Greeks Reject Bailout Terms • Hacker News Board

Re: Greeks Reject Bailout Terms

#71

Post by invernomut0 » Sun, Jul 05, 2015, 9:07 PM UTC

dantheman wrote: post #34

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.

Making economic decision that cut growth chances in the near/mid future doesn't help to lower the GDP/debt ratio, and that's why the recent reforms asked by the EU failed in improving Greek economic status.

Re: Greeks Reject Bailout Terms

#72

Post by makeitsuckless » Sun, Jul 05, 2015, 9:07 PM UTC

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…

You omitted the part where Greece repeatedly lied about the fact that it wasn't meeting its obligations.

And now our TV's are showing images of Greeks celebrating that they've told us to f-off with our euros. That's going to kill any kind of sympathy they still had when what's left of the Greek economy is going to crash hard over the next few weeks and months.

This is game over. Any compromise that was still possible is now dead, even if EU leaders would be willing to compromise, they can no longer sell this to their own people.

Re: Greeks Reject Bailout Terms

#73

Post by tptacek » Sun, Jul 05, 2015, 9:07 PM UTC

natrius wrote: post #61

tptacek wrote: post #47

Earlier quoted context omitted.

Apparently the deficit is more like 3% (depending on whether you believe Greece's own stats, or the EU's. Forgiving debt by definition doesn't change the primary surplus, right? The primary surplus is the budget before taking interest payments into account. And that's the whole premise of not bailing Greece out on Greek terms, right? That bailing them out doesn't accomplish anything if they're still on a course to ra…

Years of primary surpluses are clear evidence that Greece is capable of funding its own ongoing spending. This year is an aberration due to the crisis. If the debt were forgiven, I don't think Greece would need outside funds in 2016. Greece isn't asking for forgiveness though—they're asking for restructuring. Greek fiscal policy is not unsustainable. Much of it is unwise, but still affordable.

Can you cite some sources for the years of primary surplus? I'm looking for them, and the stats I'm seeing all suggest years of severe deficits.

Re: Greeks Reject Bailout Terms

#74

Post by beloch » Sun, Jul 05, 2015, 9:07 PM UTC

A Greek friend once told me that, in Greece, "only idiots pay 100% of the taxes they owe". His perception of his fellow Greeks' attitude towards taxes wasn't wrong. In Greece, tax evasion is endemic.

https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_...

It's hard to be surprised by the financial troubles of a government that is so utterly feckless when it comes to collecting taxes that members of it's own finance ministry are suspected of hiding their funds abroad. It is also hard to have sympathy for Greeks, most of whom apparently view tax evasion as a virtue.

Now that they've burned Germany and the EU, where is Greece going to get the money it can't collect from it's own citizens?

Re: Greeks Reject Bailout Terms

#75

Post by haberman » Sun, Jul 05, 2015, 9:07 PM UTC

hal9000xp wrote: post #9

Here is Bloomberg animation for european debt crisis: https://www.youtube.com/watch?v=C8xAXJx9WJ8 I kept this in my bookmarks more than a year. Euro is failed project by its core because monetary policy without fiscal polity doesn't work.

This is awesome, thanks!

There is one big part I really don't get though. Why would Greece's creditors assume that Germany was going to cover a Greek default, just because they are both in the EuroZone? That would be like my bank assuming that the US Government would cover my mortgage if I default, just because it's denominated in dollars. That line of reasoning makes no sense to me.

Related to this, the video says: "The problem is, somebody has to pick up the tab, or else every country in the Euro area will suffer." I don't get this either. That would be like saying that me defaulting on my mortgage will make all my neighbors suffer, just because our mortgages are in the same currency. It doesn't seem like a Greek default should hurt anybody but Greece and their creditors.

Re: Greeks Reject Bailout Terms

#76

Post by scythe » Sun, Jul 05, 2015, 9:07 PM UTC

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…

It's easy to see the story from that side and I think it's not "wrong", but the geopolitical story is being missed.

