How the Greek elections will impact the world economy
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It's difficult to overstate the importance of the January elections in Greece. Greek voters may not know it, but they're likely deciding the fate of the Euro, and one could argue the fate of the world economy. AEI Resident Fellow Desmond Lachman explains why. Watch other AEI Top Three videos http://www.youtube.com/playlist?list=PLytTJqkSQqtpjJRT8maxoKYO0PnudrGK9 Subscribe to AEI's YouTube Channel https://www.youtube.com/user/AEIVideos?sub_confirmation=1 Like us on Facebook https://www.facebook.com/AEIonline Follow us on Twitter https://twitter.com/AEI For more Information http://www.aei.org Music "Biology Slides" by Bleak House (http://www.keshco.co.uk/bleakhouse) Transcript It's difficult to overstate the importance of the January elections in Greece. Greek voters might not know it, but they’re likely deciding the fate of the Euro, and one could argue the fate of the world economy. The January elections in Greece will likely result in radical overhaul of its economic policy. The new government will be headed by the Syriza Party, which is a party on the far-left of the Greek political spectrum. If you look into its history you can’t miss its roots in the Communist Party. Over the past year, Syriza has campaigned on the platform of abandoning the budget austerity policies imposed on Greece by the IMF and the European Union. Instead Syriza is proposing a big boost in social spending and an increase in the minimum wage in an attempt to boost Greece’s very depressed economy. In addition, Syriza will be seeking major debt relief from its official creditors. All of this is bound to put Greece on a collision course with Germany, the financial master of the Eurozone. Greece’s European partners have no interest in seeing Greece exit the Euro. This will make them predisposed to reaching a compromise on a new lending arrangement. However, there are limits on how much Greece’s European partners can compromise. For any concession that they make to Greece on debt and budget austerity, they would have to grant to counties like Ireland, Italy, and Portugal. But Syriza will also have major problems in reaching any compromise with debt-holding nations for fear of dividing its party and disappointing its base. This has to raise the real possibility that we’ll see Greece exiting the Euro before the end of the year. What would a Greek exit from the Eurozone mean for the world economy? A Greek exit is bound to cause financial market contagion to the rest of the Eurozone, particularly for countries such as Italy, Portugal, and Ireland. A financial crisis in Europe would have a large impact on the United States because Europe still accounts for around 30 percent of world output and because Europe is very integrated in the global financial system. Much as the Lehman bankruptcy in 2008 turned out to be a global event, so too would be a full-blown European crisis. How the Greek elections will impact the world economy
Comments
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Das griechische Volk braucht keine neuen Kredite.
Griechenland braucht seine eigene Währung und es bedarf an Investitionen in der praktischen Wirtschaft.
Eine neue Sparauflage würde die griechische Gesellschaft endgültig zu Grunde richten und eine noch tiefere Spaltung zwischen unseren Völkern hervorrufen.
Als Bundestagsabgeordnete liegt es jedoch in Ihren Händen, dies abzuwenden.
Sollten sie es der Kanzlerin Frau Merkel durchgehen lassen, Griechenland neue Spardiktate aufzuerlegen, würden zwar der Zahlungsverzug an die Glaubiger verhindert werden, aber die griechische Wirtschaft würde einbrechen, da neue fällige Zahlungen an die internationalen Gläubiger anstünden.
Sollten Sie sich dessen nicht bewusst sein, weisen wir Sie darauf hin, dass Sie große Verluste einfahren werden, da das Geld Ihrer getätigten Kredite von einem bankrotten Staat nicht zurückgezahlt werden könnten.
Wir forden Sie auf, diese Gefahr umgehend abzuwenden und mit Ihrer Stimme die Zuspitzung der Krise abzuwenden. Wenn der Bundestag in dieser Hinsicht versagt, wird sich die Krise von einer wirtschaftlichen und politischen zu einer nationalen und geopolitischen Krise entwickeln.
Sollte von Ministerpräsident Tsipras ein neues Memorandum unterzeichnet werden, wird die griechische Gesellschaft dies nicht hinnehmen, 61% der Griechen wollen den Austritt aus der Eurozone.
Die Abwärtsspirale der Rezession gefährdet unsere nationale Existenz.
Ganz unabhängig von Tsipras‘ Entscheidung sollte Ihnen bewusst sein, dass es unmöglich sein wird, dies bei einer Gesellschaft durchzusetzen, welche sich gegen die Europäische Union auflehnt.
Wenn Sie das neue Sparpaket ablehnen, werden Sie Ihr Geld in Sicherheit bringen und einen Dominoeffekt der Rezession durch die Rückkehr zur Drachme verhindern.
Die Rückkehr zur nationalen Währung wird langfristig für beide Völker Vorteile bringen.
Ihr Votum kann einen weiteren traumatischen Konflikt unter unseren Völkern verhindern. -
The only way Greece can get out of their economic mess is to ask the powerful European economies, such as Germany to open factories or help them to develop their agricultural potential. That way Greece will be able to sell their products to the world and thus, be able to prosper... In other words ... the Zorba dance is over!
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If Greece cannot pay accordingly to previously negotiated conditions, it should leave the EU.
