Greece • Hacker News Board

Re: Greece

#141

Post by Gibbon1 » Sun, Jul 05, 2015, 8:53 AM UTC

Shivetya wrote: post #91

giggzy wrote: post #22

Earlier quoted context omitted.

The creditors ( banks ) are part of "moral" game here too. If the Euro cannot handle Greek ( and Spanish , Italian, Portuguese , Irish ) default then members of the Euro must share the imbalance. As an american tax payer it hurt to watch bank bailouts here. In europe I keep hearing countries names, but this is a bank bailout fundamentally. Sticking the debt on national governments while also forcing austerity ( defac…

The EU was never to be a transfer union, this setup was required to get the large economic countries to accept the weaker countries being admitted. National pride would mean political suicide for any leaders who suggest sending money out in the form of welfare. While I am quite willing to lambast the banks in the states for the mess they got into I am not so willing to do so with regards to their lending to Greece. S…

>The EU was never to be a transfer union, this setup was required to get the large economic countries to accept the weaker countries being admitted.

Not compensating economically weaker countries in a currency union is completely unjust and immoral. Weaker countries give up the ability to control exchange rates. And they have to deal with trading in stronger currency than they would if they were going it alone. This makes their exports relatively unattractive.

> The IMF is pulling back because they were overly generous giving the Greek government far more support that rules generally permitted.

I think the IMF is pulling back because they can't stomach this crap anymore.

> Greece has the highest military spending vs GDP of any NATO nation second to the US.

Right so French and German defense contractors bribed previous Greek politicians to buy weapons systems on credit. And the ECB etc are dead set that that part of the Greek budget continue as usual.

Right.

Re: Greece

#142

Post by spystath » Sun, Jul 05, 2015, 8:55 AM UTC

revanx_ wrote: post #133

I've meet a handful of young greeks(Age: 17-29) since 2010 and when asked about their situation, especially the unemployment rate they all said the same thing, young greeks don't want to work unless it's a high paying gov. secure job with 6 hours a day 5 days a week schedule. Ironically all of them were gamers but considering that the unemployment rate is about 50% with young greeks, it's hard to argue with that. Als…

Being greek in the same age group I dare to say that what you support is a blatant and dangerously ignorant lie. There are tons of people that have law or engineering degrees and would be grateful for a supermarket cashier job or flipping burgers. There is a serious problem with greek young people, they are basically a burnt generation, doomed to either chronic unemployment, ridiculously low-paying jobs (I'm getting tired of the "lazy, tax-evading, early retiring greeks" mantra being repeated everywhere. I expect generalisations from reddit, but I expected something better from HN.

Re: Greece

#143

Post by cyphunk » Sun, Jul 05, 2015, 8:59 AM UTC

trhway wrote: post #126

elorant wrote: post #62

Earlier quoted context omitted.

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…

>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 li…

> just compare - having your own currency, you could have covered the 14% deficit just by printing those money

Perhaps most glaring is the ECB's current Quantitative Easing effort to the tune of 1 trillion euros, buying assets and bonds in every country but greece [1]. This devaluing of currency is paid for by all users of the Euro, including greek. And yet it is used to prop up the same banks and countries greek lends from on conditions of austerity?

1. http://www.ecb.europa.eu/mopo/implement/omt/html/index.en.ht...

Re: Greece

#144

Post by drxzcl » Sun, Jul 05, 2015, 9:01 AM UTC

AndrewKemendo wrote: post #32

The TROIKA GDP Forecast graph is great! I think from now on I am going to send it to any investor who thinks asking pre-revenue companies for projections is a reasonable thing.

I had a good chuckle at that. It instantly reminded me of the Itanium sales forecasts[1]. It's like people are afraid to say "I don't know" (especially when money is involved) and just end up telling people what they want to hear.

1: https://commons.m.wikimedia.org/wiki/File:Itanium_Sales_Fore...

Re: Greece

#145

Post by nhaehnle » Sun, Jul 05, 2015, 9:04 AM UTC

nomercy400 wrote: post #139

visarga wrote: post #102

Earlier quoted context omitted.

Lending money is always a transaction between two parties. Both should be responsible. The financial state of a country is easier to evaluate than that of a person, they shouldn't have faller for the tricks of Goldman Sachs. > According to investigative reports that appeared in Der Spiegel, the New York Times, BBC, and Bloomberg News from 2010 through 2012, Blankfein, now Goldman Sachs CEO, Cohn, now President and CO…

So accepting the fact that both are responsible, what should the EU do with their relations with Greece? They can demand the money back, but that isn't helping. They can expect no money back, but what to do then? Kick Greece out of the euro, and accept failure of the principle that once in the eurozone, you stay in the eurozone? Basically accepting failure.

