Greeks Reject Bailout Terms • Hacker News Board

Re: Greeks Reject Bailout Terms

#171

Post by vegabook » Sun, Jul 05, 2015, 9:51 PM UTC

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…

You forget that their are two Greeces, just like there are two Europes and increasingly, two Americas.

Your comments are entirely reasonable when it comes to the rent-seeking corrupt upper classes in Greece who have run the country aground over 3 decades, costing both the European taxpayer and the honest working class Greek (who have voted NO).

Your comments are unreasonable when taking into account the fact that the bailouts so far have overwhelmingly supported the existing wealthy (Greek and German) at the expense of the middle and lower classes (again, Greek and German (taxpayers)), who cannot be blamed for Greece's existing travails.

The underlying issue here is that all European (and most American) banks are bankrupt, and that in order to support them we cannot let any of their assets go bad. Thus we must bailout their debtors (transfer of bad assets at inflated prices from the rich to the taxpayer). Watch this space. There is much more of this to come, and not only in Greece. It's what QE is all about.

We're witnessing the weakest domino fall but there are many in the chain, and in all cases, pretending that people should "just pay their debts" is simplistic and ignorant of the unfair transfer of wealth happening before our eyes.

Back to Mesopotamia: http://www.axel-troost.de/serveDocument.php?id=1967&file=5/5...

Re: Greeks Reject Bailout Terms

#172

Post by ryandrake » Sun, Jul 05, 2015, 9:52 PM UTC

The failure and shame should be shared by the lenders. If you really want a risk-free investment, you should be willing to accept a risk-free return. You receive a return on a loan commensurate with the risk of default. Sovereign debt should not be special.

Re: Greeks Reject Bailout Terms

#173

Post by tptacek » Sun, Jul 05, 2015, 9:53 PM UTC

calibraxis wrote: post #170

makeitsuckless wrote: post #157

Earlier quoted context omitted.

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?

I’m from the US and say hell yes, we should pay Greek debt. We supported their authoritarian governments post-WWII. ( https://en.wikipedia.org/wiki/Greek_military_junta_of_1967%E... ) As for Germany... as Piketty told Die Zeit, Germany never repaid its debts and has "no standing to lecture other nations." They're hilariously wagging their fingers at far more responsible people. ( https://medium.com/@gavinschalliol/th…

You can't drop the mic on "Germany never paid the debts the Nazis racked up", because Germany is not insolvent, and Greece is. Greece has not only a large national debt, but also an ongoing primary deficit. It literally cannot pay for the public sector it commits itself to running.

What that implies to external financing negotiations is that even if Greece's debt is forgiven (economists from across the spectrum seem to agree this should happen), unless Greece adjusts its fiscal policy --- inconveniently, to something more akin to what Germany is demanding --- the bailout just delays the inevitable.

Re: Greeks Reject Bailout Terms

#174

Post by NotableAlamode » Sun, Jul 05, 2015, 9:53 PM UTC

tptacek wrote: post #126

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…

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.

     I wonder what the EU expected.

The EU didn't think it through.

The Euro was primarily a (french) political project to weaken Germany following reunification. This is strongly reflected on the ECB's board, where Germany has the same number of votes as Malta! In order to sell the Euro to conservative Germans who feared a "Transfer Union" (where they would perpetually have to bail out certain states that shall remain anonymous with a reputation for fiscal improbity) some vague promises were added about debt levels. But the promises were not accompanied by any enforcement mechanisms and soon fell by the way-side.

I used to ridicule Eurosceptics, seeing them as dinosaurs who are on the wrong side of history. But to my consternation, I have to accept now that most of their worst fears have come to pass.

As a historical aside, it is noteworthy that about a century ago a similar scenario played out: Greece (and others) crashed the Latin Monetary Union [1], a 19th-century attempt to unify several European currencies into a single currency that could be used in all the member states, at a time when most national currencies were still made out of gold and silver. It was established in 1865 and disbanded in 1927.

[1] https://en.wikipedia.org/wiki/Latin_Monetary_Union

Re: Greeks Reject Bailout Terms

#175

Post by JulianMorrison » Sun, Jul 05, 2015, 9:53 PM UTC

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…

I don't think anybody sees Greece as innocent of creating the debt. But.

1. The ones bailed out have been private bankers, by public funds.

2. Austerity, demanded as the cure for deficit spending, has dragged Greece into a recession and achieved exactly none of its aims - spending is still high as a proportion of GDP, because GDP has crashed.

