Did green madness help create the Greek debt crisis?

green_money_windmills

Guest essay by Eric Worrall

The unfolding Greek financial crisis is front page news. The repercussions – bank runs, unsustainable debts, deadlocked creditors – could easily lead to major consequences worldwide. However misconceived the Euro currency was, its downfall will be painful on a global scale.

How much of Greece’s current economic problems were caused by the made Hellenic dash into renewable energy? The answer, unsurprisingly, is most likely quite a lot.

Greece, like many small European economies, has placed a substantial focus on green energy, seeing it as a quick leg up into the big league – an easy way to attract generous funding from rich green neighbours like Germany. On paper it must have seemed a fantastic opportunity – build green energy infrastructure, using a mixture of easy finance and generous grants from Germany and other rich green neighbours, then sit back and profit from selling carbon credits, on the pan-European, or even a global carbon market.

The promised European carbon market never really manifested, thanks mostly to an embarrassing oversupply of carbon credits – a surplus which was created through a combination of domestic overissuing of carbon credits, and through clever gaming of the defects in the Kyoto accord.

The consequences for Greece of this economic miscalculation have been nothing short of tragic. With money in short supply, Greece has been forced to retroactively roll back generous carbon credits, which has undoubtably bankrupted local investors, and which likely contributed to a sense that investing in Greece is unsafe.

I’m not suggesting all of Greece’s financial problems are due to Greece embracing the false promise of green wealth. But the massive misallocation of resources and domestic green wealth destruction can’t have helped. Greece now stands on the brink of defaulting on a $1.73 billion IMF payment – a payment which Greece might have been able to afford, had they not been lured into squandering billions of Euros of borrowed money, on the empty renewable energy pipe dream.

152 thoughts on “Did green madness help create the Greek debt crisis?

  1. In which case, we have at last something to be grateful for from the green blob.

  2. The troubles is Greece are certainly far deeper than losses attributed to indulgence in green energy. However, the emotional/socialist mindset that enables attraction to green energy without consideration of practice and cost is the same for a broader catalog of fiscal ills in Greece, and here. Greens, socialists, big government anti-capitalist, have no sense of money. They just don’t.
    In as much as Solyndra is a poster child for solar energy flops, Greece could well be a poster child for neo-socialism flop. The connection to the greens is easy. The greens ARE the socialists. The correlation is 95%. A green/socialist bureaucrat doesn’t swap out his brain when acting for wealth redistribution one moment and wind power the next. CAGW is a fiscal scheme.
    I therefore vote for painting Greece’s green policies as the main cause for the fiscal collapse.
    Good connection Eric.

    • While I struggle to understand the SCOTUS decision regarding “King”, Roberts stepped up to the place on the EPA ruling and summarily slapped this Eco-nomic mindset to the turf. SCOTUS affirmed that “reasonable” included basic finance vs. limitless reshaping the world green spending.

      • FTOP,
        Yes inside the chaos is an accidental and occasional element of fiscal responsibility.

      • And yet…EPA will reissue the rule with its cost/benefit analysis showing many lives saved at a great value per each. Their “lives saved” approach is a humdinger.

      • The SCOTUS ruling does cause problems for limiting CO2, as temperature rise under 2C is generally regarded as net positive and US emissions alone cannot raise US temperatures anywhere near 2C.
        To have meaningful effect, EPA regulations on CO2 would have to apply to China and India. Otherwise it will be hard to argue it is worth trillions of $$ to stop 0.1 C warming.
        Life saved is an interesting metric. Will the EPA regulations make us immortal, or simply prolong life? If you prolong the life of a pensioner, doesn’t this actually cost the country money? Does retiring to Florida from Minnesota kill pensioners? How about if you retire from Florida to Minnesota?
        It seems highly unlikely that 0.1 C warming is dangerous. Otherwise, we better start recalling household thermostats, as they are nowhere near accurate to 0.1C. People should be dropping like flies from indoor climate change that results from your furnace and air-con cycling.

    • The left will NEVER admit their mistakes (see: Detroit). They usually just double-down on their failed policies (see: Baltimore). Perversely, they can also never claim victory, because without problems (often manufactured) that fuel their sense of injustice and need for your money to change things, they have no reason for being.
      You’re absolutely right about their sense of money. I have worked very hard to get my kids to understand that just because your really, really want something very, very badly, that doesn’t mean there is money to do it. Socialists have never learned that lesson.

    • This text excerpt from this excellent post, might benefit from an examination of the modern Greek psyche or “work ethic” (serious pun intended);
      “I’m not suggesting all of Greece’s financial problems are due to Greece embracing the false promise of green wealth”
      For decades, the Greek attitude is “the rest of Europe is rich, we gave them their democracy, the Olympic games, they like to vacation in Greece so why not let them pay for all our country?
      If we can go down the green handout route, it will allow us to keep bludging off them as long as we can keep playing the “pity us poor Greeks” card.
      When did you last hear a Greek spokesman admit it is all of their own doing? Rampant laziness, being granted no-effort required government jobs and blaming immigrants who are prepared to work for most of their woes.
      Hellas, You damn well know the green CAGW argument is nonsense, you made your modern problems, you fix them

    • Yup sounds about right and the socialist ( I think they are left of that) shuts how was up and running well before the euro kicked the bankrupt can down the road but the liberal elite made a mint first!

  3. “Greece now stands on the brink of defaulting on a $1.73 billion IMF payment ” Peanuts compared to what Puerto Rico owes, 72 BILLION. Oh, by the way that debt will be paid by ALL of the U.S. citizens people.

    • The $1.73 billion refers to the payment due today. Greece’s total debt exceeds $300 billion.

      • Ah Greece, the poorest country in the world with the wealthiest population.
        @ David Chappell – Probably can’t pay in carbon credits, but I suppose they could break away from the EU, readopt the drachma, and then print out as many little drachmas as will satisfy the loan and then pay it back in cash.
        Taking into consideration the new exchange rate… how long would it take to design and print a 100,000 billion drachma note, there’ll be a few of them.

      • Regarding the two above comments:
        Remember the movie “The Mouse That Roared”?
        Greece might drop out of the EU, then declare hostilities against the EU (or US), quickly surrender, then request foreign aid. At least that was the plan in the movie, but things did not quite work out that way.

