  • Vinegar Joe

    If you want to be a bunch of lazy good for nothing slobs, that is your business. If you want to be a bunch of lazy good for nothing slobs living off our energetic, hard working and thus industrious citizens, get lost.

    Maybe someone will finally wake up and send the Wehrmacht in to sort out those lazy Poles once and for all.

    Wait…..you’re talking about the Greeks………never mind!

  • JR

    A great job on the part of the Germans to enforce fiscal discipline. And a ridiculous analysis on the part of Adrian Michaels, who claims that the only reason Germany can be fiscally disciplined is because countries like Greece spend too much. What a life-saver Greece, Spain and Italy have been throwing money down the tubes!!! Only in the twisted minds of Keynesians is all spending equal.

  • I have been watching the Greek economic drama with some amusement, as they are a fabulous example of the results of a socialistic system which has gotten completely out of hand.

    The number of people participating in demonstrations is reported as high as 60,000, but a quick search on Google shows the estimated population to be 11 million, so this is a very small percentage of people. As such then, I cant characterize the whole country as entitlement-poisoned, but they are in a deep pickle indeed. The greeks better start working harder and having a lot more sex, or it could take a generation or more to dig out of the mess in which they find themselves.

  • Subotai Bahadur

    I may be mis-interpreting; but what I see is less ire at Germany [as Germany] yanking the chains of the “poor” Greeks, who deserve it because they got themselves into this mess. It is more along the line of Schadenfreude.

    Your Mileage May Vary, but from the point of view of this opponent of the EU; the whole Vierte Reich enterprise has been nothing more or less than a conspiracy of primarily the elites of France, Germany, and Belgium to use “soft power” in lieu of the hard power that they do not have to establish a hegemony over the rest of Europe for the benefit of the three central countries.

    This “soft power” perforce included a healthy dose of mendacity and lies about a bunch of wonderful sounding “principles” that were only meant to last until such time as the constituent former nation-states were no longer in a position to re-assert their sovereignty. At which point, all would stride boldly into the future under the guidance of the elites; the descendents of Plato’s philosopher-kings who are more enlightened than the rest of the mere mortals.

    Unfortunately for the EU Nomenklatura, they relied on the efficacy of central planning and forgot that central planners don’t think of everything.

    What we have here is taking note and pleasure at the exposure of the innate hypocrisy involved in their wanna-be Reich. And hopefully, this is a chance to use the bad luck of the Nomenklatura to bring the whole thing down.

    First let me stipulate that I am not a nice person. But I am a pragmatic one. One of the measures of who the mark in a con game is; if you look around and cannot tell who the mark is, it’s you. Right now, a whole bunch of the former nation-states in the EU are looking around and realizing that it is them. It may be for different reasons, but there is more than passing disquiet afoot. The poorer states are realizing that the gravy train that they thought that they had signed up for, along with the appearance of being able to diplomatically punch above their weights in the corridors of Brussels is based on a lie. The middling former-nation states are suddenly realizing that the cost of the poorer states may well fall on them if the central states can find a way to dump it on them [from articles I have been reading in Brit papers, that is a worry for some there]. And the central states themselves are not even remotely eager to pay for their vassals, because the entire idea was that the entire enterprise would be run for the benefits of the central states.

    There is a great deal of disquiet, and in that disquiet is opportunity. And it is not only State actors that can take advantage of the opportunity.

    Private individuals and groups outside the central states should be reprising Britain’s traditional policy towards the Continent, aiding forces favorable to Britain without direct state intervention.

    Brussels, on behalf of France and Germany too, is going to try to reinstate controls; budgetary, macro-economic, and political. Both Talleyrand and Richelieu are long dead and have no successors capable of the same quality of mendacity. There is an extremely high probability that the relatively inexperienced Mandarins in Brussels, who only this year got their own foreign and defense Minister; will do something very stupid and counterproductive if they face opposition.

