Greeks Reject Bailout Terms • Hacker News Board

Re: Greeks Reject Bailout Terms

#111

Post by tptacek » Sun, Jul 05, 2015, 9:24 PM UTC

liebknecht wrote: post #88

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 th…

As opposed to "look at those Germans, they're terrorists who are using control of the ECB to extort a regime change in Greece", which is an equally hyperbolic message --- and, in contrast the to the summary you've provided, actually a message overtly sent by Greece's leadership.

Re: Greeks Reject Bailout Terms

#112

Post by wyager » Sun, Jul 05, 2015, 9:25 PM UTC

jessedhillon wrote: post #99

brightball wrote: post #32

Earlier quoted context omitted.

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…

> 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. Is that really the same thing? For certain economies, the impacts of state-level decisions have federal ramifications. California can remain relatively autonomous when making decisions about how best to regulate an information economy, but I do think that Cal…

I honestly can't understand your argument; you're saying that for some reason, places with information economies should have legal power over places with resource economies?

Re: Greeks Reject Bailout Terms

#113

Post by fredkbloggs » Sun, Jul 05, 2015, 9:25 PM UTC

davidf18 wrote: post #39

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 membe…

This is so common that it already has a name: extend and pretend. That's exactly what was done with Greece; the interest rate was lowered to a scandalously generous level, maturities extended to practically forever (Merkel and co. will be long dead by the time most of it is due), and everyone got to pretend things were fine. As usual with this approach, things weren't fine, and when it was time to extend and pretend again, someone decided they weren't going along with it.

Japan has been extending and pretending for about 25 years now. They are far more indebted than Greece but their interest rates are even lower. There is no conceivable way that Japan is ever going to repay that debt, and it's still growing at a pretty rapid pace. The circumstances are different (very few JGBs are held by foreigners, and Japan issues its own currency), but it's pretty clear from experience that extend and pretend leads to lengthy periods of anemic economic activity. The question is whether default and workout will be any better; the record there is mixed at best.

Re: Greeks Reject Bailout Terms

#114

Post by natrius » Sun, Jul 05, 2015, 9:25 PM UTC

tptacek wrote: post #73

natrius wrote: post #61

Earlier quoted context omitted.

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.

2013: http://www.wsj.com/articles/SB100014240527023045495045793203...

2014: http://www.wsj.com/articles/greece-misses-target-on-budget-s...

2013 caveat: http://yanisvaroufakis.eu/2014/04/24/greek-statistics-are-ba...

Re: Greeks Reject Bailout Terms

#115

Post by kedean » Sun, Jul 05, 2015, 9:26 PM UTC

atmosx wrote: post #98

paskster wrote: post #59

Earlier quoted context omitted.

I am very pro Euro. But I don't like the fact that a single country in Europe feels that 18 other countries have to pay their debt. These bailouts in the past were signed from the greece government in the best interest of its people. A lot of people make it seem that we (non-greece european) somewhat forced theses agreements onto greece. In fact these bailouts where were unpopular in Germany, because it cost us a lot…

> These bailouts in the past were signed from the greece government in the best interest of its people. What if a country destroys, literally, the entire continent killing around 80 million ppl, 70 years ago. What should we do with this country? Should show some solidarity and pardon it's debt or "abide to the rules" and ask them to pay their dues to all the countries they created damages?

War reparations are in no way related to repeatedly breaking the terms of bailouts.

Re: Greeks Reject Bailout Terms

#116

Post by tptacek » Sun, Jul 05, 2015, 9:26 PM UTC

trhway wrote: post #106

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 German…

That's not entirely accurate. Some of the "No" votes may be agreeing with his statement, but the premise of the referendum was that it would strengthen Greek's negotiating hand: the "No" votes are supposed to represent a demand for better terms from the EU, not a rejection of the idea of a bailout altogether.

Re: Greeks Reject Bailout Terms

#117

Post by learnstats2 » Sun, Jul 05, 2015, 9:26 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…

> 18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. In return they had an agreement that greece would cut their spending.

OK, but the eurozone control the finances of the eurozone in a way which actively harms Greece's finances and economy.

What will happen if Germany or France have an economic downturn? We already know the answer to this: the economies of small peripheral countries are thrown under the bus to protect the major ones.

It should not be this way. If a country in the Eurozone is in trouble, they should be protected by the other countries sufficiently that they might be able to protect other countries, in turn, when the situation is reversed.

Re: Greeks Reject Bailout Terms

#118

Post by jwdunne » Sun, Jul 05, 2015, 9:27 PM UTC

atmosx wrote: post #98

paskster wrote: post #59

Earlier quoted context omitted.

I am very pro Euro. But I don't like the fact that a single country in Europe feels that 18 other countries have to pay their debt. These bailouts in the past were signed from the greece government in the best interest of its people. A lot of people make it seem that we (non-greece european) somewhat forced theses agreements onto greece. In fact these bailouts where were unpopular in Germany, because it cost us a lot…

> These bailouts in the past were signed from the greece government in the best interest of its people. What if a country destroys, literally, the entire continent killing around 80 million ppl, 70 years ago. What should we do with this country? Should show some solidarity and pardon it's debt or "abide to the rules" and ask them to pay their dues to all the countries they created damages?

I haven't down voted you because this has been on the tip of my tongue but I've held it back because it's such a low-ball response which achieves nothing. I think this whole "look at X" is why we're in this chaos. We can point fingers this way ad infinitum but it's only served to keep the EU in stalemate over this issue.

Re: Greeks Reject Bailout Terms

#119

Post by dia80 » Sun, Jul 05, 2015, 9:27 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 a bit more complex than the Greek's have spent too much money and expecting Germans to bail them out. This situation was an inevitability [1] given the Eurozone's make up and the political classes being in denial has worsened it.

[1] http://blog.mpettis.com/2015/02/syriza-and-the-french-indemn...

Re: Greeks Reject Bailout Terms

#120

Post by g4k » Sun, Jul 05, 2015, 9:28 PM UTC

Al-Khwarizmi wrote: post #83

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 (…

> The IMF themselves have said that Greek debt is unsustainable and a significant haircut is needed (although their head Lagarde ignores their analysts).

This is actually not true. Based on the 2nd bailout terms from 2012 Greece doesn't have to pay interest on the loans until 2023 and does not have to start paying them back for the next 27 years.