    • Not yet. There are still the deposits of savers to steal. That is currently underway, and should result in some additional borrowing. The IMF does not mind how the funds are taken at gunpoint, after all, for the bailout is not of Greece or the Government of Greece; it is rather for the holders of bonds issued by the Government of Greece. After that, the Greek government will have run out of OPM, but we will first hear that the theft of deposits this week has saved the day.

      • Phases of Socialist Schemes:
        (1) Exultation.
        (2) Disenchantment.
        (3) Confusion.
        (4) Search for the Guilty.
        (5) Punishment for the Innocent.
        (6) Distinction for the Uninvolved.
        Greece is well into Phase (5).

      • It will be interesting if Greece introduces a new currency and then FORCES the Greek population to convert their Euros, followed by an inevitable devaluation. Getting paid a government pension is one thing but saving money in Euros for retirement only to see a forced conversion only because you left your money in a Greek bank – that is stealing.

      • If Greece does default on all $24 billion it owes to the Fund, that will dwarf previous delinquencies from countries like Sudan, Zimbabwe and Somalia.
        While the IMF was worried about contagion when it made the loans, it also had institutional incentives for wanting to bail out troubled countries, said Andrea Montanino, a former IMF board member who left the Fund in 2014 after participating in reviews of Greece’s second bailout in 2012.
        “The IMF is in a preferred creditor status; the more you lend, the more you earn,” said Montanino, now with the Atlantic Council.
        From interest and charges on the Greek program alone, the IMF has earned some $3.9 billion since 2010, according to figures on the IMF’s website.

        https://ca.news.yahoo.com/despite-lagardes-initial-reluctance-imf-hook-greece-223005193–business.html
        Good profit and all expenses paid by loaning other peoples money a great rate.
        Of course that be the same World Bank and IMF that has a 4 step plan for any nation to be taken over and stripped of assets.
        Step One is Privatization – which Stiglitz said could more accurately be called, ‘Briberization.’ Rather than object to the sell-offs of state industries, national leaders – using the World Bank’s demands to silence local critics – happily flogged their electricity and water companies at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billion off the sale price of national assets.
        Step Two Capital Market Liberalization. – Stiglitz calls this the “Hot Money” cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation’s reserves can drain in days, hours. And when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.
        Step Three: Market-Based Pricing w/ Step-Three-and-a-Half: what Stiglitz calls, “The IMF riot.” This economic arson has it’s bright side – for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices. A pattern emerges. There are lots of losers in this system but one clear winner: the Western banks and US Treasury, making the big bucks off this crazy new international capital churn.
        Step Four of what the IMF and World Bank call their “poverty reduction strategy” Free Trade. Taking a World Bank loan for a school ‘triggers’ a requirement to accept every ‘conditionality’ – they average 111 per nation – laid down by both the World Bank and IMF. In fact, said Stiglitz the IMF requires nations to accept trade policies more punitive than the official WTO rules.

        http://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
        or search – Greg Palast secret documents IMF’s and World Bank
        Writen in 2001 with examples of 1995 Russia, Bolivia, Ecuador, Indonesia, Ethiopia and Brazil. Greece is just the next in line. When does the food riot start?

      • I find it fascinating how so many people actually think that not having the govt own everything, is such an evil thing.

      • It’s because you cannot trust free market forces to do what’s best for the people – obviously. They will do what’s best for their shareholders, always. Water, rail and electricity should all be state-owned and controlled. Two are essential for life, and one is essential to have easy movement. Everything else should be left to the market. Leaving everything to private companies is NEVER going to bring you a stable, prosperous country that is socially responsible. Real Socialism could work, but it would be miserable. Real Capitalism could never work. The best we can achieve is Capitalism with social responsibility. We have seen, here in Britain, how disposal of the electricity network was a completely rotten idea. It has resulted in high fuel prices, a deep concern about future capacity, enormous subsidies, and a reliance on foreign companies to both supply power and build nuclear power stations! It’s farcical.

      • DD More
        I have not read in economics, the “dismal science”. Dismal it is, science it is not.
        Stiglitz’s claim to fame seems to be that he says that the eye that directs the unseen hand of the capitalist marketplace is actually extremely near-sighted. That eye does not see the larger picture therefore the free market is both inefficient and socially inept. (No social justice through Capitalism.)
        He then goes on to say that Government intervention is needed to alleviate the shortcoming of the free market. In other words, government trumps the free market. (I would say that he thinks that the truly blind leading the merely nearsighted is somehow an improvement.)
        He makes a number of glaring mistakes of which the most amusing is probably this. The mistakes of the free market are self-correcting. The mistakes of government are not. You have to change the government before you can get the government to change its economic policies. Socialists(Progressives) and Communists simply can’t admit to mistakes. In the early stages of their takeover criticism is ignored, later it is punished and in the last stage it is “eliminated”.
        The first priority of big government is control. As soon as it gets enough control — what wonders it will perform for the benefit of the people! Since it never has enough control its policies are always directed to gaining more control and it never produces “wonders”. In fact the people are soon considered to be a danger to the lofty ideals of the government. The people become “enemies of the state” whose very existence prevents the government from producing the “wonders” it promised them.
        So when you get right down to it Stiglitz’s entire spiel is a justification of government control of the economy. He believes in Capitalism so long as its “invisible hand” has been amputated by government.
        Capitalism produces great wealth for future generations. Socialism simply eats up its children’s patrimony.
        That is how I see it. But as I said I don’t read in economics.
        Eugene WR Gallun

      • Cooley, you can always trust govt to do whatever is best for politicians.
        The way companies do best for their shareholders is by providing products that customers want to buy at a price they can afford to pay. Govt on the other hand does best when it pits one class of citizens against all the others.
        Regardless, your argument applies equally well for food, housing, clothing, health care and pretty much anything else. So why stop with those three, especially considering what a lousy job govt has done providing the items you list, why do you assume that the private market will be worse?

      • Steve from Rockwood June 30, 2015 at 10:02 am
        “an inevitable devaluation” … of what, with respect to what?
        There is no need to convert drachma (or whatever) into anything else within Greece. If you want foreign travel, OK. I do not think there will be a market for drachma against anything, so how is it devalued?