    It should be the policy of those who oppose the EU to encourage resistance to any EU diktats by the lesser former nation-states. The recent threats by the EU to invoke Article 126.9 of the Lisbon Treaty to literally take total control of the Greek budget is one such diktat. Greeks are, admittedly against their own long term national fiscal best interests, taking to the streets and pressuring their government to refuse to make the cuts demanded by the EU. This should not be ridiculed. This should be encouraged.

    If the Greek government ends up telling the EU to micturate up a rope; the EU will have one of two choices. It can either admit the impotence of its “soft power” to compel actions by its constituent former nation-states, or it can try to compel obedience.

    If it admits impotence, it will either have to functionally eject Greece; showing a way out for all of the former nation-states, or have to find a way to continue to subsidize Greek spending overtly or covertly at the cost of the central states and middling former nation-states. Which is not a stable condition for those states.

    If it tries to compel obedience, it will have to try to openly destroy the pretence of sovereignty that Greece has. Such will cause either Greek secession from the EU or violent resistance to whatever satraps are sent to enforce their will. Either will shake the foundations of the EU. If violence breaks out, the EU will either have to yield, with results as above; or try to muster sufficient force to suppress the violence. And that would break the EU up completely. The prospect of French and/or German troops fighting partisans in Greece will not sit will in their respective countries, or in the rest of the EU. Nor will a call for troop allotments from other constituent former nation-states be taken well.

    The proper course for those who wish the EU ill would be to heighten the contradictions within the EU. If I may suggest:

    1) support in word, media, and contributions for the Greek strikers putting pressure on their government to resist the EU.

    2) similar support for those calling for resistance to EU demands in the rest of the PIIGS states.

    3) campaigning simultaneously within the non-PIIGS states to resist being placed on the hook for bailing out the PIIGS states. In Britain, a non-Eurozone area, being taxed to subsidize the Euro should prove especially unpopular. But similar points should be made to the taxpayers of the other non-PIIGS states.

    4) if compulsion is the route the EU takes, encouraging resistence to the compulsion in all its forms would be profitable.

    There is an old Napoleonic Wars toast that may be appropriate; Confusion to the French!

    Subotai Bahadur

  • boarwild

    There comes a time when the piper must be paid. Somebody must play hardball with the softies. Why not us?

  • ian

    Maybe some of the other countries thought they could get a free ride off of countries like Germany when they joined the EU. I can’t say I feel the least bit sorry for them – why should Germans, who work hard and save their money pay for the mistakes of those who don’t.
    If I were German, and were being asked to pay I would be really pissed off too.

  • Eric

    Your Mileage May Vary, but from the point of view of this opponent of the EU; the whole Vierte Reich enterprise has been nothing more or less than a conspiracy of primarily the elites of France, Germany, and Belgium to use “soft power” in lieu of the hard power that they do not have to establish a hegemony over the rest of Europe for the benefit of the three central countries.

    Well, maybe so, but what is the point of having an empire if the money flows to the provinces instead of the other way around?

  • Arbeit macht frei, nicht wahr?

  • ThousandsOfMilesAway

    what is the point of having an empire if the money flows to the provinces instead of the other way around?

    Now this is a very good question. With attempts to form similar unions elsewhere in the world underway, maybe you misjudged where the true power resides? As usual, simply look where the money does end up.

  • Eric

    Now this is a very good question. With attempts to form similar unions elsewhere in the world underway, maybe you misjudged where the true power resides? As usual, simply look where the money does end up.

    So the true power resides in Athens? Mmmmmmmmm…

  • haha

    The Germans are strong because they are not silly about money, like the greeks are.

    I know people can be idiots, but it’s still surreal watching people riot in Greece, being quoted by the media to the effect that they’re angry because they feel that the government should try to tax the “rich” more instead of cutting back on ridiculous amounts of government spending. The same ridiculous spending which pays the salary of most of those same angry people, because they’re public employees.

    They truly don’t understand how they got into this mess. If I was Germany, I’d tell them to piss off, too.

  • pete

    Greek? German?

    I thought we were all Europeans now.

