Home—Blog—Is Greece the most powerful country in the world?
Nov 01, 2011, 11:08
Posted byMerryn Somerset Webb
Comments (50)
The idea that Greece should have a referendum to decide on whether or not to accept the bail-out package from the rest of us has clearly come as a bit of a shock to the politicians who like to think they run the eurozone. So far, absolutely no democracy whatsoever has been introduced to the bail-out process and that, I daresay, is how they expected things to carry on. But the bail-out package comes with nasty conditions - public sector pay cuts, tax rises, lower pensions and the like – that it is hard to see any nation accepting without something of a fight.
So it makes sense for the Greek government to give the people the final say on the deal. If they don’t, they are bound to lose power soon anyway – this just gives them something of a chance of hanging on. You can’t have severe austerity without consent of some kind from your electorate. As John Redwood puts it: “In reality, there was no ability to deliver their preferred policy without some means like a referendum of getting people to accept the chosen course of action.” The fact that the Greek government – seemingly alone among Europe’s governments – is prepared to recognise that big events of this sort need discussion with their populations as well as with the euro elite is actually rather heartening.
But the fact that markets are diving this morning should tell us one more thing. Greece has all the power. The talk around the bail-outs is usually about what Germany is prepared to do rather than what Greece is prepared to accept. Germany is assumed to have the power. But Greece has now shown the markets that it just isn’t so. If the Greeks decide they don’t fancy the terms much and announce a disorderly exit, it is game over for the euro, for Europe’s economy and for Germany’s weak-currency driven export boom.
Time for everyone to start being a bit more polite to Greece. A senior member of Angela Merkel’s government has noted that he is irritated: “"Other countries are making considerable sacrifices for decades of mismanagement and poor leadership in Greece,” he says. I suspect that if they don’t want to have to start staving off the next banking crisis, they might have to make a few more.
Published in Blog More articles by Merryn Somerset Webb
By Bengt Saelensminde, May 21, 2012
May 21, 2012
By John Stepek, May 21, 2012
May 17, 2012
Leave a comment
(01 November 2011, 01:34PM) Complain about this comment
Nice additional comment from GFC Economics:"President Sarkozy and Chancellor Merkel are paying a heavy price for not putting Greece into a formal default in July. The opposition to ANY bailout has been rising and reached breaking point at the weekend. An earlier, more complete debt restructuring would have taken some of the sting out of the protests. But instead, the EU leaders ploughed on, hoping that the Greek people would tolerate years of austerity in return for the possibility that the debt/GDP ratio would eventually fall to around 120%, by the end of the decade. President Sarkozy and Chancellor Merkel miscalculated. With unemployment rising sharply in September – disproportionately among the younger generation – activists in Spain and Italy are likely to take note from the success of Greek protestors in potentially forcing banks to take a bigger, more complete debt write-off."
(01 November 2011, 01:57PM) Complain about this comment
We live in interesting times. So Greece is set to refuse the package, triggering a default. I wonder whether Spain, Italy and Portugal will then also decide they may as well default and leave the Euro too......I wouldn't blame them. That would leave a core block of France, Germany, Netherlands and Austria then the rest. It's a bit late for Germany to offer a better deal to Greece as they've already put the referendum on the table, perhaps that's what they'd always threatened to do and Merkel/Sarkozy have has their bluff called. In the meantime Greece is set to become the cheapest holiday destination in Euorpe if they return to the Drachma, which should at least shorten the dole queue.
(01 November 2011, 02:02PM) Complain about this comment
Great piece Merryn - very thought-provoking. True that all the talking & planning done by politicians with sod-all consultation with public. The fact that the game will be depth of austerity vs severity of bank's haircuts, ie - pain for the public vs pain for the banks, is too often overlooked in media more obsessed with today's headlines re protesters. In the final analysis, public's views WILL matter - even in UK (despite 3/4s of pop being asleep). The issue is who should pay. Answer is too often NOT those who caused problem.
(01 November 2011, 03:37PM) Complain about this comment
Note sure we're briefed on all the issues in play. If Greece rejects the bail-out, they’ll have no money to pay next month’s public sector salaries, let alone welfare distributions, right? So, unless the public accept the austerity (with the referendum conveniently absolving government of blame en route), they might get nothing at all? No pay, or reduced pay. You've got mouths to feed, how would you vote? Nice politics?
