For a week, those of us who follow this hassle in detail have known that there exists a weird technicality in the IMF rules that allows countries to bundle their repayments for a whole month – and delay the payment to the end of the month – if it is too difficult for them to administer too many payments in a short period of time.
Anniversary: holography's father Dennis Gábor was born exactly 115 years ago.The rule is meant to reduce the amount of paperwork. The Greeks have abused it because they obviously use it in order to extend the time in which they are living beyond their means.
In one of their "proposals", the malicious Greek Bolsheviks have actually used a formulation that made it likely that they were getting ready to use this technicality. It seems that no one reads their rants anymore because everyone – especially the International Monetary Fund – was completely surprised when they were told about the delay last night.
The technical rule was codified in the 1970s and before June 2015, it was only used once in the history. In the mid 1980s, Zambia – a country in black Africa – asked the payment to be delayed, too. Some people want to compare the current Greece to civilized countries like Ireland. But this is complete nonsense – and a form of racism, too. Despite the differences in the skin color, it is much more accurate to be comparing Greece to countries like Zambia or Nigeria.
In a sane world, a country with the economy and economic attitudes of Greece would be a member of the Sub-Saharan Union rather than the European Union.
We may compare Zambia and Greece and especially their economies. Greece has 11.5 million people. According to the Zambian Wikipedia page, Zambia has 11.5 million people. Well, the current number is close to 15 million but the populations are close enough, anyway.
Zambia's GDP per capita is about $1,700 while Greece's is quoted to be above $20,000. The latter number is complete nonsense – it mainly quantifies how much money per year and per capita Greece has been able to steal from other nations in the recent 40 years, plus a few layers of otherwise uncompetitive and unsustainable economic activity built upon these stolen funds (a commercial sector that may only sell its products and services to the public employees who should have starved to death if the rules of the economy weren't being totally twisted). The actual, independently productive part of the Greek economy may be about 10%-20% – a big part of the tourism sector may be a part of it. The figure over $20,000 should perhaps be called "Gross Domestic Devouring" but the actual "Gross Domestic Product" is vastly smaller.
Without this nonsensical distortions, it is clear that a sustainable Greece has the GDP per capita well below $10,000. Zambia's GDP growth is close to numbers like 7%; this quantity is negative in Greece. Zambia's exports are over $8 billion per year; Greece's exports are $27 billion year, just 3 times higher (despite the "12 times" higher GDP).
Lots of people in Zambia don't have safe water and toilets. All these things have been built everywhere in Greece, mostly for the "borrowed" (stolen) money.
The unemployment in Zambia is just 15%; it is 25% in Greece. In Zambia, industry makes up 34% of the GDP; it is just 15% in Greece. Using Obama's jargon, Greece doesn't make anything. There are many quantities in which Zambia looks healthier than Greece.
The policies that led to the fiscal collapse were analogous. In 1968, Zambia underwent the Mulungushi Bolshevik reforms that included nationalization of foreign-owned (and many other) companies. By the early 1970s, when the metal prices (that they export) dropped etc., it was already clear that their new, Greece-like communist system was absolutely unsustainable. The living standards decreased and for a few years, they were blaming "austerity" just like Greece does today. In reality, what both nations called "austerity" is just "poverty" combined with a loud and defiant denial of the reality.
While the very purpose of the word "austerity" is to suggest that the nation may decide whether it wants it or not, this poverty is not something you may "control". In both (and most other) cases, this new poverty was a result of anti-capitalist policies and overspending in the past. You should have executed all the leftists before it was too late but because you didn't, you can't suddenly "stop the austerity" i.e. become as wealthy as you were when your wealth peaked. The maximum you can do is to introduce the pro-market reforms now and neutralize the leftists now – better late than never. But the path back to prosperity can't be very fast or immediate.
Syriza has won elections after it has promised to its voters that it would defraud all the creditors, get all the money and advantages from them while doing nothing in exchange, in fact, giving no promises. They said that they know how to blackmail, they have prepared tons of negotiating tricks to succeed, and that's exactly what they have been doing for almost half a year. What these criminals are doing is on par with the Nigerian e-mail scams – this is the kind of culture similar to theirs. And it's being tolerated by many politicians in the West. They keep on participating in completely meaningless "talks" that only make the situation worse.
Greece should be allowed to die mercifully.
The condition of that country is incompatible with life in the economic sense. Syriza is nothing else than the most extreme symptom of the thorough decay of that country, its economy, its morality, its independence, and its hope. The Syriza criminals are just like putrefying bacteria devouring a decaying body. They will devour everything they can. You shouldn't expect anything good from them. And even if they promise something good to you, you shouldn't trust it.
Juncker, the boss of the EU commission (a would-be "prime minister" of the EU, if it were a country), is a friendly guy. He also offered additional €35 billion to Greece – a cheap loan up to 2020 – if Greece agrees to do reforms. In effect, it means that the last €7.2 billion tranche from the recent bailout that Greece has been waiting for would be expanded above €40 billion.
Every country that would feel that it may recover and become something more than a bunch of putrefying bacteria would happily accept this deal – the kind of deal involving pro-market reforms that has worked in so many other countries. Greece doesn't accept even this super-generous deal because that nation no longer believes that it can become a self-sufficient nation again.
They have decided to turn into parasitic bacteria forever. They should be treated as enemies, a problem that has to be dealt with assertively because any weakness is a path towards a systemic infection. The Marxist scum in Greece has said it explicitly and repeatedly that they want to do everything they can to disrupt the European economies and the capitalist system if they won't get their ransom – ransom from which the Greeks, a country not that economically far from Zambia, are living 3 times more prosperously than e.g. folks in much more productive Bulgaria.
Benjamin Franklin has said that 'When the people find that they can vote themselves money that will herald the end of the republic.' And indeed, the Republic of Greece ceased to exist as a republic in the conventional sense. I would add that 'When whole EU nations find that they can vote themselves money that will herald the end of the European civilization.' We are not there yet and we must do everything it takes to be sure that this is not where we will arrive.
If Europe (represented by its leaders) worked, it would do everything it can to protect itself. Helping a defiant Greece to become a thing of the past – to liquidate the failed state as a political force – should be a part of these efforts. Even if your goal were to help Greeks, it is simply impossible to improve things without showing them the correlation or relationship between work and living standards. Millions of people must go through the experience of complete poverty with no support from the government and thousands of people have to starve to death. Whoever thinks that Greece's economy may start to improve without these painful events is being childishly naive. There is absolutely no reason why things should be getting better in Greece simply because no Greek has faced any pressure that would send him or her in that direction!
This point – that there has to be pressure and the creditors are the only ones who is capable and expected to exert it now – is totally self-evident. Top German economics professors happened to agree with me and urged the governments to adopt a harsh attitude against the spoiled Greek brats. But too many European institutions are flooded with people who are nothing like the German professors when it comes to knowledge and principles – and who don't care when the future of Europe will start to decay or when hundreds of extra billions are wasted – so it's possible that the attitudes will soften again. (Since the elections, I found the attitude of most negotiators of the lender side surprisingly acceptable, however.)
Also, I am amazed by the capital that is still being kept in the Greek banks. Are you crazy, folks? You should pick the money today.
Please understand this as an invitation to start the full-fledged run on banks – with long lines etc. – today.
The civilized world can't afford a victory or semi-victory of another bunch of aggressive Bolshevik criminals. Just remember what these jerks did in Russia in 1917. Greece is less important in Russia but as long as you allow the country to be treated as "one of us", the implications for the whole civilization may be dire. So please, recognize the Greek thugs as our enemies and hermetically isolate that messy territory from the rest of us.