  • Anthony

    How can anyone really blame the Germans on this? If anyone should be rioting, it is the Germans, not the Greeks. The Germans have kept their defecit in control, reformed the public sector and have avoided the stimulus rush. Hence, their public finances look pretty good.

    Which means they are going to have to pay for it.

    So are Germans now going to have to retire at 69 so Greeks can retire at 61?

  • Mike

    Hello from an American ex-pat in Germany,

    The Greeks lied to get into the Euro, they lied repeatedly to avoid a fiscal penalty, and now it’s everybody’s fault but their own.

    After following link after link, I am gob-smacked by the ignorance of these Brit chatterers about the situation, not the least Mr. Pearce (who seems also not to have read the articles to which he links). The rules have been there from the inception of the Euro. But one that’s not there is that Germany has to pay Greece’s debts.

    Not every country in the EU is in the euro. Don’t they have mirrors in the UK? Let the Greeks go back to their drachma. The world survived Britain’s retreat from the ERM and it will survive this.

  • michael

    If I was going to classify this as a topic – chickens come home to roost would seem OK. The EU is a French organisation constructed to suit the French. Sooner or later the Germans will get fed up with it.

    It seems to me that most of our problems with the EU, and NATO, would be solved by expelling France!

  • Joe Blow

    Deutschmark, deutschmark, ueber alles…

  • Sam Duncan

    To the critics: It’s not about whether Germany is right or not to complain about Greece sponging off it (of course it is); it’s about the fact that Greece is in a position to do so in the first place, and the growing cracks in Euroland because despite all the assurances of unity ten years ago, that arrangement was never going to end well.

    The poorer Euro nations were sold the project on the basis that somehow Germany’s economic fairy dust would rub off on them purely by virtue of being “in”, without any further effort on their part. So they haven’t put in any.

    Germany is now beginning to notice.

  • Situations in which A lives off the welfare or charity of B end up creating disfunctional relationships. This is true whether A is a family member incapable of supporting himself, a recipient of state welfare, a poor country receiving aid from a rich country, or a recipient of the EU cohesion fund. The lesson is generally do not create welfare systems and make it easier for people to support themselves. (Free trade. Property rights. Less regulation. The rule of law. All that kind of stuff). Also, do not accept welfare of any kind other than on a very short term basis if you can possibly help it.

    On this specific case, the Germans are still paying the price of a particularly bad decision they made 15 or so years ago, which was to reunify on overly generous terms with the east. This messed up Germany finances, which was bad in itself. It did the East Germans few favours, creating a lot of uncompetitive labour and a lot of unemployment and unemployment. (I would suggest a trip to some of the grimmer bits of Mecklenburg-Vorpommern if you don’t believe this). But I am starting the think that its role in the present crisis was worse.

    Basically, the euro was envisaged as a currency union between Germany and France, with a few smaller northern countries thrown in. The “convergence conditions” required that the southern countries would only be let in as a reward for major budgetary reform, and it was hoped that the euro would be an incentive for some of them to achieve this. (At the time, people were talking principally about Italy. Nobody seriously believed the Greeks would ever manage it). However, the consequences of the terms of German monetary union led to Germany not satisfying the fiscal conditions either. Therefore, the choice was to abandon the project (and the people who lead the EU are frightened that if they abandon one big project the wheels will fall off the whole thing) or for Germany to lie about its own finances. Once Germany had lied about its own finances, Germany, France and the EU were unable to insist that anybody else told the truth either. Thus we got a euro full of nearly bankrupt countries that was going to run into trouble at the next crisis, but whose situations got significantly worse due to the artificial boom created by their membership of the euro. And we also ended up with a whole lot of bankrupt countries that should have been forced by the markets to devalue, but which no longer easily can.

    Whatever their other merits, the Germans should be strongly criticised for messing up the economic aspects of reunification, and should be condemned for lying about their finances later.