(01 November 2011, 04:05PM) Complain about this comment
Jim Rogers is being proved correct (again). Greece is insolvent, it was insolvent a year ago. If they had defaulted Europe would be a year closer to ultimate recovery. Instead politicians have simply blown a lot of taxpayers money. Greece not defaulting has made the problems worse. Greece is bankrupt, result: default. Anything else is wishful thinking.
(01 November 2011, 05:23PM) Complain about this comment
Merryn,Excellent article, at last someone understood that "Time for everyone to start being a bit more polite to Greece"... Thank you Merryn
(01 November 2011, 09:23PM) Complain about this comment
Merryn,Just a question: Why did our PM have to wait almost two years for that decision?Always great to read you, either in the FT or here.Cheers,Alex
(02 November 2011, 09:20AM) Complain about this comment
Great article. It underlines the real power of Greece that should be exploited on entering the negotiations two years ago. Unfortunately, weak political leadership in and out of Greece has managed situation at the expense of public only up to now. Though, it cannot end like that. Public started claiming the hearing of its opinion. Announced referendum is a response attempt to that claim.
(02 November 2011, 02:58PM) Complain about this comment
Hi to all. i would like to give a little tip to the number 4 comment.at the same time Greece stop paying its dets then the money even drachma generates in all aspects will be more then enough to pay and feed all the Greek mouths!!!!!!!!!!!if you just thing my friend Michael, that Greeks pay in interests over 15 billions a year!! so they way Angela treat people comes back like bumerang!!!so will just have to wait a little bit more.by the way this article is grade!!!
(02 November 2011, 06:57PM) Complain about this comment
Nice article! interesting point of view! I would like you to know, that the greek people are overburdened with a loan of 110 BILLION euros from which 108 BILLION were given to the bank sector to inforce bank liquidity and inhanche the market movement, which of course, never happened. In addition, France and Germany never minded to loan us great ammounts of money to buy weapons from their military industries. And much more. Forthwith, I am not comfortable, knowing what will happen if we vote NO to Euro, even though living here in greece, is really difficult right now. I expect that the results for us, primererly, will be devastating and the rest of Europe will not do any better, i think.
(02 November 2011, 07:02PM) Complain about this comment
In a country that has 850.000 sect workers from the private sector and over 1.000.000 workers (voters) in the public sector, which they serve corrupted politicians,the situation is not so good.Nobody told us to lend money in order to feed them, instead of making investments and start producing something ,(anything).And now they tell us that we dont have to pay them back and it dosent really matter if we loose a bit of our pride and dignity.Shame on them and shame on us because we elected them for the last 30 years.Now we have to look back and find our roots, pay the Leopards(army tanks) ,the VW ,the Mercedes,the submarines,and the audi of Madam Merkel and the war ships and blind aircraft (Mirrage) of Mr Sarcozy.It must be nice to feel safe in the center while someone is guarding your border with Asia and then to charge him too..
(02 November 2011, 07:14PM) Complain about this comment
Thanks for the glimpse of light that you are shading upon this. The forest and not the tree. It seems Greece is the first EU country that has the heart to bring all this down on the sidewalk and to give a punch on economical terrorism.Greeks know that they are going to bleed in this fight but " ἢ τὰν ἢ ἐπὶ τᾶς" once again. Here we go....
(02 November 2011, 08:03PM) Complain about this comment
The EU economical terrorism against Greece should stop write away before we vote NO to the EU & Euro crashes down sharply. Our lifes were better before entering the blackmailing European community. We vote for our freedom against unpolite EU Politicians. Eu citizens beware of EU New Dogma of minimizing "Middle class citizens", because tommorow is your turn!! Revolt against all kind of economy terrorists who play Monopoly with peoples lifes.
(02 November 2011, 08:50PM) Complain about this comment
Our country has gone through rough patches before but has never been weak -hearted! The Greek people are strong and proud! We will again do what is needed of us so that we can provide our children with a future and a country they deserve. We owe it to them.
