Greeks Reject Bailout Terms • Hacker News Board

Re: Greeks Reject Bailout Terms

#231

Post by aikah » Sun, Jul 05, 2015, 10:45 PM UTC

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?

> Does the term "sovereign nation" mean anything to you?

Does the term European Union mean anything to you? Does the term common currency mean anything to you? If Greece fails, Do you really think Germans won't suffer any consequences?

Re: Greeks Reject Bailout Terms

#232

Post by tptacek » Sun, Jul 05, 2015, 10:49 PM UTC

alexandros wrote: post #211

arethuza wrote: post #166

Earlier quoted context omitted.

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

Nobody says Greece is running a surplus today. It has been paying loans for a year without external assistance. Plase read the thread and what I was responding to.

That seems to depend entirely on who you ask. Greece claims to have run a 2014 primary surplus. The EC and ECB appear to recognize a smaller 2014 surplus (smaller than Greece claims).

But IMF's most recent review suggests that there was no surplus: Greece had been counting privatization revenue (ie: the sale of utilities, ports, and airports) --- which they technically weren't supposed to, and those revenues turned out lower than Greece had projected. Further, Greece had accumulated additional liabilities from pensions and tax refunds than they'd apparently stated when they announced their surplus.

If you're not running a primary surplus, it's hard to see how you're paying loans without external assistance. Can you help me understand that claim a bit better?

Re: Greeks Reject Bailout Terms

#233

Post by dang » Sun, Jul 05, 2015, 10:49 PM UTC

ypcx wrote: post #63

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 is staggering how brainwashed you are. Please try to form your opinion elsewhere than from the mainstream media.

Personal attacks are not allowed on HN, even when someone is wrong.

Re: Greeks Reject Bailout Terms

#234

Post by Symmetry » Sun, Jul 05, 2015, 10:52 PM UTC

minot wrote: post #92

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.

> 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.

So, right now Greece is living beyond what it can sustain. To go forward Greece need to be both more productive and cut its standard of living somewhat. Unfortunately fixing this in a straightforward way is hard. You have a lot of confusion and bargaining around who has to experience pain and it probably won't be distributed evenly if left to itself. And because of sticky wages/nominal loss aversion efforts to reduce people's pay in nominal terms tends to cause unemployment[1] which means that the pain in even worse.

Enter inflation. It sucks, obviously, but it's a great way to spread the pain around evenly between workers, pensioners, and creditors. And it doesn't cause unemployment. It causes a bit of additional pain through things like menu costs but that's small potatoes compared to everything else happening.

Of course this is all presupposing a carefully calibrated monetary policy. It worked great for Iceland but I'm not sure I'd trust the current crop of Greek politicians not to give into the temptation to print themselves out of debt. That way lies hyperinflation.

EDIT: I tend to think it would be good if the Euro zone could be dissolved somehow and it would probably be good for Greece in the long term to leave. However, I'm not at all convinced that in practice the "no" vote will work out well for Greece or anybody else over the next decade or so.

[1]http://econlog.econlib.org/archives/2013/09/why_dont_wages.h...

Re: Greeks Reject Bailout Terms

#235

Post by minot » Sun, Jul 05, 2015, 10:52 PM UTC

jessaustin wrote: post #224

minot wrote: post #208

Earlier quoted context omitted.

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)…

Wat? Why would they care to be "a viable destination for export markets"? Why would they care whether there are still some rich folks around who want to buy iPhones? Things like this make me wonder where people got their economics education. I hope I really misunderstanding something here. Yes high food prices are a problem but without tyrannical corruption like we see in Egypt this problem fixes itself over time. "A…

Sorry, I mean export-oriented industries. I apologize for the lack of clarity in my expression.

Re: Greeks Reject Bailout Terms

#236

Post by tptacek » Sun, Jul 05, 2015, 10:53 PM UTC

calibraxis wrote: post #218

tptacek wrote: post #198

Earlier quoted context omitted.

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 forg…

Debt is fundamentally about morality. Otherwise everyone would accord Greece the agency to shrug and ignore it, like politicians break promises to consituents, or big companies ignore their debts to smaller ones. Instead, children worldwide are condemned to misery ("austerity"), because of moral statements like "you have to pay your debts". Though they did nothing to deserve it. As for Greece's finances, that's exact…

You're dodging my point.

Greece isn't simply arguing that, morality being relative and all, they've decided not to pay back their debts.

