Greece • Hacker News Board

Re: Greece

#111

Post by hughw » Sun, Jul 05, 2015, 4:39 AM UTC

I just read this Duke law paper[1] saying that in 2012 Greek creditors took a 64% haircut. I had not realized they had received such debt relief already. From the report:

"Within the class of high- and middle-income countries, only three restructuring cases were harsher on private creditors: Iraq in 2006 (91%), Argentina in 2005 (76%) and Serbia and Montenegro in 2004 (71%). There are a number of cases of highly indebted poor countries, such as Yemen, Bolivia, and Guyana, that imposed higher losses on their private creditors. However, the Greek haircut exceeds those imposed in the Brady deals of the 1990s (the highest was Peru 1997, with 64 per cent), and it is also higher than Russia’s coercive 2000 exchange (51%)....the 2012 Greek exchange was exceptional in size, exceeding the next largest sovereign credit event in modern history, which to our knowledge wasRussia’s default on 1.7 billion British pounds in 1918, equivalent to just under 100 billion in 2011 Euros. The Greek exchange also easily surpasses the German default of 1932-33, the largest depression-era default on foreign bonds, comprising 2.2bn US$ at the time, or approximately 26 billion in 2011 Euros."

[1] http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=...

Re: Greece

#112

Post by oldmanjay » Sun, Jul 05, 2015, 4:53 AM UTC

hueving wrote: post #66

twobits wrote: post #27

The basic idea: BMW wants to sell more cars to greeks. Greeks don't have enough money so they can't buy. Deutsche Bank (DB) gives "free money" in loans. (And of course DB knows that greece isn't exactly "strong" economically.) We are talking about a greek population that never ever had a loan before, while the prime minister talks about the "powerful (economically) greece". They also thought that the world "stock mar…

Who bought the BMWs in that scenario? If you are offered a credit card with a $20k limit, do you max it out with no intent to pay it back?

The Greeks who were forced by their strong desire to buy BMWs are victims. Do you want to blame the victims?

Re: Greece

#113

Post by oldmanjay » Sun, Jul 05, 2015, 5:01 AM UTC

throwaway2048 wrote: post #95

tormeh wrote: post #84

Earlier quoted context omitted.

Just a heads-up that the concept that the creditors must accept risk is a very anglo-saxon perspective. The German view is that debts are to be paid back, period. If you don't pay them back you're a morally deficient scoundrel. If you're ever bankrupt then the legal system will permanently brand you. German economics is a mix of Austrian school economics and strict morals. It doesn't excuse the largely international…

just like germany paid off its debts post ww1 and ww2?

Half of the country got to suffer under the yoke of the USSR for half a century. The debt is paid.

Re: Greece

#114

Post by saool » Sun, Jul 05, 2015, 5:02 AM UTC

misterbarnaby wrote: post #44

"They had knowingly and purposefully brought weak states into the Eurozone, because they genuinely, even nobly, wished to build a large, strong, United Europe." For folks who know Europe/Europeans well, is this true?

Absolutely. The pro-European movement that's been going on for many many decades has as an ultimate goal to unite the peoples of Europe so we can live in peace. United in diversity, as the EU motto claims. A great % of Europeans you met before 2008 would agree with this.

There's now —sadly— little left going around of the "Alle Menschen werden Brüder" that our shared anthem sings (all men become brothers under the gentle wing of joy).

A bunch of unscrupulous cronies sold both northern and southern Europeans up the river just to make a profit for themselves and their friends. No damn statesmanship to be seen anywhere. Long gone are the times Schroeder and other much-more-respectable leaders, we now have to put up with the likes of Lagarde and Juncker. And, of course, Tsipras and Varoufakis, amateur hour, who have been absurdly reckless in their handling of the negotiations and PR.

Re: Greece

#115

Post by [deleted] » Sun, Jul 05, 2015, 5:38 AM UTC

hughw wrote: post #111

I just read this Duke law paper[1] saying that in 2012 Greek creditors took a 64% haircut. I had not realized they had received such debt relief already. From the report: "Within the class of high- and middle-income countries, only three restructuring cases were harsher on private creditors: Iraq in 2006 (91%), Argentina in 2005 (76%) and Serbia and Montenegro in 2004 (71%). There are a number of cases of highly inde…

[deleted]

Re: Greece

#116

Post by ageek123 » Sun, Jul 05, 2015, 5:46 AM UTC

bjourne wrote: post #93

mike_hearn wrote: post #24

Earlier quoted context omitted.