(02 November 2011, 08:59PM) Complain about this comment
As a citizen of Greece I refuse to be insulted, brow-beaten, and ridiculed by a group of historically illiterate politicians and so-called reporters of the European elite. My fellow countrymen and I refuse to apologize for our heritage a great part of which is conveniently found in all their museums..So before they start wagging their fingers at me and my country why don't some of them go back to their history books to see what Greeks have survived throughout its more than 2500 years of existence. Personally, I would rather starve than give up my sovereign right to ANYONE along with my DIGNITY.Here's a quick thought considering that everything is all about MONEY what if we all the nations that they insultingly refer to as PIGS decided to CEASE buying German made products
(02 November 2011, 10:03PM) Complain about this comment
First of all may I suggest that if Greece leaves the Eurozone, the results for my country would be devastating. Greece has almost no oil production, and although it is considered to be an agricultural region, because of EU measures over the past 30 years, we don’t produce enough food to sustain ourselves. And on top of that Greece is the temporary home of 2-3 million immigrants, mainly from, Pakistanis, Augustinians and recently Chinese, who in hope of entering Europe they have flooded Greece in the past decade.Europe and when I say Europe I mean Germany, owes Greece a lot. Do your readers know that in order to sustain its industry, it has forced all agricultural countries in Europe to use genetically manipulated seeds for most products, including grain? For centuries and until 20-30 years ago, all farmers in Europe have been saving about 10% of their product to plant for the next season.
Today European farmers have to every year buy their seeds from German owned Dutch industries (because the genetically manipulated seeds they have to buy don’t produce corps); otherwise the farmers won’t get any subsidies, which are crucial in today’s globalized market.This is only one example of German misbehavior within the EU and against Greece. I will not burden your readers with the closure of most Greek heavy and light industry, such as shipyards, paper and cloth factories, metal and electrical engineering industries, in favor of German companies, such as Siemens.By the way Merkel has been pressuring the Greek government not to fill charges and ask for compensation against Siemens for bribing its way to the position of the only supplier (monopoly-which is against EU laws) of electronic goods in Greece for more than a decade. The same is happening as we speak considering the 3 submarines Greece bought from Germany a few years ago and don’t float.
(02 November 2011, 10:04PM) Complain about this comment
I will not write about the German occupation of Greece, during which hundreds of thousands of Greeks died because of starvation and German reprisals for the Greek resistance. But I would like to mention that during the occupation Germany also confiscated and never returned the gold Greece had stored in its central bank. Today that gold is calculated to be worth over 100 billion Euros, which ‘accidently’ is the amount Merkel wishes to cut the Greek debt. Is there any dirty mind willing to connect the dots?
(02 November 2011, 10:05PM) Complain about this comment
In conclusion I would like to say that if Greece is forced out of the Eurozone, either by its initiative or that of its ‘partners’ (call me Germany), followed by Cuprous (where half the island is occupied by Turkey and recently has started exploiting some of the larger deposits of natural gas in the world) then soon after it will be Italy’s turn, followed by Malta, Spain, Portugal, Ireland, and eventually France and Belgium. The Eurozone will be left with only Germany, Luxemburg, Netherland, Finland, Estonia Austria, Slovakia and Slovenia; and Poland, Lithuania, Latvia, Czech and Hungary, whose economies are 90% controlled by Germany and its people culturally German oriented, as potential candidates. Does that sound as a German empire?
(02 November 2011, 10:30PM) Complain about this comment
Good article even though a bit superficial....its good to be polite as long as you do it for other reasons and not because you are afraid some unstable small economy with an unstable (define unstable any which way you please) government and a small population of 10.000.000 ho have an over-abundant sense of high worth will react unpredictably and mess it all up for several billion souls.Oh, yes. Admin. please mention the 1000 character limit before we type our comment, not after...its more polite that way.
(03 November 2011, 06:55AM) Complain about this comment
The European Union leaders were very happy to have Greece join the Eurozone. It translates to an export boom for Germany, notably, since Greece is importing a huge quantity of goods.However the European community is lending the Greeks at outrageous rates of 15%. would you lend your family members at such a rate pretending you want to keep him alive?The consequences could be fatal to Europe if Spain Portugal and Italy do the same thing. The logical winners would (again) be the USA and UK who, like vultures, are waiting to nab the remaining in order to maintain their ailing leadership.Keep in mind that the economic situation of the US is not that enviable with states like California at 400% debt/GDP and 40mln pax, NJ and Illinois virtually under chapter 11, and still borrowing at 3.6%.Any logics there??Someone explain me...