      • Mark, you’re missing my point. Those three SHOULD be run by government for reasons of security and ease of movement. I tempted to say railways could be fully privatised (don’t forget they are heavily subsidised), but then private companies wouldn’t provide lines to remote locations without order – just as the Royal Mail’s post to remote locations has had to be laid down in law. Private companies are only interested in money, not people. THAT’S why private companies would be ‘worse’. Thanks to privatisation of the energy sector, we are now in the grotesque chaos that I described – paying foreign companies to run our electricity supplies, begging them to build nuclear power stations, AND setting in concrete a future price in order that they are handsomely paid for their infrastructure construction!!! Do you think electricity should be left to the free market? And water shouldn’t be for reasons of security. How far away are we from some serious Chinese hacking exercise to shut down our water supplies? Think it can’t happen? The one thing you can always be sure of is that you can’t be sure of anything!
        If an asteroid hit, and we had to start all over again, the first thing we would do is form ‘collectives’ of local government, not companies! That should tell you a lot, Mark. We would have to be sure of nurturing life, not profit. Governments, howsoever badly they behave, are still there for you. Yes, really. Oh, I know all about governments, what they get up to, and how they also become self-serving. But you know what, I’d still rather trust them than a board of directors – and my politics are to the right!

      • Gamecock, you are a genius. You showed in one post that you have no comprehension of politics. Capitalism with social responsibility is to the left, not to the right! But then, yiou don’t even know how to spell ‘Sieg’! Genius.

  4. According to EC figures both Spain and Greece were ahead of Germany on renewable energy for 2013 (with higher targets and/or closer to meeting their target). People who only read the news might not suspect that, as the RE-boosters never tire of promoting Germany and Denmark. As well as having more RE, Greece and Spain have far less of the nasty biomass (which dare not speak its name) than Germany. We know Germany spent hundreds of € billions worth. Greece and Spain must’ve too. http://europa.eu/rapid/press-release_IP-15-5180_en.htm

    • The difference, I think, is that Germany and the UK are more financially resilient than Greece or Spain. But, if this continues we shall go the same way.

  5. Green energy certainly didn’t help, but there are other, much larger factors at work. There are two very large ones in my view. The first one is capital investment. Greek workers may work much longer hours than most of the Eurozone, but their productivity is much lower and in all sectors from manufacturing to agriculture.
    The second large reason is tax evasion. The gray market in Greece amounts to nearly 26% of the total national economy, compared to about 15% in most OECD nations. Only Estonia, Latvia and Italy come close to Greece’s level of an underground economy. It’s estimated that about 30 billion Euros goes uncollected each year because of tax evasion.
    The argument by Eric regarding green energy contributing to Greece’s problems may have merit, but we will not know its significance until it and the other factors contributing to Greece’s economic collapse are quantified.

    • Excellent points.
      And don’t forget that the investment opportunities were stymied by interest rates set for the needs of German manufacturers rather than the periphery.
      This case may be correct.
      But it’s hard to see how it can be known.

    • Black market growth is an offshoot of socialism. The growing black market is the major cause of the socialist to totalitarian death spiral.

      • High taxes and high regulations always result in a large and growing black market.
        Basic human nature.

      • Tom T:
        You say

        Black market growth is an offshoot of socialism. The growing black market is the major cause of the socialist to totalitarian death spiral.

        Bollocks!
        Black market growth is an effect of corruption.
        And Greece recently elected a socialist government to cope with the financial disaster which was induced by the succession of previous right-of-center governments.
        The political right always seeks scapegoats for its failures and usually claims its disasters were induced by Jews and/or socialists. History records that in Europe
        when the far-right gained power they attempted to exterminate Jews and socialists whom they had scapegoated.
        Richard

      • richard: Not paying sky high taxes is corruption?
        Not following regulations designed to destroy your company while helping your competitors is corruption?
        I’m sorry, but you are the one carrying the bullocks, the corruption here is socialism itself.

      • BTW, I love the way you keep trying to blame socialism on the far right.
        The Nazis were socialists, the Greeks range from socialists to outright communists.
        Your desire to blame every ill in the world on rightists would be funny if it weren’t so predictable.

      • >>Richard
        >>Bollocks!
        >>Black market growth is an effect of corruption.
        Richard, you really have no idea how the world works, do you. Four decades after Scargill was trounced, you are still supporting the USSR fantasy-world. No wonder the British coal industry was destroyed, with such dinosaurs in charge.
        Since I was living in the USSR just after the Yeltsin coup, let me tell you what happened.
        a. There were price controls on everything, so nothing in the economy had a real price. A cheap ticket to the Bolshoi was about 2 cents.
        b. You were paid the same if you worked or sat chatting all day. So most people sat chatting.
        c. Point b. led to huge shortages of everything you can imagine.
        d. But point a. and b. together meant that everyone had enough money to buy anything and everything.
        e. So point d. meant that the shops were totally bare. (Shortages can manifest themselves in two ways – either high prices or empty shelves. The USSR chose the latter.)
        g. Since all the shops were empty, the only way you could get anything was on the black market.
        h. And saying that stopping the corruption would solve the problem in the USSR is the naive fantasy of a five-year old. The sort of fantasy that destroyed the British coal industry.
        Case in point – toothbrushes. 1,000 people want a toothbrush. Everyone has enough money for one, because the socialist price control says they must be 1 cent each. But only 100 are produced. The options are:
        a. Hold a lottery for who gets one.
        b. Form a queue at 04:00 to get one.
        c. Put the price up 100-fold, to a realistic price (but cannot do that in a socialist nirvana)
        d. The toothbrushes are all bought before they reach the shops, and are sold on a defacto capitalist black market at the true value they should have been sold at in the first place.
        Communist socialism is a bankrupt economic system that should have been disbanded a couple of thousand years ago. Central planning socialism has its benefits, like well-designed and laid out Roman cities, but leave the economy to capitalism.
        Ralph

      • Does richardscourtney consider libertarians and anarchists (the extreme Right in the US) to be akin, politically to National Socialists?
        Certainly The definition of Right-Wing to him is different than for myself, An American Libertarian.

      • Gentlemen the Third Reich was NOT socialist. Think about this The soviets produced 75,000 T-34s The USA cut back on Sherman production after the 60,000 mark. The germans? about 25,000 all types.
        We won’t even touch on aircraft production. The germans looted and destroyed much of the farming in the areas they gained control of and still couldn’t feed their people. The Soviets established 5,000 new farms just to feed their armies. The USA was the only nation to have it’s agriculture increase during the war. By almost 100%!
        The germans were totalitarians. Neither capitalists nor socialists They squandered all the ecomomic advantages that they started with and later gained.
        michael

      • Mike, socialism is by it’s nature a totalitarian system. It may start out otherwise, but with every failure to produce, it gathers more power to itself.

