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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#31

Post by saool »

Good for the Greeks to stand up against bullying and remaining somewhat dignified (as much as they could be after years of destroying their society at the whim of the "austericides").

That said, the vote means lots of pain coming their way, and Euro or not, their economy will take the hit now and the North will pretty much be able to buy half of the country at garage sale prices. Talk about some value investing for "deserving" German and French banks: you lend recklessly, get bailed out by your debtors, then you buy the damn farm.

Re: Greeks Reject Bailout Terms

#32

Post by brightball »

yc1010 wrote: post #3

Fairplay to them, the whole point of the EU project was to make us all "Europeans" and to prevent constant disastrous fighting between states and people of the continent. Sometime in the last 10 years many people and the media in the "core" countries got all smug and uppity towards those lazy "peripherals" and so on forgetting exactly why the project was started, overnight we stopped being "Europeans" and became "und…

It's a similar issue that we see in the US. There are a number of people (and the entire Constitution) that pushes for state level decisions unless it's absolutely necessary at the Federal level. This approach creates a more unified country because people are able to make their own decisions and live with them.

States are able to compete economically. People are able to move within the country to states with policies more in line with their own views. States have to have balanced budgets while the Federal government...well...doesn't.

There's a push in this country lately to do everything at a Federal level though, which creates constant tension because effectively people are trying to push their views on each other rather than simply pushing them on their own states and bearing the consequences internally.

At the same time, people become righteously offended at this concept. For every New Yorker I ask "Would you like Texas to govern New York?" I get another who is determined that New York should be able to dictate policy in Texas.

The cognitive dissonance is maddening.

Re: Greeks Reject Bailout Terms

#33

Post by joezydeco »

nailer wrote: post #13
tosseraccount wrote: post #8

Earlier quoted context omitted.

The uncollected tax receipts graphic is shocking: 89%. No wonder they can't afford their spending.

Greece needs to get their house in order: the stats on tax avoidance are huge. There was a greek restauranteur on the BBC earlier complaining that due to the ATM shutdown he couldn't pay his suppliers, even though he had the money, since they preferred cash. In the UK you wouldn't dare say that about your business on TV. However that's a generational change: Greece can't and won't be fast enough to do this and will n…

From reading on about how Greeks avoid taxes pretty publicly and blatently[1], this is more than a generational issue. It seems like it's buried deep in the culture now.

"A 32-year-old chef in Athens says his income taxes are automatically deducted from his monthly paychecks. But every time he buys something and is given an option to pay less if he doesn’t ask for a receipt, he says yes."

[1] http://www.wsj.com/articles/greece-struggles-to-get-citizens...

Re: Greeks Reject Bailout Terms

#34

Post by dantheman »

paskster wrote: post #23

I am astouned by all the comments, who say that "Greeks were getting a shitty deal" or that the bailout terms were somewhat "unfair". Facts are: Greece had a spending deficit for several decades now. This spending deficit accumulated to such a big dept, that no investors were willing to lend greece any more money. 18 european countries transferred billions of euros in the last couple of years to greece, to help the c…

The transfers to greece of the last few years were to a large extent a way of transferring private debt of german and french banks to the general EU populace.

Overall, I agree - greece needs to get its house in order and that involves making tough decisions, cutting jobs, lowering benefits, etc. They don't have the revenue to support the quality of life that they want to provide.

Re: Greeks Reject Bailout Terms

#35

Post by colindean »

yc1010 wrote: post #3

Fairplay to them, the whole point of the EU project was to make us all "Europeans" and to prevent constant disastrous fighting between states and people of the continent. Sometime in the last 10 years many people and the media in the "core" countries got all smug and uppity towards those lazy "peripherals" and so on forgetting exactly why the project was started, overnight we stopped being "Europeans" and became "und…

This is interesting. I wonder how many other large government bodies meant to unify multiple different cultures have hit this at some point, and what percentage has failed. The US seems to be a notable success, but at the time of its establishment, the colonies were not /that/ different.

It kinda makes me think of a chart showing which states benefit more from federal tax dollars than they pay in (https://www.flickr.com/photos/michaelpinto/2987025203/ which politifact says is "mostly true" http://www.politifact.com/truth-o-meter/statements/2012/jan/...).

I don't think there's much resentment from the blue states towards the red states for this specific difference, though.

Re: Greeks Reject Bailout Terms

#36

Post by quonn »

imaginenore wrote: post #28
tomp wrote: post #17

Earlier quoted context omitted.