3. The creditors have stopped demanding austerity as a policy aimed at creating a viable economy, and switched to demanding it to punish the greeks for populist leftism, and to contain the anti-austerity parties in Europe, and because they have unprofessional snits against Tsipras.

4. The only sane answer is to write off a huge swathe of the debt, as patently irrecoverable, inject capital, give a decade long holiday from repayments, and let the Greek economy recover.

5. Only a NO vote could lead to this being on the table.

Re: Greeks Reject Bailout Terms

#176

Post by elorant » Sun, Jul 05, 2015, 9:54 PM UTC

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…

Wow the amount of ignorance in this comment is staggering. Many countries have deficits for decades. Greece’s debt ballooned once we entered the Eurozone. From the hundreds of billions given as loans less than 20% went to our economy. Most were used to bailout EU banks, namely French and German ones. Greece never lived up to the agreement? Then how on earth did our GDP fall by 30% in five years? How come unemployment in young people reached 50% if we did nothing of what was agreed?

The reason we rejected the last bailout was because it didn’t include any terms of debt relief which is the only way for the economy to recover. That and Tsipra’s incompetence paired by an equal amount of incompetence and lies from EU officials. As the saying goes, it takes two to tango.

I’m not surprised that you are from Germany (I guess you read Bild a lot). Well I’m Greek and I have news for you. In 1954 we wrote off 50% of your debt to us. And we did it despite the fact that ten years ago you’ve invaded our country and wrecked havoc doing monstrosities like murdering whole villages including kids. We did out of solidarity to help your economy grow. It’s time now you do the same. It’s either that or we default and you can kiss your 70 bn loans goodbye. And then you can return to your miserable Mark because Euro will collapse sooner or later.

Re: Greeks Reject Bailout Terms

#177

Post by JumpCrisscross » Sun, Jul 05, 2015, 9:54 PM UTC

atmosx wrote: post #43

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 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.

> Your money went mainly to your Banks, via Greece.

Suppose you have a €500 credit card bill. That bill represents euros you have spent (plus interest). If I pay that bill for you it frees €500, which would have previously serviced debt, for other things. It would be disingenuous to say "I gave the money to the bank, so it only helped them and not you."

French and German banks did get bailed out of their bad credit decisions. But Greece gained substantially from its borrowings in the short-run.

> blow the Euro

The financial markets are not convinced that a Grexit would harm Europe significantly [1]. In the long-run, the union may actually be strengthened.

[1] http://www.businessinsider.com/deutsche-bank-greece-contagio...

Re: Greeks Reject Bailout Terms

#178

Post by rihegher » Sun, Jul 05, 2015, 9:55 PM UTC

NotableAlamode wrote: post #91

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.

Your money went mainly to your Banks, via Greece. And if we send bread to feed the poor, you'd book that under "your money went mainly to your bakeries". It's just dishonest. Moreover, it's even factually false that the majority of the bailout money was used for bailing out banks. Only 1/3 of the credits were used for this purpose. The rest fuelled consumption in Greece, and/or was off-shored by the greek elites. you…

It's a long serie of mistakes that led us there. Maybe european leader should have stop postponing the crash and let greece default on all its debt to private creditor and let the impacted banks to go bankrupt like Credit Agricole for instance. But because in every major banks in europe, commercial banking and investment banking are not seperate activities, along with the banks bankruptcy a lot of people would have lost a lot of money.

So French and German politicians did not want this to happen. Greece was not alone to have financial problems, Ireland, Spain and Portugal had some as well but after a long austerity cure they are now stable. But austerity just didn't work as expected in Greece.

Re: Greeks Reject Bailout Terms

#179

Post by gutnor » Sun, Jul 05, 2015, 9:55 PM UTC

mb_72 wrote: post #94

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…

Half-Australian and half-Estonian here; I can only agree with your sentiment. It seems to me that decades of corruption, tax avoidance and financial mismanagement is responsible for the position that Greece is in today, and I don't see why it is necessary for other countries to reward such behaviour with continued support and understanding. You don't like the terms of financial support offered by the EU? Well, maybe…

How much research did you do into all the fiscal decisions of the country you live in ? Are you even qualified enough to interpret the result at all ?It seems to me you are asking from the average Joe Greek more than professional actually did.

Also "Greece" is not a single entity. Making Greece pay does not mean making the people that created the debt pay - it means taking the available money and you should know that "available money" is generally not rich people money.

So yes, you are right that you do not want to reward such behaviour. Letting the actual responsible get away with it and punish somebody else is not the way to do it though.

Re: Greeks Reject Bailout Terms

#180

Post by [deleted] » Sun, Jul 05, 2015, 9:55 PM UTC

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.

[deleted]