(03 November 2011, 07:16AM) Complain about this comment
Merkel & Sarkozy are trying hard (on behalf of the Rothschilds) to keep the Eurozone experiment going. Their aim is to make Europe 1 state so they are 1 step closer to the NWO.The best thing that happened in the last 2 years is this referendum decision. I am aware it might be done for all the wrong reasons, but the best thing for greece is to their own way and do their own thing. Of course it will be hard, but leaving it longer will only make it harder. Just have a look at Iceland. They went bust 3 years ago and are now slowly but surely recovering and have one of the stronger economies in Europe. Still a long way to go for the people living there but they are free from the millstone.Go greece. Vote for your freedom!!
(03 November 2011, 09:57AM) Complain about this comment
You Greeks are mental. Good to see such defiance. But talk about a pyrrhic victory. Do you realise what will happen to the price of food....petrol...heating oil...everything the day after you leave the Euro and your currency instantly devalues by 60%. The inflation/unemployment you're going to experience will make the proposed pension cuts and tax rises of the EU bailout seem like pennies. That will just be the start of it, look at how your politicians behave, they'll just start printing money to 'pay' your Unionised workers the amounts that they've been promised, that will further devalue the currency. You're going to see what Italy saw when the old Lira went from about 100L/$ to about 1500L/$. Mind you top marks for upsetting the French and Germans.
(03 November 2011, 12:39PM) Complain about this comment
I never thought that someone will ever wrote an article like that..I am greek and i am very proud..I just want to say that even we live the eurozone we will suffer but trust me we suffer now too..Noone from the european union want to save us,they want to steal from us..Our decenty,humanity first and then our natural wealth..Today greece is suffering but other countries have the same problems..Spain,Portugal,Italy..People have to fight for our rights,because we deserve it..Not only us but every human in this planet..If we don't fight now our children will hate us..I prefer to starve now than make my children suffer because i let them to take everything from us..Democrasy is something that you win,is not something that you get..
(03 November 2011, 01:00PM) Complain about this comment
Nice Article, but not all inclusive.....Greece will bring the whole house of cards down because, you cannot call on a nation to sacrifice its citizens to a path of indefinite growth, by supporting only the profits of the banking sector, and the exports of the industialized Northern EU members.It is also time to re-think the fractional currency policy, and turn to either a gold based economy, or a resource based economy.The fractional currency practised today worldwide, is a pyramid scheme, that will eventually fail, we just make the world a favour by hastening its inevitable collapse.We as Greeks have learned to fight against imposible odds....and whats important, we can accept poverty.... after all, as a nation we've been there.But can the EU afford a financial Tsunami of epic proportions?Is the EU prepared for break up, massive losses and Sinoamerican domination?Best of luck EU.... perhaps you will learn your lesson in time.
(03 November 2011, 01:22PM) Complain about this comment
@ alexYes it is going to be hell for a while....Even with the instant devaluation of the new drachma people will still make ends meet. current GDP is 54 billion euro and loans asside expenditure is only 52 billion euro.So the risk of a years poverty far outweights the 15 years severe austerity, brain drain, and negative growth.I have 2 kids, and I prefer them to grow with 0 debt, than 46000 $ they owe under the current circumstances!As for the german and the french recipy, of bleeding the patient dry..... that was practised in the 18th century, where they will soon return ;)
(03 November 2011, 01:23PM) Complain about this comment
Reminds me of the joke when all the parts of the body where fighting who is the boss. Google it to read it. It fits this situation 100%!
(03 November 2011, 03:41PM) Complain about this comment
I am a Greek and I call BS on this article,with all due respect.Greece has little to no power concerning matters to its own(!) national issues,how can you say Greece has the power over the bailout.The last 2 days,European politicians of the Eurozone have been claiming wholeheartedly that they don't care if Greece leaves the Eurozone and/or defaults,on the contrary!They are blackmailing the greek government in order to accept all the terms of the bailout and make the people vote on a referendum that says "Yes or no" to Greece staying in the Eurozone.I am ashamed,disgusted and full of anger to say that my country is powerless against the EU.Sorry for my bad grammar and the tone of my post,I'm hoping it gets published.