Greece doesn't actually need any more bailouts (at least, it didn't until last week). They run a primary budget surplus, so all they need from the EU & IMF is some kind of debt restructuring so they can stop all debt payments for a few years while they pass the necessary reforms and their economy recovers. They also need a guarantee that the banks are safe by the ECB to restore confidence, but that doesn't cost any m…

"They run a primary budget surplus" if you don't count the payments on all the loans. Sorry, but if I borrow a million dollars, build some business that generates profits which are less than the payments on the loan, it's not a surplus. It's called default.

> if you don't count the payments on all the loans.

That's the definition of primary surplus.

> but if I loan a million dollars, build some business that generates profits which are less than the payments on the loan, it's not a surplus

Greece does not get the loans now - that money is already gone. The key insight from the "primary surplus" is that a haircut would work, because Greece could be self-sufficient once the debt burden is gone.

Re: Greeks Reject Bailout Terms

#37

Post by sigzero »

quonn wrote: post #25
nailer wrote: post #13

Earlier quoted context omitted.

Greece needs to get their house in order: the stats on tax avoidance are huge. There was a greek restauranteur on the BBC earlier complaining that due to the ATM shutdown he couldn't pay his suppliers, even though he had the money, since they preferred cash. In the UK you wouldn't dare say that about your business on TV. However that's a generational change: Greece can't and won't be fast enough to do this and will n…

True, but let's keep in mind that they managed a primary surplus despite this huge tax avoidance. This actually should make everyone bullish on Greece: These are not insurmountable problems. I still think that ΣΥΡΙΖΑ is the first party ever that would be fully willing to implement the right reforms (e.g. collecting taxes, etc.) if - and only if - the EU gives Greece a future by restructuring debt. It makes me sad to…

I doubt very much anyone is going to be bullish on Greece. They lent Greece money on the condition they stop deficit spending and guess what, Greece didn't do it.

Re: Greeks Reject Bailout Terms

#38

Post by dageshi »

skwirl wrote: post #22
dageshi wrote: post #4

Effectively a vote of confidence in the greek government. If they do decide to leave the euro then they now have the political cover for it.

Didn't the Greek government promise that voting "no" was the only way to STAY on the Euro? From what I have seen both sides were promising the same outcome, so the vote was all about who you believed more.

My interpretation is that this referendum effectively forces the ball into the EU's court. The Greek public rejected the last deal, if they don't get a better one then it will be the EU pushing the Greeks out of the euro and not the choice of the Greek government to leave.

Re: Greeks Reject Bailout Terms

#39

Post by davidf18 »

The real problem is that banks lent to Greece without doing their due diligence evaluating risk. Instead the bankers collected their fat fees for making the loans. Usually when banks make bad loans they have to write them off but when in 2010 the Troika (Euro Community, IMF, ECB) took over the Greek debt they paid 100% instead of insisting on the banks taking a "haircut" of say 50%. In truth some of the smaller members of the IMF did ask that they banks take a hit but the larger members turned that down.

The problems with the Greek economy that lenders are complaining about now, about the lowest tax collection rate in Europe, the "overly generous" retirement plans all existed before banks made the loans and fixing these problems should have been made a condition of making the loans in the first place.

It will be impossible for Greece to pay off the debt and now instead of the bank management (and the shareholders who appointed them) taking the hit for their incompetence in making the loans the taxpayers will take the hit.

The German and other taxpayers should not have a problem with Greece, but rather that Merkel and other governments decided to pay off the banks 100% instead of insisting that they take a large "haircut."

Ideally, the banks should have been made to take a "haircut" on the loans and the shareholders should have fired the management. Instead Merkel and other leaders let the banks off the hook putting the burden on the taxpayers. Now the taxpayers should fire Merkel and the leadership of other countries that OK'd the 100% payout to the banks in the next elections.

Re: Greeks Reject Bailout Terms

#40

Post by Kapura »

paskster wrote: post #23

I am astouned by all the comments, who say that "Greeks were getting a shitty deal" or that the bailout terms were somewhat "unfair". Facts are: Greece had a spending deficit for several decades now. This spending deficit accumulated to such a big dept, that no investors were willing to lend greece any more money. 18 european countries transferred billions of euros in the last couple of years to greece, to help the c…

I understand your position, and the Greeks are truly in a hole that they have dug themselves, but do you think that this latest package would have helped them?

It seems to me, as an outsider, that the political problems and ESPECIALLY the tax collection problems need to be addressed for any permanent change. Perhaps rather than austerity measures, the EU should have targeted the Greek public directly and tied the bailout funds to the citizens willingness to fund their own government.

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