The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. Maybe hairdressing should not be considered a 'dangerous profession', thus unlocking various benefits. Maybe Greek train drivers should not be paid $130,000 a year to drive near-empty trains. Maybe Greece should be able to grow its own food instead of importing more than half o…

Greeks have one of the higher average retirement ages in Europe: http://www.newstatesman.com/blogs/world-affairs/2012/05/expl... 61.7 for Greece, 60.9 is the EU average.

Not quite. Check out the quotes from the Greek labor minister in the following article. The situation is much worse than it seems. http://greece.greekreporter.com/2014/12/04/75-of-greek-pensi...

Re: Greece

#117

Post by snitko » Sun, Jul 05, 2015, 6:06 AM UTC

parasubvert wrote: post #109

snitko wrote: post #96

Earlier quoted context omitted.

> Actually where the country controls its currency the effects are totally different and if the ECB could certainly step in for tiny Greece if there was a will. It's the same thing. If you don't have enough money in the bank to make creditors whole, you print more (thus devaluing what everybody has). If you can't print, you cut their deposits. Either way, creditors are robbed. There is no magical solution here. Mathe…

If the creditor is a bank, they're also creating money when they loan it out. Who is being robbed again? In theory, it's either the shareholders, boldholders, or the broader citizenry that carry the risk in the banking system. So far Europe's governments have hung the risk on its citizens because either the banking system is too fragile to handle large defaults, or they want to preserve their bond holder and sharehol…

There is one difference. When you have a government, it indebts people, who do not necessarily agree or understand the terms and the consequences. You cannot reasonably argue that because 50% voted for that government, 100% should face the consequences.

Re: Greece

#118

Post by crdoconnor » Sun, Jul 05, 2015, 6:09 AM UTC

PhantomGremlin wrote: post #79

snitko wrote: post #59

Earlier quoted context omitted.

Unfortunately, it's neither. The debtors in this case are the people of Greece, yet the ones who got them indebted are politicians, who misled the population into believing that the expenses the government had were sustainable. Even more important is that the politicians were not voted in by 100% of people, which simply means that many people who lost their money didn't agree with the policy that led to them losing t…

half the population ... oblige the other half I'd love to see an experiment where democracy was modified. People should get multiple votes, proportional not to their income or their wealth, but to the amount of taxes they paid the previous year. There would need to be some sort of limit. E.g. nobody gets less than 1 vote nor more than 10. But something like that would create what some call "skin in the game". Those p…

So in other words you think that the wealthy do not yet have enough representation in government?

That's quite a bold claim.

Re: Greece

#119

Post by crdoconnor » Sun, Jul 05, 2015, 6:15 AM UTC

tormeh wrote: post #84

rosser wrote: post #58

Earlier quoted context omitted.

When you're lending out billions of dollars , you don't take the debtor's statements at face value. You do very thorough due diligence, and employ very capable people to do it for you. There is no excuse for Deutsche Bank, et al , not to have known exactly how tenuous the strength and solvency of the Greek economy were. The notion that no-one knew the Greek government was lying about the state of their economy until…

Just a heads-up that the concept that the creditors must accept risk is a very anglo-saxon perspective. The German view is that debts are to be paid back, period. If you don't pay them back you're a morally deficient scoundrel. If you're ever bankrupt then the legal system will permanently brand you. German economics is a mix of Austrian school economics and strict morals. It doesn't excuse the largely international…

>Just a heads-up that the concept that the creditors must accept risk is a very anglo-saxon perspective. The German view is that debts are to be paid back, period.

It's neither Anglo-Saxon nor German. It's a creditor perspective.

The same perspective that brought us debtor's prisons, and even (in Roman times), the notion of bankruptcy meaning "selling yourself into slavery".

Re: Greece

#120

Post by crdoconnor » Sun, Jul 05, 2015, 6:17 AM UTC

reagency wrote: post #46

dnautics wrote: post #7

> "The world is full of unworthy and unscrupulous entities willing to take your money and call the transaction a “loan”. It always will be. That is why responsibility for, and the consequences of, extending credit badly must fall upon creditors, not debtors. There is one morality tale that says the debtor must repay, or she has sinned and must be punished. There is another morality tale that says the creditor must in…

That quote is silly, it completely justifies fraud. There has to be a balance.

The balance can involve slamming the individuals in jail who enabled Greece to misrepresent its finances before it joined.

Unfortunately, actually prosecuting fraud seems to be a minority view, whereas punishing entire countries (primarily those on a low income, too) for the sins of a few is the norm in Europe.