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Greeks Reject Bailout Terms

nytimes.com

181–190 of 412 posts

Re: Greeks Reject Bailout Terms

#181

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…

Wow the amount of ignorance in this comment is staggering. Many countries have deficits for decades. Greece’s debt ballooned once we entered the Eurozone. From the hundreds of billions given as loans less than 20% went to our economy. Most were used to bailout EU banks, namely French and German ones. Greece never lived up to the agreement? Then how on earth did our GDP fall by 30% in five years? How come unemployment…

"Greece’s debt ballooned once we entered the Eurozone"

It ballooned because when you entered the euro your country was now able to acquire and spend much more debt then before.

Re: Greeks Reject Bailout Terms

#182

Earlier quoted context omitted.

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?

European politics is funny - EU treaties talk about "ever closer union" and the Euro was deliberately designed with no exit mechanisms; but at the same time politicians never talk about forming a "united states of europe" as it's deeply unpopular with voters.

In other words, if you ask whether the EU aims for a single financial and regulatory regime the answer is "yes and no"

Re: Greeks Reject Bailout Terms

#183

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:…

The banks that loaned the money for those "mortgages" are counting on being payed back. If they aren't, they might go bankrupt, causing a financial crisis. Or, they might start lending a lot less , or call in their loans early, putting the squeeze on others, including other banks, causing a financial crisis. And a financial crisis affects everyone. You are nothing to a bank, a bank is huge, and fully expects some peo…

But everything you're saying would apply whether Greece was on the Euro or the Drachma.

Yes, an entire country defaulting would screw a lot of creditors, but the risk of default should be priced into the loan/bond terms (interest rate, etc). That's part of the reason investors can make money on bonds, because there is a risk/reward curve they're riding, and the risk is that they won't get their money back.

I get the "too big too fail" argument, I just don't get the "monetary union puts us on the hook for our neighbors" part.

Re: Greeks Reject Bailout Terms

#184
post #92

Earlier quoted context omitted.

> 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. Serious question: Why do you think switching currency to Drachma will solve anything? From what I've heard and read, Greece can't spend its way out of this problem because it lacks trust among creditors.

They won't follow Capt. Germany's (self-serving) rules, so they'll be kicked off the euro boat. Right now some might imagine that life will go on as before, but the simple physics of buoyancy will mean they'll have to start swimming eventually. But... there's nothing wrong with swimming! Sure, the drachma will plummet against the euro, dollar, etc. So no one will be able to afford an iPhone. But their factories, farm…

The problem is that Greece imports about 50% of their food (and several other goods), so the consequences of drachma are going to go way above expensive iPhones - the food prices will surge, hurting the poorest the most.

Re: Greeks Reject Bailout Terms

#185

Earlier quoted context omitted.

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.

Not even close, Delaware, Minnesota, and Illinois are the top 3 that get the least back from federal taxes on a per dollar basis.

http://www.theatlantic.com/business/archive/2014/05/which-st...

California is almost parity for dollars in versus received.

The bigger question is if that is even a valid comparison to make that 14 states get back less in federal dollars than input.

If it is then you'll have to concede that Wyoming, Kansas, and Utah, aka: decidedly not blue states, are in the same boat as "we blue states".

I grew up in one of those states that is in the top 5 of dollars received. Main reason is the entire state has next to no population. I'm not sure how you get it to parity without a population to do so. That and despite being quite liberal, I have to admit this argument that this is a blue versus red state thing based on dollars received is maddeningly annoying and disingenuous.

If America loses those red states, we lose a lot of our ability to feed ourselves on our own. The grain belt is a huge asset, even given its cost. Giant cities are not islands unto themselves.

/squirrel banter mode off.

Re: Greeks Reject Bailout Terms

#186

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…

> This approach creates a more unified country because people are able to make their own decisions and live with them. I don't know why you would assume that: There's a whole host of tensions that come with decisions made at the state level. Reciprocity is a huge one that comes up semi-frequently (for example with firearm laws). > People are able to move within the country to states with policies more in line with th…

> This approach creates a more unified country because people are able to make their own decisions and live with them. >>I don't know why you would assume that: There's a whole host of tensions that come with decisions made at the state level. Reciprocity is a huge one that comes up semi-frequently (for example with firearm laws).