They are demanding more money from their creditors. It seems like they have to: they're running a primary deficit; they're losing money even before you take debt service into account.

Whatever the moral dimension of paying back their debt is has nothing to do with the question of whether Germany (ie, the EC) or the IMF (to whom Greece just defaulted) or the ECB (which doesn't want to be in this particular lending game to begin with) is going to give them more money.

If Greece can't persuade the EC, IMF, or ECB to lend them more money, it's doesn't look like they can just walk away from this whole scenario. "Oh well! Debt is just politics and morality!" That might be true, but if they want to allow people to retire in their early 60s, or pay half the nominal tax rate, or not regressively tax the poor through punishing VAT increases, they're going to need to convince someone in the world of some kind of compatible morality, right? They require additional financing, don't they?

Re: Greeks Reject Bailout Terms

#237

Post by woodpanel » Sun, Jul 05, 2015, 10:55 PM UTC

Ahh, the nytimes. If there are two biases the NYT is guilty of, then its being stubbornly progressive and subconsciously anti-German.

Take this for example: "... financial carpet bombing. The European Central Bank severely limited financial assistance to Greek banks, ... making it hard for retirees ..."

Calling it "financial assistance" helps in framing it as an assault on a guaranteed right the Greek Banks have. Especially if it's something that was "severly limited" by that evil Frankfurters.

I know perspectives fluctuate quite heavily from country to country. It is actually the reason why I read as broad as possible (including NYT) to get to know a possible different viewpoint on pending issues.

But the american progressive view on the Greek-Bailout-topic is so much flawed that I might call it derailed. It is not simply flawed by ideology but that ideology also decides what details are to be amplified over the distance-caused resistance. And more importantly, that ideology decides what details are not to be amplified.

The ECB is still lending money, it is just not legally allowed to issue new credits (credits are what those "financial assistances" really were) to a benkrupt country. And the whole american-progressive story of Germany/Rich-Europe enslaving the poor Greeks is just as stupid as the european-progressive story of America enslaving the third world. The world is not that simple to just blame everything on the fat cats.

And actually those uninformed progressive world-views (wether it be european progressives judging american foreign policies toward third parties or vice-versa) bear something deeply anti-progressive in them: framing a whole nation evil, accepting illiberal leaderships as long as they are anti- and often calling for harsh intervention.

Or in the case of the Greferendum: Making it a progressive virtue, that nation A's tax €s utilization ought to be decided by nation B's voters.

Re: Greeks Reject Bailout Terms

#238

Post by ssalazar » Sun, Jul 05, 2015, 10:56 PM UTC

calibraxis wrote: post #125

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…

Greece among others pardoned your Nazi debts and reparations in 1953, helping you rise. Greeks did nothing so terrible to "owe a debt". You owe them a debt which is far stronger than promises ("debt") held by investors, part of which was from the dictatorship and therefore odious debt. Piketty: "When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repai…

Pffff ridiculous. Can we starting calling this the Godwin's Law of economics? Economic policy intended to rebuild an entire continent after the most traumatic conflict in its history is necessarily going to differ from policy during times of peace.

Re: Greeks Reject Bailout Terms

#239

Post by bodyfour » Sun, Jul 05, 2015, 10:57 PM UTC

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.

Yep, exactly.

Also much of anger on the street has been due to lower living standards (euphemistically referred to "internal devaluation") So a true devaluation via an independent drachma won't go over well either.

Of course, the rich keep their money far away from Greece. It's the masses who will suffer.

Worse, any political instability will cause more problems for their critical tourism industry.

Re: Greeks Reject Bailout Terms

#240

Post by alexandros » Sun, Jul 05, 2015, 10:58 PM UTC

tptacek wrote: post #232

alexandros wrote: post #211

Earlier quoted context omitted.

Nobody says Greece is running a surplus today. It has been paying loans for a year without external assistance. Plase read the thread and what I was responding to.

That seems to depend entirely on who you ask. Greece claims to have run a 2014 primary surplus. The EC and ECB appear to recognize a smaller 2014 surplus (smaller than Greece claims). But IMF's most recent review suggests that there was no surplus: Greece had been counting privatization revenue (ie: the sale of utilities, ports, and airports) --- which they technically weren't supposed to, and those revenues turned o…

First, as long as you're retracting your original statement about 8-10% deficit, we're good. I'm not going to argue 1.5% down or up.

Nobody's talking about paying the loans and keeping the country going without help.

What people are saying is that Greece can support itself, minus the loans.