      • MarkW Examine further The numbers tell. How could the Soviets continue to wage war in a atmoshere of corruption? Socialism has built in inefficiencies. How did the Soviets produce tanks, airplanes, artillary and all the logistics needed to keep on fighting after the areas with the natural resourses had been captured? The Soviets had stock piled materials AND top to bottem organazation. Think, could we move All of our factories on the west coast back beyond the rockies in less than 90 days? In a socialist nation during crunch time, failure to preform is not the loss of stock options or dismissal with a golden parachute, but something rather more dramatic. I think you can guess the rest. Remember they were invaded. We were not. Both systems reacted well. As to which was better, it’s open to debate. Myself, I think we did better. But then no one was burning down our cities by job lots.
        michael

      • Mike the Morlock
        So if the economic efficiency of the Soviet Union was so great — today it should be the world’s economic powerhouse overshadowing all other nations — reducing the US to economic insignificance. It should be the model for all mankind. The shining beacon of humanity.
        It collapsed and no longer exists. Did you forget that? Cold war or no cold war, It had forty years after WWII to prove itself. Instead it slowly fell apart because a command economy my be able to move factories but it can’t make shoes. The things you have said are totally off the wall.
        Eugene WR Gallun

      • >>Mikewarlock
        >>Gentlemen the Third Reich was NOT socialist.
        Oh yes it was. Socialism is an economic model, it does not tell you how efficient or successful it will be.
        The difference is that Germany was Socialist, not Communist. The Germans had private housing, instead of the USSR’s state housing. There Germans had different pay scales, the USSR tried to have one for all jobs. (Didn’t work, but they tried.) etc: etc:
        But Germany was most definitely socialist, with grand subsidised socialist projects for the common working man.
        This was the common people’s hotel.
        http://www.dailymail.co.uk/travel/travel_news/article-3138815/Hilter-s-seaside-holiday-retreat-Nazis-opening-luxury-destination.html
        This was the common people’s cruise liner:
        https://en.wikipedia.org/wiki/MV_Wilhelm_Gustloff
        This was the common people’s car:
        https://en.wikipedia.org/wiki/Volkswagen_Beetle
        All socialist projects, through and through.
        Ralph

      • >>Mikewarlock
        >> Think, could we move All of our factories on the west
        >>coast back beyond the rockies in less than 90 days?
        Just think of an economic system that could build a huge cargo ship in less than 5 days. Wow that must be the most efficient economic system ever. So which utopian Communist nation achieved this? Ah, yes, America……
        http://www.usmm.org/peary.html
        R

      • I’ve read the relevant sections of the Manifesto of the National Socialist German Workers Party (NSDAP) in both English and German, and there is no doubt whatsoever that the Nazi Party was 100% Socialist. The term “right wing” is meaningless, a bit of leftist propagandistic folderol to try to disguise the essential sameness of Russian Socialism and Nazi Socialism.

    • “uncollected each year because of tax evasion”
      so what? This is an unregulated market, therefore it requires no governmental red tape, therefore it costs nothing to run, therefore it needs to pay no tax.
      Small Government, that’s the thing, let people get on and trade.

  6. To err is human; but to really [copulate] things all to hellangone, you need a government.
    As a pure and unalloyed fiat currency, the Euro was doomed the moment it was conceived. Such is true of all non-monetary “money.”
    In the words of Austrian School economist Ludwig von Mises:

    “Government is the only institution that can take a valuable commodity like paper, and make it worthless by applying ink.”

  7. The European’s wanted their dream but didn’t want the baggage, In a single currency the debts of one are the debts of all…… if you take away a sovereign country’s ability to print money and inflate their way out of this kind of trouble, you cannot then abandon them when they run out, Shame on the Germans.

    • The Germans have been using the hapless Greeks for two decades now. German politico want to keep them. Why? Deadbeat Greece is a drag on the Euro, keeping it low and therefore greatly enhancing the affordability of German exports. The German people are tired of it. Drunk trust fund baby is getting cut off. Euro will be stronger, German exports down.
      Greece should have punted long ago.The writing was on the wall.
      But if Spain goes down, there is a real problem.

      • Would not think Spain follows the steps of Greece. Its economy seems to have stabilized and there is even drive towards lower taxes and more agile economy, although there is much to do still. This is Europe after all. And talking of which. it almost looks like the US is only a decade behind Europe now in terms of ECO/Socialistic madness. How far away from a Greece-like default situation the US is I cannot say. But, as Thomas Sowell so succinctly summarise it: The US is subject to the same algebraic rules as Greece (but the rest of it is a discussion on another blog 🙂

      • The German people are tired of it, but it has actually been a cheap form of monetary control. Your first point is dead on…..a German mark on its own would have soared on monetary exchanges and slowed down the German export economy. Now the bill is due, and they want the Greek economic system to suddenly be a mini frugal Germany overnight. Split it up, let Greece become once again a cheap place to visit, let German goods reflect their true overpriced green energy costs, and the world will be a better place.

      • but wasnt it goldbags sux (or some other yankbank)that GOT greece into the EU by fiddlin figures to begin with???

  8. Other than olive oil and Retsina, try to think of a product produced and exported from this failed country.
    A part of the USA, Detroit, did not need the green thingy to achieve the same fate.

    • Tourism funds 16% of the gross domestic product, Agriculture contributes 3.8% of the country’s GDP and employs 12.4% of the country’s labor force. (cotton (183,800 tons), pistachios (8,000 tons), rice (229,500 tons), olives (147,500 tons),figs (11,000 tons), almonds (44,000 tons), tomatoes (1,400,000 tons), watermelons (578,400 tons), tobacco (22,000 tons)) Agriculture contributes 3.8% of the country’s GDP and employs 12.4% of the country’s labor force. The shipping industry accounts for 4.5% of GDP, employs about 160,000 people (4% of the workforce), and represents ⅓ of the country’s trade deficit.; paraphased from Wikipedia’s article on Greece,
      CIA’s World factbook lists wheat, corn, barley, sugar beets, olives, tomatoes, wine, tobacco, potatoes; beef, dairy products for Greece

    • Almost 40% of Greece’s exports is oil. Single largest export at 38.5% (by value).

