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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#101

Post by fredkbloggs »

haberman wrote: post #75
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:…

Yeah, this. I've never yet seen an explanation for this, in either the MSM or the financial press. There is an assumption everywhere that no one in the eurozone can default. My thinking is that this must have something to do with the ECB's rules on collateral; if the Greek banks have nothing but defaulted securities to offer, then they cannot meet their reserve requirements and therefore cannot obtain euros from the ECB or other banks within the system. That would result in all Greek banks going bust and being unable to operate, unless the Bank of Greece stepped in (by implication, issuing loans to banks in drachma in exchange for defaulted or new public debt securities). But this is speculation on my part; I have never seen the mechanism explained in any detail. Kind of amazing that in 7 years of "crisis" everyone has been happy to parrot the same default == grexit mantra without once explaining the mechanics, but here we are.

Re: Greeks Reject Bailout Terms

#102

Post by mnglkhn2 »

llamataboot wrote: post #96
mnglkhn2 wrote: post #67

Earlier quoted context omitted.

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…

You do realize that plenty of US states carry a "deficit" right? Many states receive more money from the Federal budget than they pay back in. We can debate why this is the case, but I don't hear anyone telling Mississippi or Alabama to suck the bitter pill of austerity or leave the US.

And for that these states accept the uniform monetary policy developed at federal level. Greece can have an argument if they would accept the same. But if you want to be independent from a fiscal point of view, then assume the whole thing.

Re: Greeks Reject Bailout Terms

#103

Post by atmosx »

wongarsu wrote: post #65
atmosx wrote: post #43

Earlier quoted context omitted.

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.

Of course Germany didn't do this because they love charity. But it is meant to be mutually beneficial: German banks get their money, Greece can stay in the Euro and can get further loans. It's not great for Greece, but the alternatives aren't much better.

Well, newsflass: TO me the average Greek tax-payer it wasn't benificial at all. It was to you apparently.

Re: Greeks Reject Bailout Terms

#104

Post by spdy »

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 funniest part is that people believe any western country will repay their dept. Neither Germany/France/Italy/Spain etc. will ever repay and the day when interest is the #1 spending point in every countries budgets we will maybe wake up and see that the system only benefits they few.

The Eurozone needs a vision for its future especially on the dept problem. Piketty said it correctly what we need now is a dept conference to renegotiate the dept of all EU states.

With this its possible to change the contracts of Maastricht and create new ways of financing the eurozone and implement ways of enforcing them as well.

In a few months Spain and Portugal will elect left wing parties into their government because these countries suffer under the austerity programs as well. Do we want them to exit as well?

Re: Greeks Reject Bailout Terms

#105

Post by pcrh »

brightball wrote: post #32
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…

Many US states are in constant deficit, and receive transfers from the richer states.

Re: Greeks Reject Bailout Terms

#106

Post by trhway »

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…

>18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people.

help them with what? One of the achievement of modern civilization is the recognition that bankruptcy is the preferable way than debtor prison to deal with non-ability to pay debts.

>Now greece voted against this bailout. There are a lot of people in europe (myself included, I am from Germany by the way) who are not willing to transfer further billions of euroes to greece, just so that a socialist party can fullfil its "promises" and increase their deficit.

if you noticed, Greeks have just agreed with you.

Re: Greeks Reject Bailout Terms

#107

Post by natrius »

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're strongly implying that Greece didn't cut its spending, which is very incorrect. Greek spending is no longer the problem.

https://www.vox.com/2015/6/30/8870257/greek-crisis-myth-aust...

Re: Greeks Reject Bailout Terms

#108

Post by haberman »

fredkbloggs wrote: post #101
haberman wrote: post #75

Earlier quoted context omitted.

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:…

Yeah, this. I've never yet seen an explanation for this, in either the MSM or the financial press. There is an assumption everywhere that no one in the eurozone can default. My thinking is that this must have something to do with the ECB's rules on collateral; if the Greek banks have nothing but defaulted securities to offer, then they cannot meet their reserve requirements and therefore cannot obtain euros from the…

Yes, the default == grexit line of reasoning is also under-explained, I agree!

Maybe an even simpler explanation for that link could be: a Greek default would make their borrowing costs so high that the government simply could not operate without being able to print money and inflate their currency.

Re: Greeks Reject Bailout Terms

#109

Post by TheCondor »

Kapura wrote: post #40
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 bai…

With that much debt is there a way to help them? It's going to be painful regardless.

The tax and corruption situation is an interesting one, it's not particularly new there. Who'd have ever guessed that a country with nearly 50% tax evasion might reneg on some debts? It's really bad when the local banks just factor that in when handing out loans. It's become part of the culture. I don't know how you fix that. I wish the Greek people the best though, it's a beautiful place

Re: Greeks Reject Bailout Terms

#110

Post by frivoal »

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.

It's a pretty good video. One thing it doesn't cover (or only implies) is that the debtor's countries spending plays a role in fueling the richer countries economies. Germany is in a better situation because of many fundamentals, but exporting to Greece (on borrowed money) didn't hurt.

Borrowing to spend without considering whether you can repay is irresponsible.

Lending money to someone so that they can buy from you, without considering whether they can repay is also irresponsible.

As much as Greece is guilty of the former, Germany is of the later.

Here's an other article putting a different spin on this: http://www.telegraph.co.uk/finance/comment/ambroseevans_prit...

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