The root cause of the Greek crisis is not huge debt, but inefficient economy: low productivity, high corruption, lack of transparency in business dealings. Thus without structural reforms Greece cannot be competitive within the EU. It is not a new problem, but everyone in Greece preferred to ignore it as Greece entered the Euro zone. For the time being, the Greece government was able to hide those problems through borrowing more and more money using shady deals with some American financial firms, but then the bubble exploded.
Many people in Greece complain that conditions imposed by the Troika are too harsh, but conditions imposed on Latvia were even harsher. Nevertheless, Latvia started to recover relatively quickly, because the main problem for Latvia was huge debt. However, Greece has no way forward without deep structural reforms, and there is no political will for that in Greece. All political parties in Greece are mostly playing the blame game and making empty promises. So I do not see why the EU should spend more money on this theater of the absurd. -
thieving greek gypsy cunts
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Beggar thy neighbor countries are in no position to demand anything
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Atlas Shrugged is coming true: Europe is slowly going to hell
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EU is a dead end street.
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Greeks invented the democracy and then the corruption.
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I have aspergers and apparently it is a disorder. I cant be dumber then those who join the communist parties and national socialist parties.
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There's a couple of things wrong in this video. Let me point them out as a Greek.
Yes, SYRIZA has roots from the far left. But though the last 8-10 years it grew from a small party to be the Greek government. That's an increase from 5% to 35%. It got many non-left politicians on board. And the current government is formed in cooperation with 'Independent Greeks'. A party that is conservative right-winged. SYRIZA is left only historically, not theoretically. As stated correctly in the video leftist ideologies have a minimum effect on their policies.
SYRIZA has also stated that under no circumstances, will Greece be exiting the Eurozone. You can see headlines saying that everywhere, Greece exiting the eurozone always makes a good headline doesn't it? Well, be informed that this is far from the truth. Greeks didn't vote SYRIZA to exit the Euro, they did so because they were sick and tired of austerity measures. -
They do understand that the elections can and will bring the euro down. They dont care, dont YOU understand? Maybe if you lived in a country, where there wasnt any work, and all you did was sit arond all day, and have to pay taxes even when you dont have an income you would understand. I suggest you stfu you old piece of shit clown, trying to squeeze more money out of other countries for your piece of shit blood line. The greeks created the Government. They can chage w.e they want. Stop acting like you or where ever you come from created it.
I suggest you go live there for a year, then maybe you will understand what it feels like to have a masters/degree from a university, and its not even worth anything. Then well see how your character will change. -
commies ruining and dividing europe , whats new?
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or you know, it could force europe to get its head out of its arse and deal with the problem in a creative and constructive way, progressing into a proper union, returning to the democratic roots of the west, without having the north prosper while south is suffocating. Who knows we might even learn one day that the "markets" and the banks and profit isn't the end goal of life. Imagine that.
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I'm lucky because being an Englishman my country did not adopt the Euro because we still had some pride in our heritage and our own currency. And now look, the sterling is still strong and the Euro might collapse.
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Greece is a small nation with a modest GDP and little natural resources to leverage. Their exit from the EU would be problematic, but it wouldn't put the EU in danger, nor would it impact the global markets in any material way. Greece needs the EU more than the EU needs them. The EU's bigger issue will be England following their elections.
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Most people aren't aware how perilously close the global order is to imploding into chaos, and how inexorable it is. It's probably going to happen sometime this year. We're talking biblical upheaval. A nuclear WWIII is certain, and probably within the next 18 months, at the most. Events of the last many decades are finally coming to a head.
It's all about entropy. Life exists by leveraging the 2nd law of thermodynamics, to displace local entropy:
http://en.wikipedia.org/wiki/Entropy_(arrow_of_time)
In so doing, however, net entropy is increasing, globally (by "globally", I mean on a larger scale. But since we literally live on a globe, that also happens to mean the Earth). Eventually, there is a rebound effect, as all that displaced entropy rushes back in on us, and as we spread out, encroaching on it, all the while generating still more entropy as we go.
Modern civilization has leveraged the 2nd law of thermodynamics to displace local entropy at an unprecedented rate. And now finally it's catching up with us in the way I stated, above. This is not something that can be escaped. Entropy is an undeniable force of nature that can only, at best, be forestalled, by displacing it in space and time (in the manner I mentioned above). Eventually, though, there is a reckoning, where we have to face all the entropy that we have built up, as a consequence of our activities of living.
That's what's happening right now. Mankind has this foolish belief that it is the master of its fate and of its environment. The reality is that it is subject to the universe, not the other way around. Humanity is about to get its ass handed to itself, and 'bitch slapped back to Africa". Humanity will soon know the terrible truth, and just how arrogant and foolish as a species it is... -
"Syriza's policies will put Greece on a collision course with Germany".
Talk about statements. That's one I'll never forget. Fucking hell, this quote is abhorrent to the extreme. -
That is one direction things could take. It could also be an enormous lesson in "what not to do" for the rest of the world. If you cannot be a shining example of how life should be lived, then the best thing you can do is be a glaring warning sign that others should avoid your same mistakes. Greece could be that glaring warning sign as they collapse.
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