Skip to main content

Think of the Greek parliamentarian’s dilemma

At 9 PM (GMT) the Greek parliament will vote on confidence vote with regards to the government’s proposed austerity economic strategy. The question is how will the opposition vote?

Greece’s problem is that the current administration discovered that public finance were a mess, far worse than anticipated. In fact, they discovered that total debt was three times higher than had been previously revealed. The prime minister tried to form a national unity collation, the opposition would have none of this (why share the blame). Now the opposition has three choices: Support, reject or abstain. My guess is that they will be blamed even if they abstain – since the government would win the confidence vote. So they will have to choose between elections -- maybe taking power and having to solve the mess themselves or support the current administration, and let them suffer the eventual electoral backlash. Difficult calculations if you “believe” that more debt is the solution (in my opinion it is not), but easier if you believe that the ECB/IMF have only kicked the can down the road with the hope that an eventual pain free solution emerge.

Once you believe that the solution lays in negotiating with the ECB/IMF a new deal (including hair cuts for foreign private creditors) then Greece has a chance to make it! Clearly remaining in the Euro area is out of the question. Transition out of the Euro is complex but not impossible.

The solution will not please the ECB, but then, everyone knew that Greece was faking the stats when it joined the Euro – and yet no one said anything!

My gut feeling is that the opposition will support the government, because the next 8 to 12 months are going to be horrible for anyone in power. Might as well be the other guy! I was wrong, eventually the vote was down to party lines.  The opposition decided that they had nothing to gain in supporting the government.

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b) ground beef requires process
Post a Comment
Read more

21st century milk parlour

When we first looked at building our farm in 2018, we made a few money-saving decisions, the most important is that we purchased our milk herd from a retiring farmer and we also purchased his milking parlour equipment.  It was the right decision at the time.  The equipment dates from around 2004/05 and was perfectly serviceable, our installers replaced some tubing but otherwise, the milking parlour was in good shape.  It is a mature technology. Now, we are building a brand new milk parlour because our milking cows are moving from the old farm to the new farm.  So we are looking at brand new equipment this time because, after 20 years of daily service, the old cattle parlour's systems need to be replaced.  Fear not it will not be destroyed instead good chunks will end up on Facebook's marketplace and be sold to other farmers for spare parts or expansion of their current systems. All our cattle are chipped, nothing unusual there, we have sensors throughout the farm, and our milki
Post a Comment
Read more

So we sold surplus electricity one time last summer...(Update)

I guess that we will be buying an additional tank for our methane after all.   Over the past few months, we've had several electricity utilities/distributors which operate in our region come to the farm to "inspect our power plant facilities, to ensure they conform to their requirements".  This is entirely my fault.  Last summer we were accumulating too much methane for our tankage capacity, and so instead of selling the excess gas, that would have cost us some money, we (and I mean me) decided to produce excess electricity and sell it to the grid.  Because of all the rules and regulations, we had to specify our overall capacity and timing for the sale of electricity (our capacity is almost 200 Kw) which is a lot but more importantly, it's available 24/7, because it's gas powered.  It should be noted that the two generators are large because we burn methane and smaller generators are difficult to adapt to burn unconventional gas, plus they are advanced and can &qu
Post a Comment
Read more