(03 November 2011, 07:25PM) Complain about this comment
Corruption has been running high in Greece and that HAS TO GO, but is there a worst kind of corruption than this: "So far, absolutely no democracy whatsoever has been introduced to the bail-out process".
(04 November 2011, 10:40AM) Complain about this comment
we 'll get through. greeks are proud. we will survive.
(04 November 2011, 01:25PM) Complain about this comment
Greece has THE MOST IDEAL location. Greece is the heart of Europe. NO ONE wants to lose Greece from the EU because without Greece they lose major ports, access to the East, naval bases, raw materials, and MANY more... To all of you who are sitting at home comfortable reading your usual blogs, don't get too comfortable. This attitude will eventually bite you in the ass!Also, only a GREEK man/woman can understand.Greece has a power on its side like none other: GOD!Whatever is to happen, let it happen... Greeks have the ability to overcome any obstacle. After all, our fallen fathers shed blood for a sacred word. This word is FREEDOM.PS. To all you naive blog readers sitting at home thinking you know it all about Greece. Don't bother coming on holiday, we know who you are... your type stands out from a mile away.Keep your money.
(04 November 2011, 02:40PM) Complain about this comment
Greeks will occupy Wall Street eventually and save the world from the bankers
(04 November 2011, 02:54PM) Complain about this comment
1) pay the 300 billion euros Germany did not pay yet since world war 2.2) which bail out are you all talking about?? It is not the money or the austerity politics that the Greeks dont want its the part that gives out the property and the oil and gas resorts in the country to the rich block france germamy usa
(04 November 2011, 07:46PM) Complain about this comment
Greeks in a while after they get rid off their puppet - Primeminister, they are going to save our asses again! They saved the world by shattering Italy, Bulgaria, Albania when they tried to invade and standing on Germany on WW2. Remember that France, Denmark, Sweden, Finland, Norway, Turkey, and many others either helped Hitler or surrendered without a fight! Go go Greek people! We are with you!
(05 November 2011, 07:41AM) Complain about this comment
Someone copy paste and sent this article to Mrs Merkel and Mr Sarkozi.
(06 November 2011, 01:40PM) Complain about this comment
Greece was sold by her politicians and concretely by the political party of socialists of Giorgos Papandreou.The bosses of (Giorgos Papandreou) are in Germany and in the USA.To the markets:You exterminated us, him you accomplished, bravo you, you accomplished a nation proud, a nation that gave everything in the culture, a nation that you gave [Sokrati], Aristotle, Hippocrates, [Aristofani], Pythagoras, [Papanikolaoy] (test [pap]) and other many,that sure if you ask your children you them they say, because to them they learn in their school.But Greece apart from those that I reported before, removed also efialti, as before thousands [chronia] Leonidas was betrayed from efialti, thus and now was found modern efialtes and us they betrayed.Somewhere here Greece says to you good night, leaves us now alone us to gather our pieces.
(06 November 2011, 02:54PM) Complain about this comment
* chronia means years in Greek
(06 November 2011, 06:35PM) Complain about this comment
That sounds familiar - betrayed and 'sold down the river' by incentivised puppet politicians.
(06 November 2011, 07:23PM) Complain about this comment
Europe's name comes from Greek mythology
(06 November 2011, 09:21PM) Complain about this comment
With all due respect, this article completely misses the point and the fact that it has drawn so many chauvinistic comments from Greek readers is further proof of that. We Greeks have completely screwed things up and what is happening now is of our own doing. Personally I am very glad that someone, at last, will oblige the Greek government to trim its spending and bring us into line with the rest of Europe. It is painful medicine but we need it!
