
Greek referendum results - atmosx
http://www.theguardian.com/world/ng-interactive/2015/jul/05/live-results-greek-referendum
======
raesene9
I'm honestly puzzled by what the Greek Government's endgame is here. It looks
like they've won their vote, but what's next?

They return to Europe tomorrow and demand a better settlement. Why do they
think the other Eurozone governments will accede to that demand?

Yep the greek government now have a clear democractic mandate to demand a
better settlement, but that doesn't mean the other Eurozone governements have
to agree to one.

The bit that I've not seen mentioned prominently in many articles on this is
that every billion Euros that is forgiven from Greek debt or that is provided
in aid, is a billion Euros that must come from the other Eurozone economies,
and by extension their taxpayers.

From a political perspective what national parliament are going to pass a bill
that costs them that money, at a time when their own economies, in many cases,
are already suffering.

Also AFAIK a new bailout deal needs to be passed in all 18 other Eurozone
nations, unanimously...

~~~
hackuser
> The bit that I've not seen mentioned prominently in many articles on this is
> that every billion Euros that is forgiven from Greek debt or that is
> provided in aid, is a billion Euros that must come from the other Eurozone
> economies, and by extension their taxpayers.

It's not at all a zero sum game. The other nations benefit significantly:

1) They gain political and economic stability for the institutions involved
(the EU, the Euro, etc.) and for Europe in general.

2) They avoid an economic and political meltdown in a European country. Such
situations spawn other problems (crime, refugees, political extremism, etc.)
and those problems tend to spread across borders.

3) They gain a more prosperous and stable trading partner, which helps
everyone.

4) They gain the precedent that when they are in trouble, for whatever reason,
other nations will help them. Germany might recall the forgiveness of their
massive crimes (and war debts) by their neighbors, enabling them to become the
largest economy in Europe today. (EDIT: And all the creditor nations are
depending on another country to defend them in case of war.)

5) They avoid Greece forming stronger bonds with other powers, such as Russia
and China.

6) There also is the simple moral gain, that the impoverished in Greece won't
be driven to further misery.

The perspective that all that matters is money, and that it's every nation for
itself is unrealistic.

~~~
raesene9
You're point are all at a high level valid, but in raw Euros, countries who
are already financially stretched will be asked to write-off tens of billions
of Euros, which they will have to finance through increased debt.

That's tens of billions removed from their taxpayers.

If you're a national of another country who is currently undergoing painful
austerity and Greece gets significant debt forgiveness, wouldn't you want the
same for yourself?

Ireland, Spain, Portugal have all taken significant pain to their economies,
do you thinnk their leaders can easily ask their tax payers to take more to
bail the Greeks out?

And then if they do, would they not want their own debt forgiveness? The rest
of Europe can't sustain a large number of countries seeking debt write-
downs...

~~~
hackuser
I don't see Europe as so economically fragile. If it were a nation, the EU
would be the wealthiest in the history of the world (with the possibly
exception of the U.S.; I'm too lazy to look it up).

This is hardly a novel or outlandish situation. The nature of bankruptcy is
that creditors get a haircut; many nations have had their debts reduced
(including Germany). The nature of civilization is that those with resources
help those without.

> would they not want their own debt forgiveness?

It's theoretically possible, but the same could be said of any bankruptcy (my
neighbor had his/her debts forgiven; do I want to go bankrupt too?) or for any
program that benefits one region/state/industry more than another, yet these
programs persist.

Also, maybe the EU or Eurozone does need a program to help all struggling
states.

~~~
iofj
The long answer:
[https://en.wikipedia.org/wiki/European_debt_crisis](https://en.wikipedia.org/wiki/European_debt_crisis)

TLDR: Greek debt is used as collateral for loans by European banks. When Greek
debt takes a haircut, most (nearly all) European banks have to choose one of
two options : either they can raise capital equivalent to the net Euro value
of the haircut OR they have to reduce the amount they're loaning out by the
net Euro value of the haircut _times 100_ (it was times 50 in the last
crisis). In practice for most banks that will mean raising 3-4% capital (which
will still seriously impact their share price of course), but apparently in a
few cases it's near-distressed banks that'd need 20%.

Most banks will use a combination of both, so this will mean that effectively
money loaned out across Europe by banks will have to reduce by 5%-10%.

[1]
[https://www.ecb.europa.eu/mopo/implement/mr/html/calc.en.htm...](https://www.ecb.europa.eu/mopo/implement/mr/html/calc.en.html)

------
tristanperry
Looks like a solid No victory - a 21% gap between no and yes.

