Greeks Reject Bailout Terms • Hacker News Board

Re: Greeks Reject Bailout Terms

#81

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

tptacek wrote: post #24

spiralpolitik wrote: post #20

Earlier quoted context omitted.

By leaving the Euro Greece will have the opportunity to put their country back together without 20 years of crippling austerity. They still need to fix their broken tax system and keep spending with their means but they have a much better chance of doing this on their own terms rather than under the cosh of the Troika. If only other countries could be so brave.

What is the difference between "crippling austerity" and "keeping spending within their means"? Isn't the biggest financial problem in Greece the relative enormity of the public sector? Wouldn't fiscal reform basically amount to slashing entitlements and public sector employment?

If they devote less of their economy to debt service (my understanding is that this is why they would leave the Euro), then they can have higher consumption at a given level of economic activity.

(I don't really understand the situation well enough to say whether or not they could possibly maintain the same level of activity outside of the Euro, but I think this is the logic behind that argument)

Re: Greeks Reject Bailout Terms

#82

Post by ghostunit » Sun, Jul 05, 2015, 9:09 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…

If you feel that "Greece" must be punished for fiscal irresponsibility with chaos and starvation, then while we're still bundling people into convenient country packages, why shouldn't "the USA" be bombed and occupied?

Oh, those wars and massacres weren't your decisions? Then, you think the average Greek took those Eurozone loans and bailouts themselves?

Re: Greeks Reject Bailout Terms

#83

Post by Al-Khwarizmi » Sun, Jul 05, 2015, 9:09 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…

"Transfer further billions of euroes to Greece" is precisely what the troika wanted to do, in exchange for draconian austerity measures like those of the last few years, which caused a 25% drop in GDP and a rise of the debt/GDP ratio from 105% to 175% (http://www.tradingeconomics.com/greece/government-debt-to-gd...).

The IMF themselves have said that Greek debt is unsustainable and a significant haircut is needed (although their head Lagarde ignores their analysts). Keeping with the dysfunctional austerity plans would only make the debt ball, and the eventual inevitable default, larger and larger. So even from a purely egoistic point of view, you should support the OXI.

Re: Greeks Reject Bailout Terms

#84

Post by tptacek » Sun, Jul 05, 2015, 9:10 PM UTC

tormeh wrote: post #54

tptacek wrote: post #24

Earlier quoted context omitted.

What is the difference between "crippling austerity" and "keeping spending within their means"? Isn't the biggest financial problem in Greece the relative enormity of the public sector? Wouldn't fiscal reform basically amount to slashing entitlements and public sector employment?

A public sector can be enormous without damaging the economy. In Scandinavian countries it's about 50% and used to be higher. The problem is that the Greek government is both bad and weak. The Greek public sector's purpose is not really to provide utility to the populace, but to buy votes from the unions. It's very hard to pay for because it does not enrichen the private sector nearly as much as it should. And becaus…

Right! There are so many ideologues using Greece to support an agenda, I should probably be more careful to distance myself from "public sector bad, private sector good".

The issue with Greece seems to be that they have an enormous public sector, and extraordinarily generous (literally: extra-ordinary) entitlements, "financed" by a nominal tax rate that is decoupled from their actual tax income. From the little reading I've done, it seems like there's been a theme throughout the 1990s of "raising tax rates" to fund a populist spoils-system government, with scare quotes deliberately applied to "raising tax rates".

Re: Greeks Reject Bailout Terms

#85

Post by dataker » Sun, Jul 05, 2015, 9:10 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.

Did Germany's political class benefit from this? Maybe.

Still, Greece allowed it to happen by not facing reality.

Re: Greeks Reject Bailout Terms

#86

Post by gutnor » Sun, Jul 05, 2015, 9:11 PM UTC

arrrg wrote: post #18

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…

The point was rather to give the fighting appropriate and effective political venues for resolving conflicts and finding effective solutions. There will never be no fighting because that is not possible or at least quite unhealthy. After all, isn’t the point of politics to solve conflicts – which are quite normal and will always be everywhere – in a non-violent way? (Tools for solving conflicts between nations in a n…

Do you remember Cyprus ? One day they are good hard working European, the next day all of them are gangster laundering russian crime money and taking money out of their bank account is fair justice ( but fear not brave citizen, your money is safe at the bank because your are not dishonest like they are )

Europe has treated its "citizen" like rubbish since the crisis. You can hardly blame the push of Eurosceptic parties across Europe - in time of crisis, Europe is really ugly.

Re: Greeks Reject Bailout Terms

#87

Post by mnglkhn2 » Sun, Jul 05, 2015, 9:11 PM UTC

mnglkhn2 wrote: post #67

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 like everybody all of the sudden will come to the conclusion that paying their mortgages is somehow a humiliating and oppressive endeavor. Nobody is really familiar with what the "oppressive" terms really are, but everybody feels like the Greeks are totally undeserving of paying their debts. How does everybody feel like to have their subway fares reduced to $0, the way the Greeks had them for the past decades? I…

Only 300 of the area’s homes claimed to have swimming pools, which require owners to pay a luxury tax. But when officials looked into the low number, using Google Earth to scan the back yards, they found the number of pools to be closer to 20,000. The fraudsters responded by buying camouflage-print tarps to cover up their pools, the Mail reported.

(http://nypost.com/2015/07/05/decades-of-fraud-have-swindled-...)

In Greece, A Hairdresser Can Retire At 50 With Full Benefits (http://www.businessinsider.com/in-greece-you-can-retire-at-5...)

Re: Greeks Reject Bailout Terms

#88

Post by liebknecht » Sun, Jul 05, 2015, 9:11 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…

The reason you're "astounded" by all these comments may have to do with the fact that you seem to rather limited awareness of the basic history regarding Greece's current situation.

For example, there's no mention at all in your remarks about the well-known shenanigans that led to Greece joining the Eurozone (and camouflaging its debts) in the first place (with the connivance of certain large foreign banks). Or of the naked arrogance and condescending, hoof-in-mouth verbiage we've been treated to by certain foreign leaders (like Angela Merkel) in recent months.

Just simply: "look at those Greeks -- they're irresponsible, they're overspending, and now they're looking for another handout", basically.

Re: Greeks Reject Bailout Terms

#89

Post by makeitsuckless » Sun, Jul 05, 2015, 9:12 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.

You're not starving yet. You wouldn't be starving if Greece had accepted the deal.

You may however start to feel very hungry soon holding a pile of worthless Drachma...

Re: Greeks Reject Bailout Terms

#90

Post by lifeisstillgood » Sun, Jul 05, 2015, 9:12 PM UTC

An analogy I used with my wife trying to explain / argue Greece. It struck a chord.

Fiscal Union:

  Would you lend me 10 million dollars?

  No

  If I was Warren Buffets adopted son (!) would you lend it to me?

  Maybe.

Well that's how the rest of the world's investors saw Greece. Despite all the protests that it was separate debt no one believed them. And Greece is about to prove them right.

Debt restructuring (ie fiscal Union "just this once")

  If I am having to spend five months negotiating with the Bank Manager to get an overdraft that will let me pay him the next months mortgage payments with that overdraft, then we should stop talking about the cuts I need to afford the overdraft and look at how to deal with the mortgage.

I don't like the situation Europe is in - but it was clear in the 1970s where this was all going - just because it is not politically palatable right now, Euro zone countries are going to have to become responsible for each other's debts, and that means negotiating on fiscal policies across Europe.

Stuff TIPP - that's a serious agreement to hammer out. And don't do it in secret.