  9. I know it’s easy to poke fun at the inanities of monetary union, but the meltdown has a very real impact for the people there. I mean Weimar republic, carefully built life savings becoming worthless. There isn’t a “nice” position on it.
    Sure, the Green thing was a factor but not the essential factor, everyone went down that rabbit hole before the financial crash. See it from the viewpoint of an elderly couple in their sixties and there aren’t many chuckles.
    Pointman

    • The Greek people voted for the socialists who created this problem.
      They are not exactly innocent bystanders.

      • MarkW:
        You write

        The Greek people voted for the socialists who created this problem.
        They are not exactly innocent bystanders.

        No. The Greek people voted for the right-of-center governments who created this problem and have recently elected a socialist government to cope with it.
        They are not exactly innocent bystanders. But their error was to have not voted for socialists until the disaster had happened.
        Richard

      • Only in Europe do they call socialists right wing.
        They weren’t full fledged communists, therefore they are part of the right wing.

      • What utter rot from Richard. Go here:
        https://en.wikipedia.org/wiki/Elections_in_Greece
        Scroll down to the list of governing parties since 1974. Just as many socialists as right wingers since the Colonels were booted out. In fact do kindly note that Socialist parties mostly ran the government from 1974 to 1990.
        Rampant deficit spending and a huge gray economy are hallmarks of Greece since their separation from the Ottomans in the early 19th C. They’ve gone bankrupt about four times.
        Stop trying to defend Socialism or its thuggish cousin Communism, Richard. They’re nothing more than state-sponsored theft.

  10. Will the Greeks finally learn from their own fables? How many eggs can be taken from the Golden Goose before there is no more goose?

  11. The MAIN reason Spain got into big problems was in fact “Green” energy projects. It is quite likely that this contributed in a big way to the Greek problem. I say let them all rot if they are so stupid to follow the AGW mantra.

    • No it wasn’t. It was a relatively minor factor compared with the impact of a currency overvalued for Spain’s economy and interest rates set far too low. The result was that Spain, Italy, Portugal and Greece were massively over-leveraged.

  12. Eric I agree with you about the lack of carbon credits being a minor issue in this total mess. With regard to tax fraud the Greeks have the perfect role model; the EU, they have not had their audited accountssigned off for longer than the planet has not warmed (over 19 years). They still insist though that the planet is warming and that an organisation who gives its employees tax free salaries and expenses, is not accountable, corrupt and totally not fit for purpose, is capable of running the lives of people from 26 different countries. Greece massaged its economic figures to join the Euro, the EU turned a blind eye in their quest to form a United States of Europe.
    Pot, kettle, black!
    When we have our referendum I will be voting to leave the EU, unless it changes to what I voted for in 1975, a free trade area!

    • All my freinds and family who live in the UK plan to vote to exit the EU. Lets hope voter apathy does not set in and people get out and vote. It’s a good thing Striling was kept!

      • That’s tough talk. How can EU survive without Greece and the United Kingdom?
        After a second thought, if it means EU ridding itself also of Syriza, Golden Dawn and Malthusian Royalty, I can just about live with that. Care to take away also Vatican with it’s Franciscan Pope from the Latin American part of Gaia? Then we can call it even. Surely NI, Scotland and Wales can also think for themselves.

  13. Ah, so when do the “bail ins” start?
    With a payback time of 3 years, any investment in solar energy is a spectacular return, although admittedly some investors could have been scammed whilst others made off with the loot.

  14. The green madness is just a symptom of the root ideological cause of their crisis. Massive Entitlements, corruption, can kicking, total lack of leadership, a deep socialist mantra, and on and on. Sound familiar?
    You think the US would learn from this, but noooooo. The U.S. is at $18,000,000,000+ in debt and climbing fast under the current POTUS. He will eclipse the total debt incurred by every president in history by the end of his term. He also ignores the warnings of the EU style system and continues the march toward the precipice.
    Total unfunded Liabilities of the US is approaching $100 TRILLION! (Unfunded!)
    Greece is a small blip on the radar, but an oracle in the end.
    Whats in your wallet? Real money, or a bunch of IOU’s?
    http://www.usdebtclock.org/

    • the only reason the USA gets away with that level of debt is because of the dollar. if the world shifted away from holding dollars into some other currency, then yes the USA is in deep trouble. the euro has no chance now. the asian market will be the future currency holders. America WILL end up having to pay down that debt one way or another.

      • We only owe $2.3 trillion to China and Japan. Most of the US debt is owed to ourselves.

      • Tom in Florida: It’s funny; I somehow didn’t receive my interest or principal payments for my share of this US debt owed to “ourselves.” I am guessing I am one of these “ourselves” though based on the meaning of that word. Perhaps “ourselves” is really someone else, and this claim is rather just a lie told by an indebted regime to the gullible?

      • .. But it can’t, there simply is not that much money!
        US Debt 18 Trillion
        Tax income from Fed,State and Direct is 6 Trillion
        Deficit is 0.5 Trillion per year
        So they would have to spend nothing for more than 3 years to pay off the Debt, that is NO state employee is paid for 3 years, no welfare, nothing on the military, nil, zip, nada.
        Let is say they can make a 20% saving (somehow) and not affect income.
        They now have 0.8 Trillion per year to pay Debt (they overspend by 0.5 Trillion remember, so they spend 5.2 Tr and take in 6 Tr leaving 0.8 Tr)
        So they pay it off in 22 years ( ah but the interest, bond %, is at least 5%)
        Interest (5%) on 18 Trillion is 0.9 Trillion
        So they pay nothing off and the Debt goes up by 0.1 Trillion.
        US debt is unpayable, the dollar is bust, almost always had been.

    • Obama managed to double the total debt several years ago. He’s going for a tripling before he leaves office.
      If the Greek contagion results in an major economic slowdown, he may manage to quadruple it before he’s done.