Live results available at
[http://ekloges.ypes.gr/current/e/public/index.html#{%22cls%2...](http://ekloges.ypes.gr/current/e/public/index.html#{%22cls%22:%22main%22,%22params%22:{})}
(click on GB flag on bottom left to change to English)

~~~
tptacek
Doesn't that depend on where the current results come from? If you watch the
results of a US Presidential election on the county level, you can see much
wider swings; the cities, which vote D, often turn in their results much later
than the rural counties.

(Or maybe in this case, the results really are representative. I know nothing
about Greek politics.)

~~~
alexgia
The results are in real time and are representative. Each voting center sends
its results via phone. The site has also an api
[http://ekloges.ypes.gr/current/more/customizer/paramsdoc.htm...](http://ekloges.ypes.gr/current/more/customizer/paramsdoc.html)

~~~
tptacek
I think we're working from different definitions of "representative" The sense
I mean it in is, "the election centers that have reported results are
demographically representative, and therefore predictive, of countrywide
results".

That might be the case, but you didn't provide any evidence to suggest it is,
so the more likely explanation is that you thought I meant something else by
the word.

~~~
alexgia
The results are from all voting centers. Once a voting center finishes
counting, it sends it to the data center. So the data are sent more or less
randomly to the data center. You are right that this does not mean that are
truly representative. But for the sake of simplicity we can call it
"representative".

~~~
tptacek
Gotcha. Thanks for the clarification!

------
alextgordon
Piketty, Stiglitz and Krugman support a No vote, so if the Greek people are
wrong on this, at least they'll be wrong in esteemed company.

[http://www.theguardian.com/world/2015/jul/03/greek-
referendu...](http://www.theguardian.com/world/2015/jul/03/greek-referendum-
what-the-experts-say)

~~~
mike_hearn
Not really .... their rationale isn't very good. Krugman disappoints, as is
often the case. His logic is, "an elected government made unreasonable demands
on other nations and when they refused, this was those countries attempting to
replace the Greek government".

Well, no. It's just them refusing a bum deal. If the result of that is Syriza
falls, that'll be the Greek's doing, not the EU.

Heck, the Eurozone FinMin's have been incredibly patient with Greece. It
cannot be easy to negotiate professionally with people who are constantly
calling you Nazis and terrorists for simply attaching some conditions to yet
another loan.

~~~
DenisM
Krugman could have done a better job explaining his argument, but I think it's
solid at the core: there is nothing to gain for the Greek from more austerity,
that will only lead to further contraction of the economy. Greece needs
inflation, not deflation.

------
marvel_boy
Newbie here. It seems that the result is a solid NO. What are the
implications? Spain and Portugal will be the next to fall?

~~~
tptacek
To what extent does Spain's political system manage its civil service as a
spoils system for the benefit of party supporters? Greece apparently invented
entire departments to pay party members.

To what extent do Spain's entitlement obligations (health care, retirement,
&c) track its economy? Greece apparently provides Scandinavian-grade benefits
on Alabama-grade revenues.

To what extent was Spain's accession to the EU exploited as a bonanza for
foreign banks? Greece's debt is apparently the product of a ratings arbitrage
scheme that occurred when its speculator-grade sovereign debt suddenly became
backstopped by the ECB.

To what extent do Spain's citizens buy into the financial philosophy of the
EU? Greece has massive self-employment, a thriving undocumented market, and
pitiful revenue collection. For decades, Greece has "financed" itself with
stated revenue preferences (high tax rates) that do not meaningfully track
revealed revenue preferences (low tax collection and enforcement).

~~~
bjourne
> To what extent do Spain's entitlement obligations (health care, retirement,
> &c) track its economy? Greece apparently provides Scandinavian-grade
> benefits on Alabama-grade revenues.

The situation about Greece is mired with propaganda and media tells us that
Greeks just want to lay on beach, never work and retire when they are 50. I've
heard so many parrot that because they read it in a magazine and it is not
true. Greeks work the most hours in the EU and their retirement age is higher:
[http://www.newstatesman.com/blogs/world-
affairs/2012/05/expl...](http://www.newstatesman.com/blogs/world-
affairs/2012/05/exploding-myth-feckless-lazy-greeks)

So there is no reason to believe that "Greece apparently provides
Scandinavian-grade benefits on Alabama-grade revenues" is true if it is not
backed up by stats proving it to be true.

~~~
tptacek
You've refuted a statistic I didn't provide. The full retirement age in the US
in 66 (soon to be 67). The average retirement age in Greece is 61. 17.5% of
Greece's GDP goes to retirement spending. US public retirement insurance is 5%
of GDP.

The comparison I made isn't "lazy" versus "industrious". It's "revenue vs.
spending", using the USA and Scandinavia as anchors for comparison. Greek
revenue is more like USA revenue than Swedish revenue. Greek spending is more
like Swedish spending (Swedish retirement age: 65) than like USA spending.

