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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#271

Post by hibikir »

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.

The real Greek problem is not really government debt itself, but the private Greek economy. Even if all government debt was pardoned, straight up, they'd still be in trouble. The Greek government might have a lot of debt, but most of its obligations are not to servicing said debt, but to keep services running internally, and most of those expenses are paid to Greeks. If Greece had its own currency, inflating away some of those expenses becomes a viable strategy. Also, devaluing a currency means easier exports, more tourism, and more pressure to use products made at home, which means less money leaving the country.

All of those tools are used in countries with their own currency all the time. Monetary policies change to match the health of the economy. But in the Eurozone, monetary policy did not match what Greece needed, neither in their boom, or in their bust. Greece should have never, ever, joined the Euro, given how different their economy is from Germany. Unified monetary policy without a fiscal union doesn't make any sense.

The debate among economists is not whether Greece should have joined the Euro, but now that it's in, and in dire straits, if the very high cost of leaving the Euro is worth the advantages, or it's better to suffer yet a second consecutive bad decade trying to become competitive with Germany.

Re: Greeks Reject Bailout Terms

#272

Post by Amezarak »

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…

> But for somebody that actually had to go through austerity measures, I am not happy to see others asking for a handout, with the only justification being "just because, Greek history".

I am sorry. You should never have had to go through austerity either. We know better and we have no excuse for putting countries through austerity. The impact of austerity policies is obvious when you look at the countries in Europe so afflicted.

But that doesn't mean because you suffered, others must continue to suffer. We should do better.

Re: Greeks Reject Bailout Terms

#273

Post by scrollaway »

peterfirefly wrote: post #267
scrollaway wrote: post #257

Earlier quoted context omitted.

Varoufakis did not speak English when he said that. He said: "αυτό που κάνουν (οι πιστωτές) στην Ελλάδα έχει ένα όνομα: τρομοκρατία" In greek, τρομοκρατία is a much less loaded term than "terrorism", even though it translates the same way. It's more "terror campaign".

That isn't really any better, is it?

It has very different implications. In english speaking countries, "terrorism" / "terrorists" have become a placeholder for "really really bad guys who can't be reasoned with who want to steal our freedom and kill our children", thanks to US propaganda.

The word "terrorism" in its more original form is ruling by fear and it can mean many things, such as being given power because the population is afraid of what you might do if you don't get what you want. "Terorrism", by contrast, is a massively politically loaded word for a completely black & white "good vs evil" world.

Re: Greeks Reject Bailout Terms

#274

Post by peterfirefly »

kansface wrote: post #66
dantheman wrote: post #34

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. Overall, I agree - greece needs to get its house in order and that involves making tough decisions, cutting jobs, lowering benefits, etc. They don't have the revenue to support the quality of life that they want to provide.

They have ~25% unemployment - over 50% for youth... it seems like they already did plenty of that.

Actually, no. Their labour market is extremely rigid, which is precisely one of the things that everybody wants them to fix -- and what they don't want to fix.

Re: Greeks Reject Bailout Terms

#275

Post by codexjourneys »

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…

The problem is that you aren't considering second-order effects.

Is it better for Greece to give up the euro and return to the drachma? Quite possibly. Iceland successfully rebooted its economy after the financial crisis (with a lot of pain involved) because it was not tied to the euro. Of course, that required a huge amount of willpower and effort (which Greece has not shown yet).

Is it better for the EU and the rest of the world for Greece to give up the euro and return to the drachma? Probably not. Why? Because it sets a precedent for giving up the euro and/or leaving the EU.

Greece is a relatively small country, and the upheaval resulting from its financial recalibration could be fairly manageable.

If Spain or Italy tries to go down the same road, it is a different story. Take a look:

http://www.bbc.com/news/business-15748696

Italy owes France a LOT of money. France owes the UK a lot of money. The UK owes the US and Germany a lot of money.

Greece, as you can see, is a drop in the bucket. It's the precedent that's important.

Re: Greeks Reject Bailout Terms

#276

Post by seingen5 »

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…

Let me guess...

You're not into the economy thing, are you?

Because even the most amateur scholar of economics is able to understand that having Greece within the eurozone has helped Germany's exports by about 80-90 billion (can't get the source now). Right now, even the UK would rather have Greece on its own currency, so that the euro will be strenghened and UK will be in a position to ease its exports.

And btw, you cant't really believe that you have given money to Greek citizens, money that otherwise would be in the pockets of german citizens. There's a thing called "banks".

Since you are German, act like it, and do some research.

Re: Greeks Reject Bailout Terms

#277

Post by MaysonL »

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…

Remember Germany's history of debt forgiveness and non-forgiveness. Don't know about it? Look at the treaty of Versailles, and John Maynard Keynes's polemic against it. Also look at the Marshall plan, and the debt forgiveness of 1953. And then consider how you want Greece to be treated. And consider how Portugal, Spain, Italy, France, and Germany should be treated when they run to big a deficit. Also read this post (unless you are extremely annoyed by vulgar language): http://www.interfluidity.com/v2/5965.html

Re: Greeks Reject Bailout Terms

#278

Post by orbifold »

michaelt wrote: post #182
tptacek wrote: post #164

Earlier quoted context omitted.

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"

Plenty of politicians in fact do talk about a United States of Europe and it is an ideology that is instilled in future elites to be in political scholarship programs etc.

Re: Greeks Reject Bailout Terms

#279

Post by Amezarak »

derriz wrote: post #100
agounaris wrote: post #42

Earlier quoted context omitted.

You don't speak for the people of Europe. The Eurozone deals will never help Greece recover...I just assume you didn't read the proposals. Anyway it's amazing that still some German naively believes that the problem is the "spending" of money.

The Eurozone loans helped my country (another EU country which went bust in the GFC) recover. They allowed a "soft landing" in correcting government deficits. Of course it entailed new unpopular taxes and cutting government spending but most people are grateful that the country did not have to experience economic Armageddon - unfortunately it looks like Greece is about to experience this.

> hey allowed a "soft landing" in correcting government deficits. Of course it entailed new unpopular taxes and cutting government spending but most people are grateful that the country did not have to experience economic Armageddon - unfortunately it looks like Greece is about to experience this.

There isn't a single EU country where 'correcting government deficits' with taxes and spending cuts helped the economy.

You'd have been better off without austerity. The reason the Greek situation is now so terrible is exactly because of the austerity measures. They caused the 'economic armageddon.' Count your blessings that the austerity in most EU countries was not so bad, though in most of them GDP never has recovered and unemployment is in the low double digits.

Not exactly a miracle story. Compare with the US, which managed a tepid stimulus.

Re: Greeks Reject Bailout Terms

#280

Post by tptacek »

alexandros wrote: post #261
tptacek wrote: post #255

Earlier quoted context omitted.

That was 2014 . In 2015 they're apparently tracking towards an actual primary deficit. The point of discussing the 2014 and 2013 numbers is to rebut the notion that Greece had somehow found stable footing, and were being victimized by punitive negotiations from the troika. I didn't introduce that idea to the thread, but I did object to it.

Yes, I think you will concede that 2015 is not a year to use for forward projections. The country has been paying loans without external help, the uncertainty means no investment incoming, tourism is hit, and people in the country are withdrawing cash from the banks and hiding it in their houses, not spending it. As for the punitive Troika, they had 5 years to run the country and they failed in every single projectio…

Why would I concede that? 2015 Greece has begun privatization and should be feeling the impact of other reforms started in the preceding years. We're only talking about primary budgets, not debt service. Why would I think Greece in 2015 would have poorer intrinsics than in the preceding years?
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