Tsipras' spoken english is very limited, it is unlikely he wrote this himself.
It was probably translated from Greek, why is it a problem?
Probably from German, translated from Greek.
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
#32>So, let me be frank: Greece's debt is currently unsustainable and will never be serviced, especially while Greece is being subjected to continuous fiscal waterboarding. Despite the rhetoric this is the problem of not just Greece but many other developed governments, notably Japan. Central banks have been goosing the time value of money in an effort to spur 'growth' because if an entity can become richer faster than…
Japan is doing just fine. Most economists accept that it will keep on like that for a long, long time.
Since their debt is in yen, in the far future they can still reset their currency. Germany has done this twice in the 20th century and while it was certainly a disaster for people who has saved some money, the economy always recovered quickly.
It's the same for everyone predicting doom for the US. Let's not forget that even a currency reform does not wipe out a country. It merely wipes out all wealth stored in banks.
It's bad, but it's not worth keeping everyone worried for decades, when it might just happen once in a century.
Re: Open letter to German readers: What you were never told about Greece
#33This one sentence sums up what I think is the fundamental problem: "An insolvency problem was thus dealt with as if it were a case of illiquidity." That is, the problem isn't some ephemeral panic where people are temporarily unwilling to lend. The problem is there are massive capital losses that have yet to be acknowledged. The problem is that Euro politicians believe that by continuing to bankroll Greece they will s…
> "continuing to bankroll Greece"
What are the EU treaty obligations in this regard?
Is this still undecided? Is it a "corner case" that was never really spelled out how to handle it?
Re: Open letter to German readers: What you were never told about Greece
#34tldr; 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?
> 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
#35Earlier quoted context omitted.
Actually greece has a primary budget surplus, so at this point they are paying back the "loans", the problem is that they are miserable while doing so. If people are unemployed you are squandering resources.
While being miserable they are better of than let's say Slovaks who paid 660 mil Euro to bail out Greece. Think about it, they are not really living in poverty, they just lost the luxury standard they were used to.
Greece's GDP per capita has dropped below Slovenia's.
Re: Open letter to German readers: What you were never told about Greece
#36Re: Open letter to German readers: What you were never told about Greece
#37Earlier quoted context omitted.
I am having a hard time getting that from this message: >My party, and I personally, disagreed fiercely with the May 2010 loan agreement not because you, the citizens of Germany, did not give us enough money but because you gave us much, much more than you should have and our government accepted far, far more than it had a right to. >Our task is not to confront our partners. It is not to secure larger loans or, equiv…
Well, there's only two ways I know of that you can use to "inject" money into a person: You either give it to them as a loan or a gift.
Money doesn't have to go directly to the government. Their plan to fund things is more along the lines of making the many, many tax-evaders actually pay. Businesses that need loans can take them out on an individual basis, injecting money into the economy, but the government can get money from its own people rather than other countries.
Re: Open letter to German readers: What you were never told about Greece
#38This one sentence sums up what I think is the fundamental problem: "An insolvency problem was thus dealt with as if it were a case of illiquidity." That is, the problem isn't some ephemeral panic where people are temporarily unwilling to lend. The problem is there are massive capital losses that have yet to be acknowledged. The problem is that Euro politicians believe that by continuing to bankroll Greece they will s…
"to eat the losses" We already had to eat the losses of our own banks - look at the epic bail-out of RBS here in the UK.
UK.gov will turn a profit on RBS. RBS is not a loss.
Re: Open letter to German readers: What you were never told about Greece
#39Earlier quoted context omitted.
The real problem is that Greece - especially under it's new leadership - will very soon generate new astronomical debt if the current one is forgiven (paid by someone else). Lenders would be silly not to lend if they know the debtor will be certainly bailed out and actually Tsipras would be silly too not to finance his communist utopia from debt if he too knows Greece will be bailed out no matter what.
It doesn't seem like Tsipras is trying to get debt forgiveness paid for by the Germans, though. He wants to use the threat of default to force Greek's creditors to give them a haircut -- reduce principal or interest or both. That will reduce the amount of Greek debt repayment but it wouldn't increase the ability of Greece to incur more debtedness.
Are you sure? I thought the private creditors were already "haircutted", most of the Greek debts is to EU states and IMF.
Re: Open letter to German readers: What you were never told about Greece
#40Excellent. I fervently hope he can help call time on the "fiscal waterboarding". Here's the truth: the EU bailouts of Greece, Ireland, Portugal and Spain were mainly about protecting private creditors from taking losses on their investments. In fact this week the IMF had this to say about the Irish bailout:
"The failure of policy makers to impose losses on some bank creditors at the height of Ireland’s financial crisis was a mistake that forced Irish taxpayers to foot a bill that should have been borne by the wider eurozone, according to the International Monetary Fund.
The failure to 'bail-in' unsecured creditors to a bank rescue that cost Irish taxpayers €64bn and bankrupted the country was based on the view that doing so would have serious adverse 'spillover' effects in other eurozone countries, even though such risks were 'not obvious'."[1]
All of the developed world bailouts have benefited the most well-connected, the most wealthy, entrenched interests, i.e. banks and investors. And in the case of the U.S. banks this has not led to an end to Too Big To Fail, in fact, they've just gotten bigger and the relatively modest reforms that were passed are now even in danger of being rolled back.[2]
All of these extraordinary measures have led to paltry growth at best. And this includes quantitative easing which has not worked in Japan, has not worked in the U.S. and is not likely to work in Europe...unless you are wealthy or a bank, in which case it has worked just fine.[3][4]
No wonder we have Davos-man plotting his escape.[5] Any fool can see this kind of economic leadership is not sustainable.
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[1] http://www.ft.com/intl/cms/s/0/5f3131a4-a7ca-11e4-8e78-00144...
[2] http://www.stltoday.com/business/local/republican-led-u-s-ho...
[3] http://www.ibtimes.com/was-qe-effective-europe-awaits-qe-que...
[4] http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-ri...
[5] http://www.theguardian.com/public-leaders-network/2015/jan/2...