Greece

"Well, Greece implemented a lot of changes, and it's one of the few Eurozone countries that successfully implemented internal devaluation (salaries halved)."

I wish more pro-Eurozone people would consider this one. The creditors were very plainly less concerned with getting paid back than they were with waging a brutal class war.

This is a classic principal/agent problem. The Troika negotiators are not playing with their money, they are playing with taxpayer money. Hence the debt is more of an excuse to push for the reforms that their friends want, irrespective of the very real negative effect it has on Greek solvency.

This, if for no other reason, is why the debt should never be paid back.

"Among creditors, a big catchphrase now is “moral hazard”. We cannot be too kind to Greece, we cannot forgive their debt with few string attached, because what kind of precedent would that set?"

They already set that precedent by refusing to punish the individuals involved in the fraudulent misrepresentation that led to Greece entering the Eurozone.

Still not too late for the creditors to make amends for that mistake.

>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.

yep, man, those sacrifices would mean that some bondholders in Germany will get their half-percent... I'm really feeling for your people - i myself lived through pretty devastating (or as it happened - transforming) years 25 years ago in USSR/Russia and such things are brutal to regular people.

Anyway, just compare - having your own currency, you could have covered the 14% deficit just by printing those money - it would have caused a few percent of inflation, like 5-6%. Few years ago US had like 3 times bigger deficit than that Greece's deficit (and FY2014 US deficit is about the same as Greece's) and just kept printing the money with official inflation less than 2% or something like this. And unemployment situation is among all times best today.

Germany is the direct descendant of Nazi Germany, just like Russia is the direct descendant of USSR.

TFA is arguing the private creditors got off far too easily. Having made the loans of their own accord, pocketing the interest payments up to that point, you can be sure the private creditors were quite happy to have the debt off their hands in 2012. This is the largest transfer from private credit to public credit in history, right? These are the same loans Greece is now actually completely unable to service.

The paper talks about creditors taking haircuts, but then in the next paragraph that this resulted in very little actual debt relief for Greece? If private credits really had to absorb 50% haircuts on $100 billion of debt, point me to the massive string of bankruptcies? If I understand correctly, the "haircuts" are projections based on net present value using some arbitrary high discount rates (the paper mentions 9% !!!) so you have to appreciate that with a different discount rate you could claim the private debt holders were actually being paid even > 100 cents on the dollar.

  Using this 5 per cent discount rate to compare  old
  and  proposed  new  debt  flows,  the  debt  relief
  implied  by  the  July  2011 financing offer would
  have been approximately zero – indeed, slightly
  negative. Using the  “risk  free”  discount  rate  of
  about  3.5  per  cent  (not  shown  in  the  table),
  would indicate an *increase* of Greece’s debt burden by
  about 11-15 per cent [over] the July 2011.

That's from your quoted article! Doesn't sound like such a great haircut to me... Any time private banks are being bailed out, I'm going to assume that they are being well enriched in the process. Just the way of the world. People will just play with the numbers to suit a given narrative, so it's hard to even find a "truth" in all this. A 9% discount rate for sovereign debt is insane though. Almost any NPV analysis is going to look like shit against a 9% discount.

EDIT: I read further down into the paper, and the actual discount rates used to arrive at the "59 - 64%" haircut range for the 2012 restructuring were 15.3% - 18.7%. Just WOW. So, yes, creditors were NOT paid the full NPV on over a hundred billion of dollars of debt being carried through maturity at rates higher than my credit cards. This should surprise exactly no one.