  • Archaeopteryx

    I wish very much that Germany had not gone against historical and done with the Euro what pretty much amounts to handing 3d World nations, which, face it, Greece is, the keys to the printing press.
    Any sane individual has to be rooting for Germany in the current conflict because…
    Think what the worldgot the last time the German currency was destabilized. …

  • A Greek

    A little lesson in history. In 1941 Germany conquered Greece, and during the military occupation 1/10 of the population was killed or died of famine because Germans stripped off the country to support their military operations and the well-being of the Germans themselves.

    At the same time, the Germans took a “loan” from the occupied Greeks, a loan which they never repaid.

    In the 1950s to 1970s, Greece was in ruins and trying to get back on its feet, and another 1/10 or so of the remaining population emigrated to Germany and Australia, helping in its industrial production, while whole regions of the country became deserted and whole sectors of the economy suffered.

    More recently, in 2003 the clever Germans and other Europeans (and our dumb government) voted the Dublin II regulation which stops the flow of illegal immigrants within Europe, while making nothing to stop the flow of illegal immigrants into Europe. As a result, Turkey sends us boatloads of immigrants across the Aegean, and we have become a cesspool of the Third World as illegal immigrants can’t migrate into Europe (their final goal) and Turkey doesn’t want/accept them back.

    All these immigrants drain the Greek economy of billions of Euros by participating in its underground economy and then sending stipends back home, and paying no taxes while enjoying free schools/hospitals etc.

    With Dublin II, Europe has largely “shared the burden” of immigration by giving 75% of it to Greece.

    The Germans say that they shouldn’t pay for Greeks, but they ought to know that although they make a hell of a lot more money on interest on Greek debt than they give to Greece via EU subsidies.

    It takes two to tango, and while some Greek governments (primarily the socialists of the 80s) were fiscally irresponsible, they had willing partners in the Germans (and others) who were quite willing to make money lending to the Greeks at exorbitant rates, while now they are upset that Greece has difficulty during a global downturn.

    Germans scream about “paying profligate Greece”, but in reality it is Germans who profit from Greece and the other PIIGS, because they have a market for their products and they make 6% a year on Greek debt. If Greece goes under, it will be German and French pension funds that will lose their investment. Ergo, Greece will not be allowed to go under, ergo its chances of default are zero, ergo there is absolutely no reason for it to be paying 3% more on its debt than Germany.

    It’s all a BS ploy aimed at exerting political pressure on Greece to “reform”, i.e. cut back domestic consumption so that there will be money left over to pay interest which is funding the German welfare system.

    Germany doesn’t give money out of the goodness of its heart, but because it suits them to conquer Europe financially after having failed to do so twice in the last century by force of arms.

    Greek money is transferred to Germany via car purchases and interest payments. What goes around comes around.

    Greece’s financial woes have little to do with the country’s government and more to do with the global crisis, as Greece, having no major natural resources, relies heavily on shipping and tourism for its income, both of which were hurt by the global recession.

    The only problem with Greece’s government is that it has looked the other way (for political reasons) for far too long at the problem of tax evasion. When the global economy rebounds, and if there is political will to fight tax evasion, all Greece’s economic problems will be solved.

  • Lysander

    All these immigrants drain the Greek economy of billions of Euros by participating in its underground economy and then sending stipends back home, and paying no taxes while enjoying free schools/hospitals etc.

    Wrong. The untaxed economy actually adds to the net wealth and having the state take a cut does not somehow magically make economic activity more beneficial to anyone expect people who live off the appropriated tax money of others.

    Moreover taxes distort markets and provides perverse motivations, so not paying taxes is actually a social good. And more fool you for having ‘free’ schools and hospitals (which of course are not ‘free’ at all).

  • A Greek

    Wrong. The untaxed economy actually adds to the net wealth and having the state take a cut does not somehow magically make economic activity more beneficial to anyone expect people who live off the appropriated tax money of others.

    The illegal immigrants who send their children to Greek schools for free, use Greek hospitals for free, get paid without declaring their income and send their money to Pakistan or Albania or wherever are certainly not making a contribution to the Greek economy.

    The average illegal immigrant in Greece pays nothing to the state, but gains by using all the taxpayer-funded resources (roads, hospitals, schools, power grids, etc.).

