Open letter to German readers: What you were never told about Greece
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Re: Open letter to German readers: What you were never told about Greece
#2The title of the letter in the German newspaper was (translated) 'fiscal water-boarding'.
Re: Open letter to German readers: What you were never told about Greece
#3What isn't addressed in this letter and most people don't realize is that the Greek debt as an absolute number isn't that big.
The real problem is that Greece needs more money to continue operation than it produces, and this fact hasn't changed nor will in the near future. Effectively this makes Greece a black hole for incoming money where incoming money have no actual benefit for anyone other than just keep a near-corpse alive for a little more.
If there was a surplus generated every year, the debt amount wouldn't matter as it would be paid off eventually.
The whole point is to get to the state where the economy is healthy as a yearly in/out amount. If that's done there is no reason to get any bigger loans...
Edit: Forgot to add: it's in the greater interest of the eurozone to keep Greece from bankruptcy though, and it's twofold: one is the interconnection of markets, ie Greece IS a buyer, and the second is the geography as Greece is a central node for shipments from the east, has natural gas reserves etc..
Re: Open letter to German readers: What you were never told about Greece
#4tldr; Instead of taking new loans and servicing our existing debt, we'd like new loans and NOT have to service our existing debt.
EDIT: To those responding "he didn't ask for loans" in the last line he's asking for a "European New Deal"... what else could that be besides new loans or a straight-on gifting of more money?
Re: Open letter to German readers: What you were never told about Greece
#5Tsipras' spoken english is very limited, it is unlikely he wrote this himself.
Re: Open letter to German readers: What you were never told about Greece
#6Tsipras' spoken english is very limited, it is unlikely he wrote this himself.
It was probably translated from Greek, why is it a problem?
Re: Open letter to German readers: What you were never told about Greece
#7Tsipras' spoken english is very limited, it is unlikely he wrote this himself.
No politician ever writes their own Op-Eds, for any publication. That's what their staff, freelance ghostwriters, and political think tanks are there for.
Re: Open letter to German readers: What you were never told about Greece
#8Sure. I agree that (morally) the EU shouldn't have bailed out Greece. Greece cooked its books and Greek debt holders at the time of the bail out were suffering the consequences of lending to a fiscally irresponsible state.
That being said, the world was uncertain as to how much economic damage had yet to be done, and by shoring up Greece it assuaged investor confidence across the western world. Personally I think that the level of debt in the developed world is completely unsustainable because it relies on population growth and productivity growth in a manner that will one day lead to a massive global failure / inflation, but my opinion isn't really the majority opinion on economics. Essentially Germany shored up Greece for Germany's own interests: stabilize the Euro and investor confidence in Europe.
That being said, Greece can afford to pay back its debts. The current debt to GDP of Greece is 175%. Before the populist clowns looked like they were about to win the government, the interest rate on Greek debt was around 5 or 6%, which is affordable, and the longer it is paid, the lower that rate will go. Look at Canada during the 90s, the interest rates plummeted as soon as the government paid off 10 points of the debt to GDP ratio, just because the government gained investor confidence.
Greek pensions and benefits are unsustainable. Greek tax rates, while nominally high, are not uniformly paid due to corruption. That is the real real reason Greece can't afford this debt burden. And frankly, if they are going to default, they should do so soon, since the world is at a high mark financially right now.
Re: Open letter to German readers: What you were never told about Greece
#9tldr; Instead of taking new loans and servicing our existing debt, we'd like new loans and NOT have to service our existing debt. EDIT: To those responding "he didn't ask for loans" in the last line he's asking for a "European New Deal"... what else could that be besides new loans or a straight-on gifting of more money?
I must have missed the part where he asked for new loans.
Re: Open letter to German readers: What you were never told about Greece
#10Tsipras' spoken english is very limited, it is unlikely he wrote this himself.
The article also says it was published in "a leading German language business newspaper", so it's likely it was translated into German as well as English.
Still, I think it's fair to say he wrote it himself, so long as it's been accurately translated on his behalf.