I'm trying not to make value judgements. I don't believe that the Greeks are
lazy and sitting on beaches. It does, however, appear that their fiscal policy
is mismanaged.

~~~
bjourne
I can't refute your statement "Greece apparently provides Scandinavian-grade
benefits on Alabama-grade revenues" because it is very vague. In either case
the onus is on the person making the statements to back them up not on other
persons to refute them.

The reason I made the comparison with retirement age is because you can ask a
random person on the street in Sweden or other country whether Greeks retire
earlier than the EU average or not and (I'm sure) almost everyone people will
say that they retire earlier even though that is false.

Bluntly, you made two statements 1) Greece apparently provides Scandinavian-
grade benefits and 2) [has] Alabama-grade revenues. Back them up with evidence
or else you are just parroting back what someone else told you.

~~~
tptacek
First, we're all just "parroting back what someone else told us", unless one
of us is secretly an economist specializing in the public sector of Greece.

That said: it's really not that vague. Go to the OECD stats site. Go to
"Social Expenditure", isolate "old age" retirement benefits (which in Greece
start at 61), go to the column on the table with the most recent full data,
sort that column, note where Greece falls on it, note where Sweden falls on
it, and note where the US falls on it.

Now, in another tab maybe, go to Public Sector/Taxation, to comparative tables
for tax revenue, and do "total tax revenue per capita". Make the same
comparisons. You will note that the US actually gets quite a bit more money
per citizen than Greece does. My intuition was the same, which is why I chose
Alabama for the comparison, not the US as a whole; Alabama is one of the
least-taxed states in the union.

It is true that the intuition to make this comparison came from someone else
(in my case: Matt Yglesias, though lord knows where he got the idea to make
the comparison). What is also true is that the assertion is verifiable.

~~~
bjourne
Thank you for checking. Do you mean the sheet "Public expenditure on old-age
and survivors cash benefits, in % GDP"? What numbers are you comparing
exactly? The stats I found end at 2011 and the Greeks pensions have been
slashed since then so I wonder how reliable they are for their current pension
benefits.

Anyway I found stats for Finland (the only Scandinavian country using the
Euro) for 2015 here:
[http://www.etk.fi/en/service/average_pensions/1453/average_p...](http://www.etk.fi/en/service/average_pensions/1453/average_pensions)
and for Greece for 2015 here: [http://www.macropolis.gr/?i=portal.en.the-
agora.2622](http://www.macropolis.gr/?i=portal.en.the-agora.2622) If the
numbers on those pages are true, then the average pensions per month are 1588
and 884 for Finland and Greece respectively.

------
anonymousDan
It's actually pretty impressive how quickly they managed to organize the
referendum.

------
orf
Well great, it seems like the No vote has comfortably won. The futures looking
bleak for Greece.

~~~
elektromekatron
Greece is in bad shape but might actually do better from having more
independent control while sorting out its finances as the direction from
Europe at the moment suffers from severe conflicts of interest. Either a yes
or no vote could have bad consequences as Greece is between a rock and a hard
place right now, but the reputation of the Eurozone leaders is what really
took a hit here, not Greece.

~~~
jedmeyers
What does "sorting out finances" even mean in the context of a country that
does not actually produce/export anything[1]? Will they somehow make money
appear without outside investments?

[1] compared to UK, France, Germany

~~~
mike_hearn
They do produce and export things (note: tourism is a kind of export). Some of
the news stories have anecdotes from manufacturers complaining they cannot
import the raw materials they need.

The problem is they import a lot more. Including things like food, fuel and
electricity.

Sorting out Greece's finances mean a very sharp and severe recession that
makes what they went through so far look like a stroll through a grassy
meadow. Eviction from the EU is not entirely unthinkable, especially if the
collapse triggers a refugee crisis with a lot of internal migration.

~~~
elektromekatron
I think you have it wrong, they are a major food producer for the EU.

------
oldmanjay
>Chorafa said if the Yes vote won, she would be so disappointed she would
think about leaving Greece with her two small children and moving abroad.

That reminds me of the spate of Americanslwho, upon the Supreme Court striking
down gay marriage bans, said they were moving to Canada. I feel like some
sentiment is wildly out of whack here

~~~
szx
Uh, no - this is a completely different situation. Whereas gay marriage has
little to no effect on most Americans' lives, the results of this vote will
affect each and every Greek citizen for years (decades?) to come.

Moving abroad (assuming that option is available to you) might simply be the
_rational_ thing to do in such a case.

~~~
condescendence
The original commenter already responded to this post, but I'm pretty sure he
was making fun of the fact that someone was pissed about the United States
allowing gay marriages, and so the solution for them was somehow moving to
Canada -where they've allowed gay marriages for much longer.

Basically, I don't like what they're doing here so I'm gonna move to someplace
where they're doing it worse (a little backasswards in thinking, maybe even
ignorance). This woman would likely move to elsewhere in the Eurozone, or
another country with similar banking/economics strategies.