    I am all in favor of low taxes, but no matter if taxes are low or high, they should be enforced for all, so that neither the super-rich lawyers and doctors who declare less than 10k Euro a year nor the illegal (and most legal) immigrants (who declare nothing or close to nothing) should get a free ride, while the burden is placed solely on the shoulders of honest taxpayers.

  • Lysander

    The illegal immigrants who send their children to Greek schools for free, use Greek hospitals for free…

    Sure and by simple deduction you should see that the problem is not the immigrants, its tax funded schools ‘n’ hospitals. Immigration and a welfare state is the problem, as many on this blog have argued before.

    …get paid without declaring their income and send their money to Pakistan or Albania or wherever are certainly not making a contribution to the Greek economy.

    Really? So you’re saying the goods and services they’re responsible for are NOT part of the Greek economy? How so? If an immigrant serves you dinner, in what way is that economic transaction not a ‘contribution’ to the Greek economy? Do both parties not benefit from this? Your grasp of micro economics seems poor.

    I am all in favor of low taxes, but no matter if taxes are low or high, they should be enforced for all…

    No. Its a civic duty to keep money out of the hands of the state and in the hands of private individuals, much as it is a civic duty not to give teenagers Ouzo and the keys to a Ferrari.

    …while the burden is placed solely on the shoulders of honest taxpayers.

    Your “honest taxpayers” are cows complaining other people aren’t getting milked… when they should be refusing to fund other people’s schools and hospitals. It is the fault of Greeks taxpayers for allowing a rapacious state to control so much of their life. The sooner the whole filthy system collapses the better for the genuinely productive people.

  • hovis

    Greece is merely a symtom of the Euro’s fundamental weakness of being a currency without political union. As pointed out in the FT article (linked in the Telegrah piece), Germany can only be export lead, surplus holding Germany due to the financial incontinence elsewhere. So I diagree completely with the oh woe poor Germans comments here. One point that hasnt been made here is that Greece is far from a poor country – it is simply that the state is weak, with most allegiance towards community and family, where the state is known as corrupt and incompetant – so why should taxes be paid. In this sense Greeks and Italians are similar. More power to the Greek’s elbow in showin up the sham that is the euro – even if their EU lovin politico elite dont think that’s what they are doing.

    Also as pointed out

  • kcs

    On to the larger point … when does Europe admit that a continent-wide currency and economic policy is unworkable?

  • kcs

    “Greece is merely a symtom (sic) of the Euro’s fundamental weakness of being a currency without political union.”

    Hovis, maybe the obvious reluctance of Europeans to embrace political union, and the proven unworkability of the common currency, are symptomatic of the folly of the entire enterprise.

  • michael

    What will destroy the EU in the end is nationalism.

  • A Greek

    Sure and by simple deduction you should see that the problem is not the immigrants, its tax funded schools ‘n’ hospitals.

    Tax-funded schools and hospitals exist throughout the western world. It’s the immigrants who use the welfare state without paying for it that are the problem, not the existence of the welfare state itself. The welfare state itself does not cause havoc in public finances if the people who use it pay for it via taxes. It only causes havoc when a large number of freeriders are added to it, and in the case of Greece there are about 1.5 million legal/illegal immigrants who pay virtually no taxes and make use of the system.

    Really? So you’re saying the goods and services they’re responsible for are NOT part of the Greek economy? How so? If an immigrant serves you dinner, in what way is that economic transaction not a ‘contribution’ to the Greek economy? Do both parties not benefit from this? Your grasp of micro economics seems poor.

    They are largely part of the informal economy. They don’t pay taxes and pay minimum or no contributions to the insurance/pension system. If an immigrant serves me dinner but doesn’t declare the income and the restaurant owner tax evades, then they make no contribution to the public finances. The honest taxpayers carry the burden for the dishonest ones.

    No. Its a civic duty to keep money out of the hands of the state and in the hands of private individuals, much as it is a civic duty not to give teenagers Ouzo and the keys to a Ferrari.

