Observations on a possible Grexit

After two weeks of a new government in Greece, a Greek exit from the Euro (termed a ‘Grexit’) looks more and more likely. The betting markets give it about 30% to happen this year, and Greece is the out and out market favourite to exit the Euro before any other country.

Though I have not followed it super-closely the last 2 years, I have some observations to offer:

  1. Greek politicians are very used to being in the situation of owing other countries money and negotiating more favourable terms. In a way, their hand is the easy one to play as they can credibly claim not to be able to pay back the debts and then offer to promise to pay back something, with the alternative being open bankruptcy for which they would then blame the lenders. If the lender is owed enough money, the lender often reluctantly plays along in the hope of getting something back. This strategy has worked well for the previous Greek governments, which have quite successfully in the last 7 years gotten 3 bailouts, and the current government should be favourite again in the current situation to come out with an even better deal than before.
  2. The political imperative to pretend that Greece will pay back its loans is diminishing on both sides of the loan relation because of increased concentration of debts. The Greek state now directly owes the rest of the EU in that 80% of its debt is mainly to tax-payer owned entities outside of Greece (EU governments, the ECB, the IMF, etc.). This puts Greece into a great position to get a better deal as the Greek state has taken over many of the debts owed by Greek banks (meaning bank collapses are less of a worry), and European tax-payer institutions can rationally hope to simply have the ECB print the equivalent amount of money that they would have to write off as lost Greek debts. This printing-to-cover-debts is already starting to happen as the ECB has announced it wants to buy up government bonds, effectively a form of money printing for governments. For Greece, this means that an official bankruptcy would save the Greek state close to 150% of GDP in terms of liabilities, without the Greek banks being as exposed as in 2007 (Greek banks owe the ECB around 75 billion euro in fairly low-interest loans).
  3. Previous Greek governments have successfully sabotaged many reforms they agreed to. Continue reading

Lost the party leadership? Consider yourself lucky …

Amidst all the depressing events of last week’s failed leadership coup in the Northern Territory, there was at least one redeeming feature, at least for constitutional lawyers. Adam Giles’ refusal to resign as Chief Minister, despite losing the confidence of the majority of his party room (albeit in a dodgy unofficial meeting), gave rise momentarily to an occasion for exercise of the Administrator’s reserve powers.

Chief Minister “elect” Willem Westra van Holthe asserted to the assembled media at Government House that Giles’ refusal to sign a resignation letter was just a momentary glitch in his plans to be sworn in as the new Chief Minister by Administrator John Hardie.  They would simply need to prepare an “instrument of termination” for the Administrator to sign.

Unfortunately for van Holthe and his majority coup plotters, the Administrator didn’t agree. He indicated (no doubt after consulting the Solicitor-General) that it was a matter for the Legislative Assembly. In the circumstances that existed last week, that was clearly the case. The conventions of responsible government indicate that an Administrator/Governor should only exercise his reserve powers by dismissing a Chief Minister/Premier/Prime Minister contrary to the incumbent’s advice and appointing a successor in his or her place if it is completely clear that the incumbent has lost the confidence of Parliament and that the claimed successor now enjoys that confidence. Usually that will require the contenders’ numbers to be tested on the floor of Parliament. However, what happens if the claimed successor is able to produce clear written evidence that he/she now enjoys the support of a majority of members of Parliament? Wouldn’t that be sufficient justification for exercise of the reserve powers?

Of course that wasn’t the situation in the Northern Territory last week. Van Holthe had the support of only nine out of the 25 members of the Legislative Assembly i.e. a clear majority of the governing party but not of the Parliament itself. Accordingly, there is no doubt that the Administrator was correct in his interpretation of reserve powers. The only way to resolve the situation was for the contenders to test their support on the floor of the Assembly.  The Administrator no doubt would have exercised his reserve power to recall the Legislative Assembly urgently had the CLP Parliamentary Wing not resolved its leadership dispute (in however bizarre manner) a few hours later.

But what if the situation had been that Giles was refusing to resign but it was clear that the other 13 government MLAs supported the claimed successor van Holthe?  Could the Administrator properly have terminated Giles’ commission and appointed van Holthe without a Parliamentary motion of no confidence? It appears that the question has arisen in several Commonwealth nations with a Westminster system, including Malaysia, India and Fiji. However, the most entertaining example of such a situation is one that occurred in Nigeria. It suggests that the Queen and her advisers do not necessarily regard a no-confidence motion as being an essential requirement for dismissal. The story is recounted by prominent constitutional law academic Anne Twomey:

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Yanis Varoufakis travels economy class

Embedded image permalinkI’ve occasionally raised the issue of the class people travel on planes on this blog – and business class as conspicuous consumption. Anyway, I have just been made aware that Yanis Varoufakis’s shuttle diplomacy is being done economy class. Good on him. (I’m naturally disposed to give him a weekend with the Troppo Mercedes, but, apart from the irony fuse blowing on the Troppo dashboard at the mention of the Mercedes and Varoufakis, winners of this honour always travel first class to take possession of the vehicle – in this case fresh from the Kazakstan panelbeaters - so Rooter the hotted up FJ is being made available – Yanis is a former New Australian in any event, so he will almost certainly be more simpatico with Rooter that with the Merc. But I digress.)