    • Ossqss – “”The U.S. is at $18,000,000,000+ in debt and climbing fast under the current POTUS.”
      Except for when it’s not. Can you say fraud accounting.
      (CNSNews.com) – The portion of the federal debt that is subject to a legal limit set by Congress closed Thursday, June 11, at $18,112,975,000,000, according to the latest Daily Treasury Statement, which was published at 4:00 p.m. on Friday.
      That, according to the Treasury’s statements, makes 90 straight days the debt subject to the limit has been frozen at $18,112,975,000,000.
      “Because Congress has not yet acted to raise the debt limit,” Lew said in his March 13 letter, “the Treasury Department will have to employ further extraordinary measures to continue to finance the government on a temporary basis. Therefore, beginning on March 16, I plan to declare a ‘debt issuance suspension period’ with respect to investment of the Civil Service Retirement and Disability Fund and also suspend the daily reinvestment of Treasury securities held by the Government Securities Investment Fund and the Federal Employees’ Retirement System Thrift Savings Plan.”
      Lew noted that these same actions had been taken “during previous debt limit impasses.”

  15. There are four aspects to the law of wealth: wealth is created, maintained, destroyed (dissipated) and finally, each of those aspects must be in balance. The Greeks will suffer until they learn obedience to the law and so will others, according to their level of predation upon, or other interference with the Greek struggle for understanding of the law..

    • Nice post. It has been my experience that the most difficult part of wealth is maintaining it. Creating it is comparatively easy.

  16. The Greek financial crisis is left over from the global crisis of 2008/2009. Banks are at fault, and “green” energy has nothing to do with it. To suggest otherwise is disingenuous and distracts from the true cause of the crisis.

    • The crisis preceded 2008 by many years. 2008 did bring it to a head.
      Yes, the banks did lend Greece money, and then they had the audacity to want the money paid back. How incredibly evil of them.

    • The Greek financial crisis began in 1973. Green energy has little to do with it but the global crisis of 2008/2009 only made a bad problem worse. It was not the cause.

      • Gents, throwing good money away always has something to do with it. Stupidity is not good for the economy. Capital squandered never has a good outcome. Certainly Spain is a good case history for Green economic death. They cut down orchards and built so much solar, that they had a surplus energy that Gov was contracted to subsidize. Tell me how competitive can a country’s industry be in a situation like this where they double and triple energy costs. Germany and Uk are belatedly finding out that ;very expensive energy is not good for your nation’s economic health. I guess the highly subsidized energy industry is doing fine, although energy poverty is killing off more and more of their customers, not to mention bats and birds.

      • Nobody claimed that the green madness was the cause, re-read the title of this article, it clearly states
        “helped create”, it says nothing about being the sole cause.

      • Poor tax collection, corruption, a relatively backward nation who tried to move too fast into the 21st century when credit became easier through membership of the euro, Fudging the figures on a grand scale in order to gain entry to the euro zone in the first place! all coupled with far too generous lenders who should have known better is the major explanation for the mess.
        Very little to do with green energy.
        Tonyb

      • add to Tony B’s (climatereason) comments –
        The Euro and the preceding exchange rate controls undermining the Greek tourist industry by pretty well doubling the price of things for foreign visitors (my parents went every other year for nearly 20 years, so saw the changes very clearly)
        and
        The continued push from Germany particularly for ever more austerity. Totally stifled any chance of economic growth to help get Greece out of the hole they were in.
        Green energy may have been a blind alley, but it was a very minor player in the troubles the Greeks now find themselves in.

    • It couldn’t be that the Greek government lied about its financial affairs to gain entry into the Euro, with the knowledge of those in Brussels, so that it could access mispriced debt on which it could gorge until it could gorge no more. The true cause of the crisis of 2008-2009 was too much debt used to build stuff people didn’t want or need including windmills and solar farms with horrible production capabilities and subsidized tariffs and high costs to energy consumers, because GDP!, and jobs!, and saving the world!, More of this is also apparently the solution. Should turn out well.

  17. Green politics do a lot of damage, but I don’t buy into the Green explanation for Greece. The 2004 Olympics, in no small part, contributed to the mess. Greece borrowed a lot of money, created lots of cushy high paying jobs, and then really got no return, as do few cities who host the Olympics. In the past 50 years only Salt Lake City and Beijing created anything from their Olympic expenditures that was both useful and sustainable beyond the games.

  18. We all know that cheap fossil fuels are the main source of 20th century wealth. When the “greens” attacked that in the 1990’s thru today, they kicked the foundation from under the economy. Collapse was the very predictable result. It is indeed due primarily to “greens.”
    Worse. These “greens” also call carbon dioxide a pollutant. It is the very basis of terrestrial (land-based) life, from people all the way down to the bacteria. An agricultural collapse can be predicted as well. That is why we fight.
    I am getting a little tired of us merely being right about the facts all the time. There are lives to save–millions of them, possibly billions. We need to change the culture.
    The greens are starting to catch on that “soil sequestration” returns carbon to the soil. They have not yet figured out that current farming–and dams–have killed an enormous amount of the life on Earth, and that this is so severe that it forms a more plausible explanation for the Keeling curve than even fossil fuels. They have not yet figured out CO2–and fossil fuels–are mitigating factors allowing us to survive our folly a little longer, and allowing restoration agriculture.
    The greens are getting into restoration agriculture. You need to get into this as well. It is the solution. If you are gentle enough with them, we can work together and people and the biosphere will greatly benefit.

  19. The problem with Greece is very simple to understand. They are suffering from the law of compound interest. It works for you when you are saving and equally against you when you are borrowing.
    Greece has run a deficit continuously since 1973 – that will be 43 years in a row this year.
    Take a 2% net deficit after inflation every year for 30 years and your accumulated debt will exceed 170% of your GDP. This is where Greece is now.
    Greece has no real industry, no real exports, no real way to grow out of their debt problem. They have tourism and a government economy. Now the government finds itself unable to borrow.
    Greece is in for years of hard times, Greeks working for the government or now on pension are in for real hardship and Greece’s lenders are about to take a brush-cut.

  20. Since the 2008 crash a majority of the Greece bailouts have not been used within the country but instead to prop up European banks. The Greek debt must be written off as it is a fraud.

  21. As I understand it – Greece joined the Euro without truly meeting the necessary conditions (sufficient conditions are where the hole in the Euro project sits eg compared to the Fed that occasionally bails out say California there is no such mechanism in Europe so Greece with their massive debt and shrinking GDP are between a rock and a very hard place, never able to pay off what they owe and with no escape mechanism).
    The global financial crisis of 2008 was triggered by sub-prime defaults and the associated rotten, opaque financial instruments like credit default swaps and rotten derivatives. But what we have faced since is the way in which the major governments, the IMF, ECB et al responded. That response was heavily biased towards austerity and bailing out failing banks, not jailing some of the prime movers etc. The choice was always between a hard landing and a soft landing. Growth suffered ie energy usage reduced etc. Now whether that was a simple by product of governments’ actions or factored into their decision making process who knows?