    I’m all for keeping money out of the hands of the state. The trouble is that the state has power, and some people can’t hide their incomes, while others can. So if dishonest X is able to hide their income but nonetheless uses the services provided by the state which is funded by honest Y, then X lives at the expense of Y.

    Your “honest taxpayers” are cows complaining other people aren’t getting milked… when they should be refusing to fund other people’s schools and hospitals. It is the fault of Greeks taxpayers for allowing a rapacious state to control so much of their life. The sooner the whole filthy system collapses the better for the genuinely productive people.

    No, they are complaining that THEY are getting milked to pay for other people. Tax evaders aren’t revolutionaries, they are leeches who use the state to leech over honest tax payers.

  • Jacob

    What is Germany trying to do ? Tell the Greeks to put their house in order ? How is that a bad thing ?

    I said it here several times: the EU is a good thing if it manages to bring some order and responsibility to the smaller members, which are prone to corruption and money printing.
    The big countries (France and Germany) have their faults, too, and they probably will fail to impose improved fiscal behaviour on Greece, for example. And then, the whole EU project will fall, as all here hope.

    But, still, the intentions were good: have an open, borderless market, one currency for all, responsible fiscal policies, etc. These are good things, maybe overambitious, but good.
    (There are also some bad aspects – like overregulation).

    Many countries, like Greece, Italy, Spain, Portugal, Romania and others, will be worse off when the EU falls.

  • RAB

    I’ve had a troublesome week, more personal than I have had to cope with for a long time.
    The laptop lost my comment a few days ago, about the Euro being a Political thing, and never a fiscal thing, seeing as the “Piigs” had fiddled their figures to gain entry, in the hope and , yes realisation of monetary gain.

    Now they are realising what they have bought into, and Germany too. This may explain it a bit…

    http://www.spiegel.de/international/europe/0,1518,682432,00.html

  • Ve haff vays of making you stop talking.

  • hovis

    kcs: you are pushing at an open door – I want neither the EU, the euro, political union or any of the vain folly attached which has brought us to the stage of interfering softer totalitarianism.

  • permanentexpat

    A little history
    I was living in Germany at reunification & most people have no idea of the overwhelming, if short-lived, emotion. The nearest comparison in the UK was the appalling ‘Diana moment’…for a period, the nation lost its reason.
    The ‘Ossis’ had lots of cash…because they had nothing to spend it on and the going rate of 13:1 conversion from the Ostmark to the Deutschmark wouldn’t have been unreasonable but Helmut Kohl put the arm on the ‘independent’ Bundesbank’s Karl Otto Pöhl (who resigned shortly afterwards) to exchange on a 1:1 basis…utter disaster; the Ossis went on a spending spree of mind-boggling proportions until every last pfennig had gone & the Solidaritätszuschlag was introduced.
    This means that all taxpayers in all Germany pay a (currently) extra 10% of their total tax, to support, exclusively, the former DDR.
    This has been going on for over twenty years & there’s no end in sight.
    Germans have a hard enough time paying for their own layabouts

  • Paul Marks

    The Greek government should cut its spending – so that it does not have to borrow money.

    It is that simple – and if the Greek government did that it would not need the German government.

    “But that is politically impossible”.

    O.K. then as Hayek said when told by a BBC interviewer that rolling back the state was “politically impossible”…

    “Then you are on your way to the third world”.

  • permanentexpat

    Is it now policy to smite comments for no apparent reason?

  • Is it now policy to smite comments for no apparent reason?

    Smitebot is a bot, so he does have ‘reasons’ or ‘policies’, apparent or otherwise, he has ‘parameters’… and as he is a bot-of-little-brain, he is an equal opportunity smiter.

    But I see no comments from you pending in limbo, so not sure what the problem is.

  • permanentexpat

    Perry….posted on German 1:1 exchange rate Ost/West when it should have been 13:1….We have been paying a Solidaritätszuschlag (Currently 10% of income tax) ever since…and no end in sight. Charity & blackmail begin at home…and in any case…timeo Danaos etc.