Others in the politicians’ hall of honour include Barnaby Joyce, [an incredulous reader draws my attention to this story which rather undercuts Barbaby's economy credentials] John Hewson (as I recall at least during the 1993 election – in which he also took taxis rather than Commonwealth Cars) and Peter Walsh. There are no doubt lots of others – including me – flying economy when they’re entitled to business. This is the place to mention them. It’s also a place where we can note that that apostle of poverty, chastity and obedience, Cardinal George Pell, travels first class.

 

The Imitation Game: See it if you can (And Keira Knightly is a bit of a dud)

I saw The Imitation Game last night and enjoyed it very much. Engaging and really well paced. Go see it if you can.

Keira Knightley was a disappointment. Her fate is a little like Helena Bonham Carter’s. Spectacular looking Young Thing HBC ended up parlaying her prim young ingénue routine in Lady Jane Grey and A Room with a View into prim older thing as the Queen Mum in The King’s Speech and endless baddies and weirdos all played in a similar way – for instance as Mrs Havisham in Great Expectations. As far as I could see she played pretty much the same character in Harry Potter and Les Miserables.

Keira’s problem is similar but somewhat different. She isn’t typecast by casting agents. She gets lots of different roles requiring a much wider range. But her most distinguishing physical feature, a certain aspect of her mouth and cheeks now seems to dominate everything she does like Louis Vuitton logos on Louis Vuitton luggage. She wasn’t much chop in this movie.

Suspend NT self-government!*

*First published as “Abolish NT self-government”.  Last section now significantly rewritten.

Political chaos continues in the Northern Territory in the wake of last Monday’s failed leadership coup against incumbent Chief Minister Adam Giles. Today’s Northern Territory News reports that Giles, who earlier in the week demoted the plotters’ number cruncher, Health Minister Robyn Lambley, to the backbench in an early act of vengeance, is now about to do likewise to Alice Springs MLA Matt Conlan.

Giles is also reported to be about to remove former CLP Chief Ministers Terry Mills and Denis Burke from lucrative government sinecures, apparently as punishment for suspected sympathy for the plotters or perhaps just suspected lack of sympathy for Giles. Controversial CLP fundraiser Graeme Lewis is also rumoured to be about to be sacked from government positions including chairman of the Darwin Waterfront Corporation. I can’t help thinking that the latter looks like a courageous decision in a Sir Humphrey Appleby sense. As long-time chairperson of the CLP slush fund Foundation 51 (currently under investigation by the Electoral Commissioner), Lewis undoubtedly knows where a lot of bodies are buried, in fact he probably buried a lot of them himself. He certainly didn’t look even slightly worried as I had coffee at the table next to him in the Fannie Bay Cool Spot this morning.

This morning’s NT News story also neatly summarises the essence of the appalling conduct by Giles and his supporters which has led us to the current situation of grossly dysfunctional governance, in which the Chief Minister is gleefully wreaking vengeance on a significant number of his party colleagues because they dared to support the majority of government MLAs who have completely lost confidence in Giles’ leadership ability:

Giles retained his leadership despite not holding a vote of the caucus. It was a matter of holding on at all costs, rather than reaching a party room consensus.

Giles ultimately called the plotters’ bluff by threatening to burn the house down.

Westra van Holthe was not able to gain the 13 votes needed to demonstrate the confidence of the Parliament. And if the party didn’t return to Giles, he’d have no choice but to force the rabble to the slaughterhouse of an early election.

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Crikey, it’s on!

Well folks, you heard the news late last week. The Troppo Crikey Subscription is on again.

I’ve negotiated a rock bottom deal for Troppodillians. Again. Frankly the people at PrivateMedia never had a chance. But this year it was embarrassing. In fact they rolled over and instead of requiring me to send them your names and emails etc, just gave me this link for you to use.

Go there. Go there NOW and sign up with the proceeds going to the invasion of a small foreign country you’ll get a say in deciding on! The 25th, 50th and 75th subscribers will get a weekend away with the Troppo Mercedes Sports when we get it back from the panel beaters in Kazakhstan.

This offer won’t last!

Opposition to Government Strategy 101 (OGS101)

NB This post makes extensive use of the footnote plugin.  The footnote numbers are very small, but they are hyperlinks so you can jump to them by clicking.

