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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#201

Post by tracker1 »

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.

This is because the EU is setup as more of a confederation (pre-constituttional U.S. or even early constitutional U.S. prior to 1830's)... and EU nations maintain a lot of their independance. Also, many states are feeling a crunch on their federal funding, which I think is an entirely separate issue in the way things are structured myself.

The U.S. also, historically speaking fought a very bloody civil war to keep states in the Union... (first rule of U.S. club, is you can never leave/quit U.S. club). Where as EU's history of unity/separation even in the last two centuries is very different. It's mostly a cultural difference.

That said, I wouldn't mind seeing a bit more assertiveness to state level governments in the U.S. ... even though I don't agree with typical politics in, for example, Texas, I appreciate their assertiveness in recent years.

Re: Greeks Reject Bailout Terms

#202

Post by vacri »

beloch wrote: post #74

A Greek friend once told me that, in Greece, "only idiots pay 100% of the taxes they owe". His perception of his fellow Greeks' attitude towards taxes wasn't wrong. In Greece, tax evasion is endemic. https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_... It's hard to be surprised by the financial troubles of a government that is so utterly feckless when it comes to collecting taxes that members of it's own f…

I have also had a Greek friend tell me, well before this crisis started, that tax avoidance was almost a national sport in Greece, and there was a social stigma to paying all your taxes. He said it with a mixture of pride and sadness.

Re: Greeks Reject Bailout Terms

#203

Post by izacus »

spdy wrote: post #104
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 conf…

I very much doubt anyone believes that Greece will repay their debt (even the IMF report was very clear about it). I also very much doubt other EU members would oppose erasure of debt / severe refinancing if Greece would prove that they're able to curb their deficit (after all, that's exactly what happened in Ireland).

Re: Greeks Reject Bailout Terms

#204

Post by codeshaman »

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 reflects my opinion too.

Now as I write this, I realise how totally lost everyone is in this matter. We can only have an opinion, I doubt anyone actually understands what the hell is going on and what to do next.

There's the financial situation, the historical wounds, the pride, the desperation, the fear, the two sides of the coin. And also the freaking heat wave that's scorching us here in Europe.

Many Europeans blame the "lazy" Greeks, Greeks blame the "heartless" Germans, what I've been noticing is a ridiculous amount of million dollar yachts in the ports of Europe.

So maybe that has anything to do with it ?

Re: Greeks Reject Bailout Terms

#205

Post by alkonaut »

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?

The reason the U.S. economy can work at all is because people in the union accept large continuous transfers of money from rich to poor states.

For the Euro to work, the rich member countries must be willing to accept massive transfers from countries like France and Germany, to the Mediterranean countries. In addition, the ECB must be a lender of last resort.

Seeing as none of these criteria are currently (formally) met, the Euro can't function. The only way it could work was if the economies of the member states quickly converged. They didn't.

Re: Greeks Reject Bailout Terms

#206

Post by alexfernandez »

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 video is interesting, but I find it opinionated, neo-liberal, US-centric and conclusion-driven. It raises more questions than it answers: if Greeks are not paying their taxes, why would raising those same taxes help anyone? Why should Germans and French pay the Greek debt, if not to repay loans to German and French banks? How can a government bribe its whole population with borrowed money, and who is lending that money? Isn't it irresponsible to lend to countries in those terms, and shouldn't the lenders lose that money? Why would these losses cause a default in foreign economies?

Also, most of its facts are messed up: the US subprime mortgage crisis did not cause the crisis via a Spanish real-state market collapse, it just tightened credit and ultimately deflated public banks (cajas de ahorro) which have hidden political spending for several decades, and which have cost billions in the last few years. This is well documented, just as a data point: Bankia was bailed out for $29B http://content.time.com/time/world/article/0,8599,2115950,00....

The problem with Government spending cuts mandated from the outside is that they all go to health and education, instead of cleaning up the layers of bottom-feeding politicians and friends which have occupied most public companies and which are devouring the economy. The Spanish competition regulator estimates the cost of corruption in about €48b: http://www.elconfidencial.com/empresas/2015-02-10/la-cnmc-ci... (in Spanish, I found no good source in English). I can imagine that in Greece the situation will probably be similar or worse, it would be nice to have credible figures. Meanwhile inequality soars in Spain, and the number of millionaires increases: http://www.theguardian.com/world/2013/oct/10/spanish-wealth-... http://elpais.com/elpais/2015/05/21/inenglish/1432203309_060...

Any analysis which doesn't take into account these factors is superficial and will never reach the true causes. A shared fiscal policy would make European policy less transparent and easier to manipulate by the elites, unless it was accompanied by deep reform in all European institutions, which is highly unlikely. Revising the role of the ECB is much more interesting IMHO.

Re: Greeks Reject Bailout Terms

#207

Post by ZeroGravitas »

mnglkhn2 wrote: post #67
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 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…

A bunch of Americans did decide that, and just let the banks seize their houses rather than pointlessly make payments that they couldn't meet long term on underwater mortgages.

The Greek position is relatively similar. There is blame on both sides of such a loan, and more for the banks if the number or size of these loans threatens their very business when people default.

Re: Greeks Reject Bailout Terms

#208

Post by minot »

izacus wrote: post #184
jessaustin wrote: post #122

Earlier quoted context omitted.

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.

Moreover, for Greece to be a viable destination for export markets, they will need to place significant penalties on importing anything for consumption at all. Of course, rising food cost is more alarming than high import duties but it seems that taxes on import for consumption are very likely.

The rhetoric against austerity seems to be that we don't want to hurt the people (especially the economically disadvantaged) but I don't see a bright future in the near-term whichever way the Greeks vote. (I know, this is such a terrible thing to say. Good thing I am not in politics.)

Re: Greeks Reject Bailout Terms

#209

Post by tomp »

mnglkhn2 wrote: post #133
tomp wrote: post #123

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. The better analogy is the handling of "deadbeat dads" who don't pay child support. The government's response is to confiscate their drivers license. It doesn't require a genius that then they really won't be able to pay child support. At least in the case when non-payment w…

I agree with your point. And it is true that the austerity measures have hit the most vulnerable in the society. But I found it problematic to maintain that the whole Greece is made of "deadbeat dads", my point being that the Greek elite is not shouldering their part of the recovery effort.

> But I found it problematic to maintain that the whole Greece is made of "deadbeat dads", my point being that the Greek elite is not shouldering their part of the recovery effort.

I didn't mean to imply that. The only similarity I was relying upon was non-payment of their legal obligations.

Re: Greeks Reject Bailout Terms

#210

Post by elorant »

paskster wrote: post #59
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.

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…

So you have no problem with ECB spending at least one trillion to buy national bonds (including yours) but you do have a problem with writing off a portion of the Greek debt. And why exactly is that?
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