Greece has in a way helped the ECB by distracting economic pundits from their various other failures in the recession and recovery process. The truth is that we're all so used to being mad at the ECB that liberals are now confounded by the least bad thing they've done in a while.

It's long since known and agreed that austerity policies were detrimental to the recovery. The thing is that Europe's failure to pursue expansionary monetary policyead to both diminished inflation (which means debts have larger real value) and diminished growth in the eurozone, both of which hindered Greece et al's ability to repay debts regardless of the terms they were given. That's added to the fact that inflation couldn't happen and internal devaluation wouldn't happen as chosen by the Greek people. And internal devaluation, what happened in Ireland, is a pretty ugly process, though Ireland would be okay right now if the ECB hadn't also blown the recovery in general, methinks.

Now the issue is whether Greece gets what everyone else got. It's fair, but it isn't exactly right. And the ECB has distracted everyone from their big failures.

This is also being tossed around as proof that currency unions don't work! That's kind of a strong conclusion. I think it could work if it were well managed and smaller and less diverse. A couple of economies in similar situations with proper economic management can probably keep things together with only a small chance of an Ireland-style devaluation (and no Greece events), and in the future the charter could predict these sort of things.

That it turned into a call for political fusion of Europe is scary. I get that nationalism is bad and all, but you want to redraw the map and the culture...

...so you can keep the money.

Re: Greeks Reject Bailout Terms

#77

Post by dkopi » Sun, Jul 05, 2015, 9:08 PM UTC

atmosx wrote: post #62

dkopi wrote: post #48

Earlier quoted context omitted.

One thing's for sure, without countries to bail them out, without banks to lend them more money - the greeks will have no other choice but to increase their tax income and decrease their spending. Austerity as some might call it.

If the ECB keeps the current regime for another 2 to 3 weeks, then Greece might be "forced" to go back to the Drachma and devalue. At that point you don't need to increase tax incomes but you might have a series of other problems (control devaluations, impose capital control for an undetermined period, etc.) - but in the long run, might be positive (According, to Krugman, Stiglitz, S. Keen, etc.)

Inflating away debt is another form of increasing tax revenues. Also known as Seigniorage. It's just a more sophisticated way of collecting taxes, and it will harm the poorest greeks and middle class first.

Re: Greeks Reject Bailout Terms

#78

Post by tsunamifury » Sun, Jul 05, 2015, 9:08 PM UTC

colindean wrote: post #35

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…

California, Illinois and New York pay for the majority of America. These blue states luckily have values which protect the poor, socialist requiring red states. It's ironic that those states vote against their own interests, but we blue states sigh and pay out... Because no matter our race, economic class or education we are all Americans and we all make this place what it is.

Re: Greeks Reject Bailout Terms

#79

Post by Vaskerville » Sun, Jul 05, 2015, 9:09 PM UTC

tosseraccount wrote: post #8

dmckeon wrote: post #2

Here is a fairly detailed rundown of the situation: http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/05/7...

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

I have a few friends in Greece who will do anything to avoid paying taxes. Sadly, they think Greece will be the next Iceland and it's just not the right comparison.

Re: Greeks Reject Bailout Terms

#80

Post by derriz » Sun, Jul 05, 2015, 9:09 PM UTC

atmosx wrote: post #43

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 fact that you are convinced that Germany acted in Greece's best interest is what sets us apart. Your money went mainly to your Banks, via Greece. Concluding, I'd rather go back to the Drachma and blow the Euro project than die starving becuase it suits your country's political class. ps. Even if Greece doesn't put the last nail on the coffin of the EU-project, I'm 100% sure that the UK will.

The facts do not support your claim. In the four years before 2015, the Greek government got to spend in excess of 80 billion euros of money lent to it from other european countries. In addition the Greek banks were allowed to use almost 100 billion of "credit" from the ECB. I feel really sorry for the Greeks now - they are about to learn what it's like living without this support.