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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#191

Post by izacus »

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.

Note that plenty of countries receive EU funds as well (they're usually called net receivers) which is comparable to what you're talking about (see EU budgethttp://www.theguardian.com/news/datablog/2012/jan/26/eu-budg...).

The Greek case of lying and spending way beyond any reasonable means does not compare to it.

Re: Greeks Reject Bailout Terms

#192

Post by mnglkhn2 »

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…

The reason the Marshall plan was put in place for Germany was to stop the Russians getting the upper hand in Europe. The choice was between letting Europe become a communist utopia or help the Germans and hence keep EU in the western world. Nothing in geo politics is done out of the goodness of our hearts but for a clear ideological purpose.

Re: Greeks Reject Bailout Terms

#193

Post by chuckcode »

Pretty amazing lack of leadership on all sides to let this degenerate into a game of political chicken with no good endings for anyone. Clearly the Greeks were going to have an exceptionally hard time paying back their debt and certainly the Germans who were in a similar situation after WWI should have realized the depth of the problem [1]. Anyone who honestly thought that the situation would get better under the austerity program despite all economic history to the contrary should have realized a couple years in that it wasn't going to work. After a few years the debts would be even more difficult to pay after Greek GDP shrunk by 25%[2].

From my personal it seems like if Europe had really wanted to help Greece tackle their debt they should have used the crisis to change Greek laws to make it easier to start and run a business there. Currently Greece is by far the hardest country in the Euro currency to run a business as it ranks just before Russia (61 vs 62) in the World Bank's "Ease of Doing Business Index"[3]. The other economies that are held up as examples of recoveries like Iceland and Ireland rank 12 and 13 respectively.

Having a monetary union without a political union is a questionable undertaking in general [4]. Given that the leaders of Europe know that they should either be working to get closer to a political union with similar laws and workings or looking for a way to gracefully exit economies that aren't working out. The current approach of bashing Greece with no real alternative to grinding economic suffering seems like the worst sort of denial about the reality on the ground.

[1] https://en.wikipedia.org/wiki/Treaty_of_Versailles [2] http://www.slate.com/blogs/moneybox/2015/02/18/how_bad_is_gr... [3] http://data.worldbank.org/indicator/IC.BUS.EASE.XQ [4] http://www.euro-know.org/europages/articles/rmu.html [5] http://www.theatlantic.com/business/archive/2014/05/which-st...

Re: Greeks Reject Bailout Terms

#194

Post by alkonaut »

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…

Terms for new loans should of course include measures for improving the economy, but austerity never will. The last few years have shown (again) that austerity will only ever contract an already stressed economy.

A reasonable deal should be a stimulating one. Not one with just spending cuts. A major haircut of existing debt, and enough new money flowing in to actually stimulate growth.

There are no good options here. It's not like Greece will return to the Drachma and become a picturesque olive exporting tourist attraction. What will happen is that the following decade of poor economy will see extremists and Putin run the country. From a democratic and security perspective it's likely the lesser evil to just support the Greek economy. Those of us in the rest of Europe (not least in Germany) have made good money from having an artificially low interest rate for years, at the expense of the PIIGS countries.

Re: Greeks Reject Bailout Terms

#195

Post by elorant »

revanx_ wrote: post #181
elorant wrote: post #176

Earlier quoted context omitted.

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.

And as much it was our fault to borrow money like there was no tomorrow it was ECB’s too that looked the other way.

Re: Greeks Reject Bailout Terms

#196

Post by walshemj »

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.

But the USA is one country the EU is not

Re: Greeks Reject Bailout Terms

#197

Post by lifeisstillgood »

tptacek wrote: post #116
trhway wrote: post #106

Earlier quoted context omitted.

>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.

kinda... Yanis and tsiprias have been consistently clear - any deal must include debt restructuring. No sane person wants more debt looking at Greece's repayments levels, especially after 2020.

The "No" vote, to my understanding, strengthens their demand to have whole debt restructuring included in this deal - not put off till later.

Edit: this is a "strengthened hand", but subtly different to using that hand just to get more cash / debt. The ECB is like my bank manager wanting to give me an overdraft so I can make my mortgage payments so he does not have to foreclose. I want to have all debts up for discussion, he just goes on about overdrafts.

It is forcing the EU to face up to the realities of a single currency and fiscal union. But at least it is a democractic approach...

Re: Greeks Reject Bailout Terms

#198

Post by tptacek »

calibraxis wrote: post #188
tptacek wrote: post #173

Earlier quoted context omitted.

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 situa…

Before responding, I skimmed the Piketty interview to verify that he was, in fact, talking about Germany's war debt, and not debt generated through insolvency.

I'm not moralizing debt. I am, however, according sovereign states and their constituent organizations the agency to decide whether or not to finance other sovereign states.

However much honor you accord to debt service, the prospect that (expensive) debt forgiveness will simply generate the need for more debt forgiveness in the future is actually material to the question of how to finance Greece.

(I am, in this instance, parroting something Tyler Cowen wrote yesterday; not that I agree with Cowen on everything [I'm not a libertarian].)

Re: Greeks Reject Bailout Terms

#199

Post by makeitsuckless »

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 whole point of the EU project was to make us all "Europeans"

Constantly repeating the lie doesn't suddenly make it true.

Also, trying to force people who prefer to remain sovereign and independent (and maybe most of all: democratic) is not a good recipe for a future without "disastrous fighting between states and people".

Quite the opposite.

Re: Greeks Reject Bailout Terms

#200

Post by NotableAlamode »

MrBuddyCasino wrote: post #138
NotableAlamode wrote: post #70

Earlier quoted context omitted.

The transfers to greece of the last few years were to a large extent a way of transferring private debt of german and french banks to the general EU populace. This is just not the case. Only about 1/3 of the bailout money went this way (and certainly not to the "general EU populace", only to some european tax payers). The remaining 2/3 went to Greek consumption in some form or other. It is estimated that 1/3 of the b…

I'd be very interested in sources for this.

Sinn, Hans-Werner, "The Greek Tragedy", CESifo Forum 16 Special Issue 2015 (June), 2015, 5-35, downloadable from

https://www.cesifo-group.de/de/ifoHome/publications/docbase/...

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