NBB The fact that I argue below that a major reason for the demise of the Newman government was the standard template opposition strategy that I outline/discuss does not mean that I personally approve of LNP policies or performance (or those of Tony Abbott for that matter).  In fact I think the LNP richly deserved to be booted out (anti-bike laws, politicisation of judiciary etc).  However, I don’t think the ALP would have gone within a bull’s roar of winning in the absence of OGS101, nor is it obvious to me that Labor will be a significantly better government.  After all, they’re not even promising to repeal the VLAD (anti-bikie) laws, just to “review” them (in itself a classic example of OGS101 in operation).

Yesterday’s seeming electoral triumph of Annastacia Palaszczuk’s Labor rump in Queensland after a single term of LNP government underlines the extent to which the secrets of successful continuous campaigning for an Opposition party have come to be reduced to an almost foolproof formula that almost guarantees successful undermining of all but the most wily or dead lucky incumbent government, even by a telephone booth-sized Opposition with very little visible talent or experience.

The formula largely accounts for the results of the last 3 federal elections and at least the last 2 Victorian and Queensland state elections. It is found in a political spin doctor’s playbook called Opposition to Government Strategy 101 (OGS101).  The formula is well known to spin doctors on both sides of politics but has been kept secret from the general public until now.  Fortunately I have now obtained a leaked copy and reproduce the Executive Summary over the fold:

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Vox pop journalism as a system of domination: Syriza edition

When the French and Russian Revolutions occurred, the existing order asserted itself through the intervention of foreign nations. Recognising this, and decrying it is not to endorse either revolution, but to note how powerful and self-reinforcing systems of domination are.

A much more trivial example is the minority government that emerged in Australia in 2010. I thought some of the things that occurred offered excellent opportunities to do some worthwhile resetting – of our parliamentary procedure for instance. They offered the prospect of restoring to Question Time some semblance of democratic utility. But somehow the surrounding forces that had produced the old equilibrium managed to wrest the same result from the procedures introduced by the new parliament.

This interview with Australian Greek Yanis Varoufakis shows us our bankrupt institution of vox pop journalism as a similar system of domination. The most basic cause of the simplistic bombast one sees in this interview is that it sells – it arouses emotions (which are the engine of engagement well ahead of reason) and it keeps things simple and personal. It’s Greece versus the Troika. Varoufakis verses Merkel. It’s ultimatums, struggle. Someone wins. Someone loses. It’s responsibility and fiscal conservatism versus naïve utopianism etc etc. Never imagine that some new kind of meaning might be forged in an exchange of views – the only task is that of fitting the interviewee – however reluctantly, however invidiously, into one of numerous pre-ordained pigeonholes.

In this interview with ‘broadsheet’ journalist of some intelligence and, one imagines repute – one who would imagine herself as a thoughtful, well briefed journalist not overly simplifying or sensationalising – Yanis Varoufakis tries to explain himself. He seems very lucid to me. But his attempt to put his case is constantly frustrated by the interviewers’ resolute instance on not listening to him and seeking to engage with him on his points – or to simply allow him to get his message across. Of course a good interviewer will help shape the conversation, but she’s going to dominate it. He’s going to have to answer her questions.

What’s the ultimatum? Will he deal with the Troika, etc et. Now in some circumstances this makes some sense. When the interviewee’s technique is built around obfuscation, some gotcha questions or insistence on ’yes’ or ‘no’ may be in order. Here Varoufakis is trying to explain a whole different way of seeing things (which it isn’t my purpose here to defend). My point is that he isn’t obfuscating. He’s seeking to explain himself – which he does with great clarity and according to the rules of journalism and political communication which is to say, he keeps things simple and illustrates with examples. So he asks the interviewer if she’d recommend that someone took the help of a friend if the friend was offering to lend them money to pay interest on a debt they couldn’t repay.

Anyway the interview goes on – Varoufakis is remarkably calm and lucid throughout. He does get angry, but it doesn’t contaminate the mood of the interview as it would if I were in his position. And the incomprehension just rolls on. How sad. How unfortunate that whole professions can manage to arrive at a modus operandi so antithetical to achieving what they would regard as their objectives. Still, journalists wouldn’t be the only profession in that position would they?

The interview of the blogpost: 

Crikey Subscription

Yes folks it’s on again.

The Annual Crikey Group Subscription. It’s from this modest beginning that we funded Troppo’s now world renowned garage of vehicles from the famed “Dave Sorenson” Mercedes Benz Sports which seems to spend more time at the panel beaters than on the road but which Troppodillians have always flown first class to join, to Rooter, the Troppo FJ hot rod which seems to have been making an appearance Campbell Newman’s electorate in Brisbane this week. Where will it be seen next week when further details of the subscription will emerge?

Don’t email me yet, I just thought you’d want to know.