(06 November 2011, 09:35PM) Complain about this comment
This is a reply for Alex,wondering how we would vote if a ''no'' meant no salaries,no money,no food for my child.We would vote ''yes'', my friend.A person's dignity is only worth the price you put on it, and there is no price for our dignity,and our indipendence.We didnt want the Euro in the first place and we definitely dont want to sacrifice (not our cosy life,or our wellbeing) our beautiful and historic country for a few billions,that will go to cover unethical,illigal and odious loans that come from the 19th century.Loans for which we have officially declared bankruptcy 4 times until now.We dont want any more loans.Hellas is a very rich country,capable to provide its people and many more with food,water,and wealth.If we really want to be honest,this whole mess is about our underground wealth.We have been unfortunate so far, with traidors for politicians.But,our time is near.!
(07 November 2011, 08:22AM) Complain about this comment
...greece must loose also some assets. let's ask the creditors to get back the military airplanes, submarines, tanks etc and give us a credit note.
(08 November 2011, 10:13PM) Complain about this comment
Please allow me to defend my country and myself... EU economists knew very good what the Greek system is since 30 years ago. Most of them enjoy some thousand euros salary and their job is to keep an eye on country economics. So why these gendlemen in suits and ties didn't ring a bell all these years and they start screaming to Greece ONLY when the dept reach non-payable limits? I know many people that don't have enough money to eat and yet, no politician of the last 30 years went in a single court for financial crimes. Greek people couldn't do nothing except protesting (that's where police comes with chemicals and batons to smash our heads). And so the rich is getting richier and the poor is getting poorer... Fair in a way, don't you agree?
(08 November 2011, 10:57PM) Complain about this comment
That also sounds familiar - the rich are getting richer and the poor are getting poorer. The 1% are getting richer at the expense of the 99%.In which way is this fair? It is the product of 'legalised' corruption, it is causing great discontent; it is probably leading towards a massive Revolution in (at least) the 'West'.Well, the World needs a good shake-up from its zombie-like complacency; if the 1% reap what they sow, I suppose it'll have been fair enough!
(11 November 2011, 01:48AM) Complain about this comment
Uplifting title, I have to admit!Unfortunately, Greece has been occupied by the bankers and their "products" long time ago. What happens today, has also been predetermined and we can see it on a global scale. The markets are ruling and not our elected PMs. The referendum was proposed at the wrong time, instead they should have brought it before the involvement of IMF. There's no real value for the Greeks to decide now, it is like, asking someone if he wants to die from a knife or a pistol! We got "screwed" already dear Merryn.
(13 November 2011, 04:36PM) Complain about this comment
Greece is the most powerful country because is or can be the first in the world in many many categories. Energy (by sun, wind, gas, oil etc), tourism, navy, agricultural, fruits, meat, islands, gold, aluminum. Greece is the country between Europe, Asia and Africa. Here in Greece there is no hurricanes, sharks, serial killers, high or low temperatures. There is no university or organization or firm in the world without a Greek. Greeks are everywhere. Greece is the most beautiful country and is the center of the world.
(13 November 2011, 06:52PM) Complain about this comment
Germany will never go down, because they are intelligent enough to produce things that no one else can manufacture. I am talking about high precision machinery and automobile industry. The streets in my Ukrainian city of Dnipropetrovsk are full of Porsches Cayenne and Volkswagens Passat. This is something that neither we, nor the Chinese cannot create. Nowever, our Feta cheese is not from Greece. It is fake - some Ukrainian variety. And it is not bad! We also have wonderfull beaches not only down there in the Crimea, but right in center of my city (not as good as in Greece though). Saying this, I just don't understand why the country that was poorer than Ukraine in the eighties is now nearly as prosperous as Germany in terms of salaries? Let them just earn as much as they deserve. Let the justice rule the world!
(13 November 2011, 07:52PM) Complain about this comment
Let the justice rule the world! Yes ... rather than the corruption!Too much to expect? Doesn't say much for human nature, does it?
(11 February 2012, 09:10AM) Complain about this comment
You know you can change the destiny of a nation? Free download of three volumes of rare book- www.tarvijerasti.blog.com
Name This will be the name displayed with your comment.
Email This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.
Comment Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.
To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.
Enter the text from the box above
Remember my details
By leaving a comment you accept our terms and conditions.
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.Sign up FREE to Money Morning here.
22 May 12
21 May 12
Become a smarter investor in just 3 minutes a day.
MoneyWeek is not responsible for the content of external internet sites.