Monday, July 13, 2015

Today's Links

Today's Quote: "The big thing I don't see addressed in the current deal, is how do they reopen the banks. The banks are closed in Greece today, you can't take out more han 60 euros a day, and you can't buy stuff internationally. The minute they reopen the banks, I would guess, every Greek person who can will drain every cent they can out of those accounts. and no one is talking about where that money is going to come from. Until they reopen the banks, the economy's going to crater. That's the one big part of this deal that no one is talking about, and they have to do something about it within hours if they don't want the economy to crater." John Cochrane, Univ of Chicago Business School

1--German Exit or Grexit? German Hegemony Needs to End Portuguese Newspaper

According to him, Germany’s hegemony is one of the main factors of the current crisis in Greece and in the EU as a whole. Germany has been imposing its preferences on the rest of Europe. However, instead of bringing stability, the German approach has contributed to the crisis and created an essentially unstable situation.

2--Pentagon on the Warpath: Does Russia Indeed Pose a Threat to US?

3---To save its crumbling economy, Greece was forced to hand over its public assets to an external fund controlled by a German bank, managed by Herr Wolfgang Schaeuble himself

Greece and its international creditors reached an agreement after long negotiations over the past weekend. The cash-strapped Mediterranean nation will now receive a €95-billion bailout over the next three years in exchange for quite harsh economic reforms.

However, the deal didn't come as easily for Greece. German Finance Minister Wolfgang Schaeuble proposed that as much as €50-billion of Greek public assets must be transferred to an external fund and privatized over time.

Essentially, this means Greece must hand over its public assets worth €50-billion — to the German-government owned fund to be sold by the Germans.
The fund is called the Institution for Growth and controlled by the German bank KfW, a German government-owned development bank based out of Frankfurt. Now this is where things get awkward: the current Chairman of the Institution for Growth is none other than Schaeuble himself.

4--Seeing green: Washington rakes in revenue from marijuana taxes

5--Tsipras caves

6--Treaty of Versailles  Worse than Versailles

Of the many provisions in the treaty, one of the most important and controversial required "Germany [to] accept the responsibility of Germany and her allies for causing all the loss and damage" during the war (the other members of the Central Powers signed treaties containing similar articles). This article, Article 231, later became known as the War Guilt clause. The treaty forced Germany to disarm, make substantial territorial concessions, and pay reparations to certain countries that had formed the Entente powers. In 1921 the total cost of these reparations was assessed at 132 billion Marks (then $31.4 billion or £6.6 billion, roughly equivalent to US $442 billion or UK £284 billion in 2015). At the time economists, notably John Maynard Keynes, predicted that the treaty was too harsh — a "Carthaginian peace", and said the reparations figure was excessive and counter-productive, views that, since then, have been the subject of ongoing debate by historians and economists from several countries

7---Was this humiliation of Greeks really necessary?

8--Germany showing 'lack of solidarity' over Greece: Stiglitz

9--Dr Schäuble’s Plan for Europe: Do Europeans approve? – Article to appear in Die Zeit on Thursday 16th July 2015

10--The Euro – A Fatal Conceit

Imagine that the euro had never been introduced and we instead had had freely floating European currencies and each country would have been free to choose their own monetary policy and fiscal policy.
Some countries would have been doing well; others would have been doing bad, but do you seriously think that we would had a crisis as deep as what we have seen over the past seven years in Europe?
Do you think Greek GDP would have dropped 30%?
Do you think Finland would have seen a bigger accumulated drop in GDP than during the Great Depression and during the banking crisis of 1990s?
Do you think that European taxpayers would have had to pour billions of euros into bailing out Southern European and Eastern European governments? And German and French banks!
Do you think that Europe would have been as disunited as we are seeing it now?
Do you think we would have seen the kind of hostilities among European nations as we are seeing now?
Do you think we would have seen the rise of political parties like Golden Dawn and Syriza in Greece or Podemos in Spain?
Do you think anti-immigrant sentiment and protectionist ideas would have been rising across Europe to the extent it has?
Do you think that the European banking sector would have been quasi paralyzed for seven years?
And most importantly do you think we would have had 23 million unemployed Europeans?
The answer to all of these questions is NO!
We would have been much better off without the euro. The euro is a major economic, financial, political and social fiasco 

11--Greece wins euro debt deal – but democracy is the loser - See more at:

12--Killing the euro project Krugman

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