Option 3 is to implement a proper fiscal union. It's not clear how best to go forward with that (and as much as I'm in favor, it looks politically unrealistic right now), but it is clear that it's the only option for long-term survival of the Eurozone.

Re: Greece

#146

Post by nhaehnle » Sun, Jul 05, 2015, 9:06 AM UTC

skylan_q wrote: post #20

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?

Forgiving all the debt to Greece causes a worldwide financial collapse. Greece's debt was restructured to be drawn out into longer payment terms at a lower interest rate and at a reduced principal to be fair to them and to prevent a financial collapse. It's containment. It's been 5 years of containment now, and it's working to some extent as nations within the eurozone are much less exposed to the greek situation tha…

Forgiving all the debt to Greece causes a worldwide financial collapse.

No. Greece is too small for its default to be that important, especially given that the vast majority of debt is actually now in the hands of governments and government institutions.

Re: Greece

#147

Post by nhaehnle » Sun, Jul 05, 2015, 9:12 AM UTC

hughw wrote: post #111

I just read this Duke law paper[1] saying that in 2012 Greek creditors took a 64% haircut. I had not realized they had received such debt relief already. From the report: "Within the class of high- and middle-income countries, only three restructuring cases were harsher on private creditors: Iraq in 2006 (91%), Argentina in 2005 (76%) and Serbia and Montenegro in 2004 (71%). There are a number of cases of highly inde…

That's a good point, actually. There was a fairly generous haircut, and if the Greek economy had been allowed to grow from that point on, we wouldn't be in the mess we're in now.

As I see it, the problem was that the troika followed fairy-tale economics, forcing the obviously flawed doctrine of "expansionary austerity" onto Greece. In a large part, this was probably motivated by the desire to set a harsh example as a threat to other countries who might follow in Greece's footsteps.

Of course, "expansionary austerity" cannot work, and it especially cannot work inside a currency union, and so Greece's economy declined even further, making also the remaining debts unsustainable despite the haircut.

Re: Greece

#148

Post by Xylakant » Sun, Jul 05, 2015, 9:27 AM UTC

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…

> Existing debt would be paid off with the expedient of default and currency devaluation, just as other countries have historically done.

All current debts are held in EUR or other foreign currencies. Currency devaluation won't help with the existing debt. I doubt a single creditor would accept exchanging EUR denominated debts to New Drachme.

> I can't imagine that is a very hard problem to solve.

Even the greek finance minister considers that a major roadblock.

> As I added in my edit, Greece has a primary budget surplus. There would be no ongoing deficit.

Greece had a primary surplus, it's tethering on the edge of not having a surplus any more. Greece desperately needs money to invest and kick-start its economy. And then there's still the IMF debt and the IMF always wants and gets its money. Even Argentina treated the IMF debts preferential. Who would step up and cover that?

Re: Greece

#149

Post by pjc50 » Sun, Jul 05, 2015, 9:32 AM UTC

Shivetya wrote: post #91

giggzy wrote: post #22

Earlier quoted context omitted.

The creditors ( banks ) are part of "moral" game here too. If the Euro cannot handle Greek ( and Spanish , Italian, Portuguese , Irish ) default then members of the Euro must share the imbalance. As an american tax payer it hurt to watch bank bailouts here. In europe I keep hearing countries names, but this is a bank bailout fundamentally. Sticking the debt on national governments while also forcing austerity ( defac…

The EU was never to be a transfer union, this setup was required to get the large economic countries to accept the weaker countries being admitted. National pride would mean political suicide for any leaders who suggest sending money out in the form of welfare. While I am quite willing to lambast the banks in the states for the mess they got into I am not so willing to do so with regards to their lending to Greece. S…

The EU was never to be a transfer union

The EU was never meant to be a currency union either, it was a trading bloc when the UK signed up to the EEC.

Re: Greece

#150

Post by derriz » Sun, Jul 05, 2015, 9:37 AM UTC

zaroth wrote: post #130

hughw wrote: post #111

I just read this Duke law paper[1] saying that in 2012 Greek creditors took a 64% haircut. I had not realized they had received such debt relief already. From the report: "Within the class of high- and middle-income countries, only three restructuring cases were harsher on private creditors: Iraq in 2006 (91%), Argentina in 2005 (76%) and Serbia and Montenegro in 2004 (71%). There are a number of cases of highly inde…

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 pa…

I don't think you understand NVP and debt. You seem to be suggesting Greek debt be discounted at something close to the risk free rate?

These discount rates are correct. The value of a promise of future cash payments from the Greek government is worth far less than one from the US or German governments for example.

If you actually believe that Greek debt should be discounted much less, I'll happily swap any amount of (say 10 year) Greek bonds with you if you give me the equivalent face value of 10 year US treasuries or German bunds. Since you think the NVP should be similar, you should be happy to take the deal.