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Greece

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Re: Greece

#61

Post by josephlord »

mike_hearn wrote: post #24
DangerousPie wrote: post #17

Earlier quoted context omitted.

Yes, pretty much. The author's argument is that everybody knew that their economic state was misrepresented, so the banks should have never lend them money in the first place. The mismanagement leading up to the financial crises was of course the fault of the Greek government. However, the reforms that the EU has proposed/enforced since then seem to have been more about punishing the Greeks than about actually buildi…

The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. Maybe hairdressing should not be considered a 'dangerous profession', thus unlocking various benefits. Maybe Greek train drivers should not be paid $130,000 a year to drive near-empty trains. Maybe Greece should be able to grow its own food instead of importing more than half o…

No reforms in the world will allow Greece to meet the current liabilities, even the IMF says so. The bigger the surplus the Government runs (to pay back the creditors) the more the economy will shrink and the further more they will miss their target by.

Germany isn't paying for Greece, it (well the troika but Germany is significantly calling the shots) is effectively governing Greece by a series of manufactured crises every 6 months in which they can impose conditions (detailed policy requirements on internal issues including pensions and taxes) for the next payment (which is 90% transferred to creditors rather than going to Greece itself).

Whether fascism is the right word or not there is something profoundly undemocratic about the situation and there are several valid comparisons with fascism. Singling out a groups as scapegoats for all blame and the aspect of collective punishment. Sensible people trying to maximise the return on their loans would restructure them to take some loss but to enable Greece to recover to be able to pay the bulk of them. Instead the focus seems to be punishment for irresponsible lending.

Re: Greece

#62

Post by elorant »

telepheron wrote: post #11
msabalau wrote: post #6

The entire thing is worth reading, but the key take away: "Regulatory mistakes and agency issues within banks encouraged poor credit decisions. Spanish banks lent into overpriced real estate, and German banks lent to a state they knew to be weak. Current account imbalances within the Eurozone — persistent and unlikely to reverse without policy attention — implied as a matter of arithmetic that there would be loan flo…

So we just ignore the fact that the Greek government misrepresented their economic state, failed to implement the necessary changes and then puts up a completely bogus referendum?

failed to implement the necessary changes

Greek here. This is an understatement. While I’ve mentioned in other posts that our economy is faulty, arguing that we didn’t do anything to fix it is awfully wrong. We did a lot. We managed to move from a 14% deficit to a 1% surplus in just four years. Four. Fucking. Years. No other country in the developed world has done such a feat in such a short time. The effect of that was tremendous for the population, 50% of young people are unemployed.

So while we admit our wrongdoings (well at least some of us do) we’d also appreciate if EU could cut us some slack. The reason radicals like Tsipras came into power is the lack of flexibility from EU leaders.

The tip of the iceberg is the report that was published last week from IMF that pretty much described the Greek dept as unsustainable. The report was known to various EU leaders for months but they chose to suppress it. I don’t need to tell you how this looks from our side. It’s preposterous to say the least. They say they don’t trust our government, and I don’t blame them for it, but how could anyone trust them. They’re all cunts.

Re: Greece

#63

Post by throwaway12309 »

msabalau wrote: post #6

The entire thing is worth reading, but the key take away: "Regulatory mistakes and agency issues within banks encouraged poor credit decisions. Spanish banks lent into overpriced real estate, and German banks lent to a state they knew to be weak. Current account imbalances within the Eurozone — persistent and unlikely to reverse without policy attention — implied as a matter of arithmetic that there would be loan flo…

That bit about Spain just made me realize something:

- Spanish banks lent to overpriced real estate: The spanish people got austerity with the Spanish bank bailouts

- The German/french banks lent to a state they knew to be weak: The greek people got austerity with the German/French bank bailouts

Re: Greece

#64

Post by ams6110 »

twobits wrote: post #27

The basic idea: BMW wants to sell more cars to greeks. Greeks don't have enough money so they can't buy. Deutsche Bank (DB) gives "free money" in loans. (And of course DB knows that greece isn't exactly "strong" economically.) We are talking about a greek population that never ever had a loan before, while the prime minister talks about the "powerful (economically) greece". They also thought that the world "stock mar…

Germany also never repaid the money that the Greek Central Bank was forced to lend to the occupying Nazi regime in WWII.

Re: Greece

#65

Post by hueving »

Amezarak wrote: post #51
Xylakant wrote: post #42

Earlier quoted context omitted.

