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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#161

Post by MagnumOpus »

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…

Your information, wherever you are getting it from, is faulty or at best years out of date:

The Troika indeed has made private creditors take much more than a "say 50%" haircut, in their second bailout package from the 21st of February 2012, the "Second Economic Adjustment Programme for Greece". The private creditors took a 53% cut in principal payments, a massive extension of the term and a reduction in interest rate - they lost maybe 70-75% of their money in present value terms.

And of course, if the Greeks would have been forced into default in 2010 as you demand, none of the subsequent €200bn+ Troika bailouts would have happened - the starvation would have set in 5 years earlier as the country would have had no chance to cover their primary deficits - even without debt repayments.

Re: Greeks Reject Bailout Terms

#162

Post by jessaustin »

pcrh wrote: post #105
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…

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

That's a result of the political process. The voters of some states feel that the federal government should take a certain amount of money from taxpayers and give it to the states. The voters of other states feel the amount should be substantially less. The legislators of the former must "bribe" the legislators of the latter, in order to get any legislative work done.

Re: Greeks Reject Bailout Terms

#163

Post by atmosx »

kedean wrote: post #115
atmosx wrote: post #98

Earlier quoted context omitted.

> 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.

There's no way any country in the world could keep up with troika's bailout terms given the damage these terms did to the economy.

The IMF already noted that the "plan" was wrong. Every single forecast was out by a huge margin, what exactly more do we need to die? Stop breathing?

WHat Varoufakis says is that we don't want money under terms the country can't honor, and the troika asks repeadetly for him to be removed. Maybe someone like Stournaras who signs any paper without asking questions would be more fit.

Re: Greeks Reject Bailout Terms

#164

Post by tptacek »

makeitsuckless wrote: post #157
tptacek wrote: post #126

Earlier quoted context omitted.

I wonder what the EU expected. How is this morally different from the fact that most of the other 49 US states pay for the debts of Mississippi? If we hadn't been doing it on a long-term continual basis, and MS ran its own economy, we'd be talking about "bailing them out". But life support to MS is the long-term normal in the US economy.

Does the term "sovereign nation" mean anything to you? Do you feel an obligation to pay for the debts of Greece? No? Then why would a German, or me as a Dutchman feel such an obligation?

No, but then my country is not part of a decades-long effort to unify the continent it resides on under a single financial and regulatory regime; we finished doing that roughly 150 years ago.

As a result, we don't have to "bail out" Mississippi so much as continually pay for its mismanagement.

And so, again, isn't "paying for mismanagement" part of what you sign up for when you try to unify Europe?

Re: Greeks Reject Bailout Terms

#165

Post by michaelt »

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.

Fiscal union - where there's central political control that can prevent countries from borrowing excessively - is one option.

Another proposal is 'eurobonds' [1] where there were two types of government debt. Blue debts would be backed by all the eurozone countries, but could only be issued up to a certain debt-to-gdp ratio. Beyond that, governments could issue red debts which aren't backed by any other country, and which come with an orderly default procedure.

That way, the Greek government would only enjoy the great interest rates the Germans get if they were following the same strict fiscal discipline - and red debt interest rates would reflect the fact they didn't have the German government standing behind them, so there wouldn't be a bunch of the cheap debt that Greek politicians seemingly can't resist.

Unfortunately this isn't a very popular proposal at the moment; if it had come out 15 years ago, when everyone had a clean slate and Greece didn't have all this debt, it might have prevented things getting to where they are now. But the proposals to institute this now basically amount to "give Greece a bunch more low-interest loans they can't pay back, but make Germany liable for them, and a while later when greece has spent all their eurobond money make their interest rates shoot up putting us back to where we are today" which Germany, quite reasonably, wasn't interested in going for.

[1] https://en.wikipedia.org/wiki/Eurobonds

Re: Greeks Reject Bailout Terms

#166

Post by arethuza »

alexandros wrote: post #137
tptacek wrote: post #73

Earlier quoted context omitted.

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.