    • son of mulder
      To describe Greece as not ‘truly meeting the necessary conditions’ for Euro entry must qualify for the Blogosphere’s biggest understatement of the day. It was widely known even at the time of Euro entry that the figures the Greek (and Italian) Government submitted bore no relationship to the economic reality, but a political calculation was made that they should be allowed to join.
      It’s a good point you make that the Euro is not backed by sufficient political and economic union between the members for it to remain stable – there is too much power centralised between the German government and the ECB for things not to be run primarily in the interests of the German economy, which is obviously very different in make-up from the economies of the southern European states

  22. U.S. bought Alaska. This may be a good time to buy a couple of Greek islands – or maybe Puerto Rico. How are renewables doing in Puerto Rico?

  23. I didn’t know about the overprinting of carbon credits aspect. So, which came first? Overprinting money or overprinting carbon credits? Are they related? So many questions and so few answers.

    • Add on that organized crime got into the act an defrauded the carbon credit market of hundreds of millions.

    • Greece’s problem was that once they joined the Euro, overprinting money was no longer an option.
      The traditional method for bankrupt countries to get out of debt was to debase their currency, and then pay off their debts with worthless money.

  24. Isn’t it ironic that for many years, the “warmists” have warned us about a climactic tipping point, all the while they were ignoring an economic tipping point? The former hasn’t materialized and the latter is producing new consequences. It seems to me that economic collapse prevention trumps climate propheteers (profiteers?) – or should.

    • I believe economic collapse is viewed by the scientists cum policy wonks working in tax funded climate centers as a feature, not a bug.

  25. “I’m not suggesting all of Greece’s financial problems are due to Greece embracing the false promise of green wealth. But the massive misallocation of resources and domestic green wealth destruction can’t have helped. Greece now stands on the brink of defaulting on a $1.73 billion IMF payment – a payment which Greece might have been able to afford, had they not been lured into squandering billions of Euros of borrowed money, on the empty renewable energy pipe dream.”
    It would be nice if you could summarize the figures and the economic analysis which form the basis for your opinion. Then it might be possible to see if the magnitude of the investments into wind and solar power are likely to have had a significant negative effect on the greek economy.

    • I didn’t realize commenters could give homework assignments to those with posting rights on this blog. In that case: Please also analyze the misallocation effects of hosting the Olympic games and of other sums squandered by the government of Greece, using figures and economic analysis. Show your work.

      • I just think that such claims as presented in the post should be supported by some figures. Else it will be just the same kind of claims that we hear all the time about all kind of effects from increasing CO2 in the atmosphere.

        • Equivalency, if any, stops where the claimant invokes state control to correct the supposed causes of his claim, yes? The scientists cum politicos in tax funded climate shops always do both: claim and invoke state control sometimes implied often with the fictional “we.” If one concurs in the science bit and does not concur in the state control bit, he can still be subject to efforts to ruin by those oeople.

  26. The Greeks have tripped up empires before. Ask the Persians. The Greeks delayed the entry of German want to be empire into Russia, allowing the Russian winter to complicate the invasion. The Ottoman Turk efforts were also complicated by the Greeks. It will be interesting to see how the Greeks complicate the Euro want to be financial empire.

  27. In 1978 a friend who was a machinery dealer got an order for more than one million $ his bank told him get the money first as they do not pay,see nothing changes

  28. I have the same policy for Europeans as I do with women in my life. They are always right no matter what. Not to mention I don’t care for the constant finger pointing Americans receive from other countries. Everybody is always an expert on everybody else’s problems. This has been the best policy for me so far.

    • Imagine the disappointment that these reports are not going the other way! It must be kinda sad to be on the team that’s hoping for a poorer outcome.

  29. I do remember the story last winter that Athenians were burning wood to heat their homes. First, the government increased taxes on heating oil, so people started burning diesel…
    Yeah, this article sounds about right.

  30. I might be in the market for one of their small islands. It could wind up being cheaper than a U.S. timeshare.

    • I have an English cousin who lives on one of the off shore islands.(Doesn’t own it) Last financial crisis I asked how he was, and as he receives his money from UK, he said he was OK.

  31. I am thinking of buying one of those Greek islands but only if I can then have it as a new country. I will then make it a place similar to the Caymans with a little chap called ”The Manager” sitting on an orange box outside of a hut that I will call ”A Bank”.I bet it will be overwhelmed with all of those Euros that are presently underneath Greeks mattresses!

  32. Ghost wrote: “Water, rail and electricity should all be state-owned and controlled.” Is this because a crappy train ride drinking poor quality water (or expensive imported bottled water) after departing an ancient station with flickering light and surly workers, all funded with black box subsidies to hide true costs, and run by people with no incentive to improve or responsibility for bad outcomes, is essential?

  33. According to a family friend who visited Greece in the late sixties or seventies, they already were using solar panels for heating water. He added they would not be as successful in UK, especially Northern Scotland and the islands because of their winter and summer sun cycles being on the edge of the Arctic circle. I did read that council rates were not payable by some if they were attempting renovations. Lots were permanently renovating their homes. So – Greece should never had entered the EU and Euro and actually I suspect that the IMF are to blame too. At least the UK has been right not to change from sterling to Euro. National culture and mind sets in Greece do not meld well with the British or other European countries, but besides that I don’t wish them ill. And this referendum will pass the buck from the Greek government’s mismanagement to the EU and IMF. I don’t know how this will go down the wire for other countries we’ll wait and see.

  34. Greece is the redheaded stepchild of the EU.
    wattsupwiththat.com/2011/06/25/eu-carbon-credit-trading-takes-a-dive-in-greece-they-cant-hardly-give-eu-carbon-credits-away/
    Way back in 2008, Greece was caught not reporting how much co2 emissions they were producing, in order to obtain those pretty little carbon coupons that was being handed out. So the U.N. Climate Change Secretariat banned Greece from trading coupons.
    Then soon after, private firms holding those worthless coupons scammed millions from the private sector, selling those worthless coupons.
    Greece probably should have stayed away from the credit scheme after that. Instead, the EU let them back into trading.
    Unfortunately for the Greeks, they got into the game too late, and that was about the time that Anthony Watts wrote the post I pasted.
    We can’t blame the government officials of Greece trying to fleece the EU out of green money, but we can blame them for repeating the same mistake.
    What we can hope for is certain carbon emitting industries to look for huge tax breaks, in order for Greece to get back on its feet and tell the EU to go to hell.