There are and those get to be negotiated and worked out. The tensions arise, such as with firearms laws, because states don't see eye to eye on those issues so they get to dictate exactly how things work in their own states. That is entirely the point. Firearm laws are a great example because just because I might wish your state did things differently...it's not my state and therefore I don't really get a vote.

> People are able to move within the country to states with policies more in line with their own views. >>"Just move" is an ok answer if your beef is, say, with Oregon's gas pumping laws.

"Just move" becomes a much more difficult proposition when your beef is with the entire country. I have neighbors who moved their kids out of Colorado as soon as marijuana was legalized. That was a choice they were able to make with a policy they disagreed with.

>>It's a really awful answer if your problem is that your state allows "separate but equal" bathrooms for black people. Those suffering at the hands of those extreme policies are also the least likely to have the means to move.

The extreme example counter response is never far behind in political discourse. Civil rights / human rights issues are a different ballgame and those absolutely are things that need to be resolved at the federal level. There's a whole host of other policies that don't though.

> States have to have balanced budgets >>I don't know why you think that. State budget crises aren't unknown or even all that uncommon.

They are crises because they have to be balanced. That is the point. If your state's budget doesn't work there are furloughs, layoffs and immediate budget cuts to balance it. At the Federal level that doesn't happen unless Congress fails to pass ANY budget regardless of whether it's balanced.

> There's a push in this country lately to do everything at a Federal level though >>Because for most of the history of the United States, human rights issues have only been resolved at the federal level. Slavery, segregation, women's suffrage, and same-sex marriage have all been framed as "States Rights" issues.

Again, above answer applies. Those ARE the issues that are Federal issues. There's a wide gap between those issues and virtually every other policy in the country being effected by a broad reading of the interstate commerce clause.

Re: Greeks Reject Bailout Terms

#187
post #84
post #54

Earlier quoted context omitted.

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 readi…

They also have a bad record on actually collecting taxes due. Tax Evasion is at 6% of GDP which is considerably higher than similar economies.

Re: Greeks Reject Bailout Terms

#188

Earlier quoted context omitted.

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/th…

You can't drop the mic on "Germany never paid the debts the Nazis racked up", because Germany is not insolvent, and Greece is. Greece has not only a large national debt, but also an ongoing primary deficit. It literally cannot pay for the public sector it commits itself to running. What that implies to external financing negotiations is that even if Greece's debt is forgiven (economists from across the spectrum seem…

You responded 2 mins after I posted. Did you read the Die Zeit interview with Piketty which I linked to?

What do you think about points like: "I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history. [...] Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe."

Or how about the fast way for a state to leave delinquency: "Germany proved it in the 20th century. Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief."

Have you read David Graeber's book which he recommends elsewhere ("Debt: The First 5000 Years") which covers how debt is just a promise, and it's fetishized (more than say promises from politicians to their constituents) when it's a promise from the weak to the powerful?

Re: Greeks Reject Bailout Terms

#189

Earlier quoted context omitted.

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…

Worth noting that "Greece accounts for less than half a percent of German exports" http://www.reuters.com/article/2015/07/01/eurozone-greece-in...

The poorer Euro countries keep the Euro down which is critical to Germany maintaining their high export levels. If the Germans were still on the Deutschmark they would not be the export powerhouse they are now.

Re: Greeks Reject Bailout Terms

#190

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…

Regardless of who's at fault here, and regardless of several wrong points you've made, what people need to realize is that when attempts have been made, when whatever asked has been materialized, and yet no solution is visible, then something needs to change.

There's just this something that I can't help but add. There isn't a single country that has received more debt relief in modern history than Germany, but for a reason people seem to forget that. It's possibly because of that that you are now present. If one were to continue this would turn into some sort of debate/argument of you-did-that so I do-this. No, this isn't (again) about who's at fault, it's about realizing what is actually doable and what isn't and acting based on that. It's about not repeating a paraphrased form of history as we know it, which we so happily seem to indeed be doing.

Edit: Learning how to separate paragraphs.

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