Googled, "greece primary surplus". First result: http://www.forbes.com/sites/timworstall/2015/02/16/greece-st... Second paragraph, krugman quote: "Despite this catastrophe, Greece is making payments to its creditors, running a primary surplus — an excess of revenue over spending other than interest — of around 1.5 percent of G.D.P." How much did you look, and where are you seeing the opposite information on primary d…

The title of that article you have linked to is "Greece Still Has A Vast Problem; It Doesn't Have A Primary Budget Surplus"

Re: Greeks Reject Bailout Terms

#167

Post by tptacek »

huhtenberg wrote: post #160
tptacek wrote: post #126

Earlier quoted context omitted.

I wonder what the EU expected. How is this morally different from the fact that most of the other 49 US states pay for the debts of Mississippi? If we hadn't been doing it on a long-term continual basis, and MS ran its own economy, we'd be talking about "bailing them out". But life support to MS is the long-term normal in the US economy.

Greece effectively lied its way into the EU. It doesn't exactly leave much place for any moral appeals. [1] https://en.wikipedia.org/wiki/Greek_Financial_Audit,_2004

From what I've read, that appears to be a lie agreed upon: private banks in Europe had a major profit interest in securing speculative Greek debt.

Re: Greeks Reject Bailout Terms

#168

Post by jwdunne »

atmosx wrote: post #154
jwdunne wrote: post #118

Earlier quoted context omitted.

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.

You're free to down-vote me, I don't care :-) I can assure no hard feelings about it... I had expressed many unpopular opinions on HN and had been downvoted many times, never held me back from expressing my views. What I'm saying is that solidarity towards Germany was key in 1945. Now it's time to make a Marshall plan for Greece that will bring 'justice' to the country, fix our tax-system, etc. Every Greek would welc…

I agree with you in that Greece's debt does need to be substantially restructured because it's unsustainable. I just think the whole "setting of precedence" is what's keeping us fixed in the same place.

I don't believe that it sets any sort of precedence where everyone in the union can just not pay their debts. In society, we allow people to negotiate debt repayments in a way that isn't harmful to them and their families. People who can pay their debts and don't need this facility do so. That is the only precedent we should look at: if debt is unsustainable for individuals they are given the opportunity to restructure repayments in a way that is affordable to them without detriment to their life.

In Greece, this isn't what's happening. We see relentless spending cuts, stupidly high unemployment and a group of people who know what to do but are being told they can't do it.

That and I don't downvote based on something I don't agree with, I just wanted you to know I didn't downvote even though I don't agree with that approach, as much as I really want to. I use downvoting on comments without substance, especially ones that are overtly negative without substance.

Re: Greeks Reject Bailout Terms

#169

Post by pinaceae »

all those useless emotions.

simple facts can't be avoided.

nobody is willing to lend greece money besides the ECB. tsipras tried putin and china, both turned him down.

the greek-style of socialism (coalition with the extreme right notwithstanding) relies on foreign capital. once that runs out, it is over.

greece has never built up any robust, modern facets of statehood. there is no central database of landownership. parties act like clans, hand out positions based on loyalty, not merit.

it's a second world country that thinks of itself as the leader of the first world, as witnessed in endless, tiresome discussions with various greek representatives. they're all so smart, yet their economy doesn't produce shit.

spain, portugal, the eastern europeans all got their act together and worked out plans to move along. greece decided to call the people they're borrowing money from nazis and terrorists.

greece never qualified as a member to the EU, it was a historic mistake to accept them. grexit, now. let the rest of europe govern and prosper in peace.

Re: Greeks Reject Bailout Terms

#170

Post by calibraxis »

makeitsuckless wrote: post #157
tptacek wrote: post #126

Earlier quoted context omitted.

I wonder what the EU expected. How is this morally different from the fact that most of the other 49 US states pay for the debts of Mississippi? If we hadn't been doing it on a long-term continual basis, and MS ran its own economy, we'd be talking about "bailing them out". But life support to MS is the long-term normal in the US economy.

Does the term "sovereign nation" mean anything to you? Do you feel an obligation to pay for the debts of Greece? No? Then why would a German, or me as a Dutchman feel such an obligation?

I’m from the US and say hell yes, we should pay Greek debt. We supported their authoritarian governments post-WWII. (https://en.wikipedia.org/wiki/Greek_military_junta_of_1967%E...)

As for Germany... as Piketty told Die Zeit, Germany never repaid its debts and has "no standing to lecture other nations." They're hilariously wagging their fingers at far more responsible people. (https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...)

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