As a purely economic solution, a Grexit combined with a default might work. However, who would step up and finance the ongoing deficit? Interest rates even for short term borrowing would be unsustainable. What would happen in the meantime, until such a Grexit could actually be performed? The banks don't have money any more, there's no infrastructure to print new bills, there's no plan on how to actually do that. It's…

> As a purely economic solution, a Grexit combined with a default might work. However, who would step up and finance the ongoing deficit? As I added in my edit, Greece has a primary budget surplus. There would be no ongoing deficit. Existing debt would be paid off with the expedient of default and currency devaluation, just as other countries have historically done. A little rough patch and then things look up. Seems…

How will a country that has no money and terrible credit do when it needs to import 50% of its food?

Re: Greece

#66

Post by hueving »

twobits wrote: post #27

The basic idea: BMW wants to sell more cars to greeks. Greeks don't have enough money so they can't buy. Deutsche Bank (DB) gives "free money" in loans. (And of course DB knows that greece isn't exactly "strong" economically.) We are talking about a greek population that never ever had a loan before, while the prime minister talks about the "powerful (economically) greece". They also thought that the world "stock mar…

Who bought the BMWs in that scenario? If you are offered a credit card with a $20k limit, do you max it out with no intent to pay it back?

Re: Greece

#67

Post by cbaleanu »

misterbarnaby wrote: post #44

"They had knowingly and purposefully brought weak states into the Eurozone, because they genuinely, even nobly, wished to build a large, strong, United Europe." For folks who know Europe/Europeans well, is this true?

Not an expert, but the popular culture some EU countries is that the greek and spanish work less than people from NW Europe.

Personally I think this is highly subjective though.

Re: Greece

#68

Post by hueving »

ams6110 wrote: post #64
twobits wrote: post #27

The basic idea: BMW wants to sell more cars to greeks. Greeks don't have enough money so they can't buy. Deutsche Bank (DB) gives "free money" in loans. (And of course DB knows that greece isn't exactly "strong" economically.) We are talking about a greek population that never ever had a loan before, while the prime minister talks about the "powerful (economically) greece". They also thought that the world "stock mar…

Germany also never repaid the money that the Greek Central Bank was forced to lend to the occupying Nazi regime in WWII.

Germany is not the same thing as Nazi Germany.

Re: Greece

#69

Post by josephlord »

snitko wrote: post #59
namuol wrote: post #55

This was my main take-away: "There is one morality tale that says the debtor must repay, or she has sinned and must be punished. There is another morality tale that says the creditor must invest wisely, or she has stewarded resources poorly and must be punished. We get to choose which morality tale we most use to make sense of the world. We do, and surely should, use both to some degree. But if we emphasize the first…

Unfortunately, it's neither. The debtors in this case are the people of Greece, yet the ones who got them indebted are politicians, who misled the population into believing that the expenses the government had were sustainable. Even more important is that the politicians were not voted in by 100% of people, which simply means that many people who lost their money didn't agree with the policy that led to them losing t…

Reasonable points about democracy but as Churchill said: "Democracy is the worst form of government, except for all those other forms that have been tried from time to time."

> This is what's going to happen sooner or later to every other country which has a substantial debt.

Actually where the country controls its currency the effects are totally different and if the ECB could certainly step in for tiny Greece if there was a will.

> You can't spend more than you earn without consequences.

Actually the reverse is true for Governments which are like banks and create/destroy money. If they run a persistent surplus they cause the private sector to shrink or increase borrowing.

https://www.youtube.com/watch?v=jqzfOQXCwFg

Re: Greece

#70

Post by telepheron »

elorant wrote: post #62
telepheron wrote: post #11

Earlier quoted context omitted.

So we just ignore the fact that the Greek government misrepresented their economic state, failed to implement the necessary changes and then puts up a completely bogus referendum?

failed to implement the necessary changes Greek here. This is an understatement. While I’ve mentioned in other posts that our economy is faulty, arguing that we didn’t do anything to fix it is awfully wrong. We did a lot. We managed to move from a 14% deficit to a 1% surplus in just four years. Four. Fucking. Years. No other country in the developed world has done such a feat in such a short time. The effect of that…

That same report says that failure of the economy to recover is caused by the failure of the government to implement the necessary changes, worsened by the current government during the past 5 months.
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