  35. Thanks Joel. But the Greek government took on a lot of debt, now they are asking the people to not blame them but the IMF and EU. The situation in Greece is bad, doctors do second jobs to pay for their up keep because they are not subsidized. The days of the Ancient Greek are well and truly over. They’ve become a third world country now, with only the noble history to sustain them. Some ancient Roman writer said ‘Only the Greeks philosophize, the Roman’s don’t we are pragmatic’. I’d like to know where all these billions went too? Of course the people will vote to get out of the EU. One way of passing the buck from their government to the IMF and EU. (Who should take some responsibility in this situation).

  36. If a country adopts “The Spanish Model” over renewable energy, it is a 100% certainty it will result in an economic disaster for that country.
    The western world developed thanks to two things… cheap fossil fuel energy and capitalism … two things for which the world has not yet found better substitutes to replace them with.
    Yet this is exactly what the UN is promoting … eliminating fossil fuel energy and replacing the economic model of the last 150 years (capitalism)… an impossible dream!!!!!!!!!

  37. The Green Madness is only one manifestation of euro-sickness: Forced purchases of useless (made in Germany) junk payable by new, off-balance sheet debt. The absolute figures are not that large. Only €9 billion (about $10) for 5 GW of quite useless wind/solar nominal capacity, with zero or minimal real fuel savings, costing about €1.5 billion per year in inflated electricity bills (plus infrastructure costs). The numbers are not large compared to the 400+ billion outstanding debt, but the multiplier effect on the economy is large. Industry has left the country in search of cheaper power. Unpaid electricity bills are mounting. Somewhere down the line tourism will be affected (unless if you all love 300 ft windmills view from your hotel room). By the way, the annual cost of Unreliables is about the amount of the missed iMF repayment. Sad, and dumb. GREEN.

  38. Monetary union meant that Greece and others could suddenly borrow at German interest rates ……which were far, far lower.
    Greek rates were higher for a reason.
    Same problem in 2007/09.
    The Chinese miracle economy built up an enormous mountain of cash which had to go somewhere so after a worldwide shopping spree that snapped up every farm and mine available failed to sop up the mess, the Chinese began lending but at very low rates which were never raised no matter how hard the US Fed bleated (year in year out).
    This Chinese money flooded the worlds banks continuously, overcooking the house markets in just about every country.

  39. bait and switch ?
    December 2011
    ” The idea is simple and smart. Investing in generation of solar energy in Greece, a country where the sun shines a lot – 50% more than Germany – would yield more kilowatt hours in comparison with the same investment in a northern country. For Greece the investment would create new jobs and a strong domestic PV industry. The importing country would be able to achieve its renewable energy target at a lower cost. The savings could in turn be invested in a sector where that country has a competitive advantage. This translates to more GDP growth for all the countries involved.
    The aim of the project is to produce up to 10 GW of solar energy generated electricity by providing potential investors with “turn-key” fully licensed projects in specific state-owned site locations, free of any administrative and bureaucratic barriers. The 10 GW of planned PV capacity exceeds daytime national energy demand and will make available a significant amount of energy for export to third countries. The exports to EU Member States can take the form of physical and statistical transfers, until the appropriate infrastructure is constructed, according to the cooperation mechanism provided for by Article 6 of the Renewable Energy Directive (2009/28/EC).”
    remember this: “The exports to EU Member States can take the form of physical and _statistical_ transfers”
    http://www.neurope.eu/blog/helios-more-project-between-greece-and-germany/
    March 2012
    “This idea is the brainchild of Finance Minister Wolfgang Schäuble, who first discussed it a year ago with then Greek Finance Minister and current Environment Minister Giorgos Papakonstantinou. The project has since been dubbed Helios. “It will be a state-run company that will establish subsidiaries to produce solar energy,” explained Papakonstantinou. Helios is to cooperate with private investors who could, for instance, set up solar panels in state-leased areas. ”
    http://www.dw.com/en/greece-to-revive-economy-by-exporting-sun/a-15819322
    March 2013
    “the Renewable Energy Sources (RES) Fund deficit, which is expected to grow to 473 million euros by the end of this year and 905 million euros by the end of 2014. This fund is reserved for supporting renewable energy producers in Greece.”
    http://www.forbes.com/sites/christophercoats/2013/03/19/whats-behind-the-sudden-solar-surge-in-greece/
    May 2013
    “Greece and some on the European Commission level still believe in a strong national sector. Some, including EC Commissioner of Energy Gunter Oettinger, have suggested that one day Greece could transport its wealth of solar power to the rest of Europe through sprawling projects like the planned Helios facility. The proposed solar plant would offer 10GW of installed power by 2050. However, much like the wider solar sector across the Mediterranean region, momentum behind the Helios project has faded in recent months as dreams (a $27 billion price tag) collided with reality (Greece’s current economic potential.)”
    http://www.forbes.com/sites/christophercoats/2013/05/17/what-happened-to-greeces-solar-surge/
    September 2014
    “Furthermore, considerable uncertainties exist in the basic economic parameters of “Project Helios”. It is not at all obvious that the PV electricity to be imported by Germany from Greece will be paid on the basis of the feed-in tariff system. The passing of a new law by the German Parliament for this case, as the Greek Ministry “YPEKA” is widely expecting, by adopting a feed-in tariff scheme for Greek solar PV electricity over 25 years with additional charges to the consumers and the economy, by-passing the competitive electricity market is simply not a realistic proposition. Consequently, the only way for “Helios” to go ahead is for imported PV electricity by Germany to be paid through the local competitive electricity market. However, such possibility, regarding the entry of PV power generation in the German and European electricity markets would only be effective by 2020, expecting competitive solar PV power generation costs meanwhile. Consequently, any government expectations for a sizeable contribution of “Project Helios” to Greek debt reduction are totally unfounded. ”
    http://www.iene.eu/project-helios-is-not-bankable-according-to-a-just-released-iene-assessment-study-p82.html

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